NFT Chic: Is fashion’s embrace of Web3 more than just a passing trend?

Fashion brands continue to flood into the NFT space, but behind the champagne, hype and gala launches, is there any substance? What are fashion brands actually doing with NFTs — are they genuinely trying to innovate, or are they just cashing in on name recognition? In our latest data blog, we take a look at what the biggest fashion brands are doing with NFTs.  

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Since 2021, many fashion companies, from luxury design houses like Prada to streetwear brands like Adidas, have launched NFT collections. The goals of the campaigns vary, but in interviews, representatives of the firms often state a desire to to stay on the cutting edge of innovation and appeal to the next wave of millennial and GenZ consumers. NFTs offer brands a new revenue stream, a way to extend their presence into online communities and the metaverse, the chance to reward the loyalty of repeat customers, and an opportunity to create buzz around upcoming products. Particularly on the luxury end of the market, brands are also interested in authenticating products using NFTs to help combat forgery.   

When a new NFT from a fashion brand drops, the announcements are often quite heavy on superlatives and a bit light on detail. While spokespeople tend to talk about “unlocking boundless potential to connect”, “creator led organisation”, or celebrating the “sophistication of experience”, many consumers are left scratching their heads and wondering what it all means. 

It would be easy to dismiss it all as empty hype, and some of it probably is. At Tommy Hilfiger's official New York Fashion Week event in 2022, guests including Kate Moss, Kourtney Kardasdian and Kris Jenner were given the opportunity to download an exclusive NFT. It featured a short, colourful video of the firm’s eponymous founder taking a polaroid photo. The NFT was not required to enter the event and had no other utility. Organisers described this as “a multiverse experience”. 

But behind all the flowery language and extravagant launch parties, there are actually a rich variety of approaches to NFTs and activation mechanisms at work. In this blog, we will analyse which fashion brands are most active in the NFT space and break down projects by category in order to get a better sense for what is actually happening after they launch.

Nike and Adidas lead the charge

This January, CoinGecko analysed which fashion brands are most heavily involved in the NFT space, finding that 21 out of the top 50 fashion brands globally have issued NFTs in some form and that sportswear brands Adidas and Nike are most active in terms of NFT collections launched, with Puma coming in third place. 

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For people who have been following fashion NFTs closely, the fact that Adidas and Nike have issued the most collections will come as no surprise, as both companies have made significant investments in Web3 in recent years. In the case of Adidas, this was spearheaded by the VP of Three Stripes Studio Erika Wykes-Sneyd, who has pursued a Web3 strategy encompassing digital apparel, NFT wearables, and art. As for Nike, the NFT collections stem from the company’s acquisition of virtual sneaker and digital collectibles firm RTFKT in December 2021. 

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Both Nike and Adidas are attempting to cast themselves as “Web3 insiders” by doing partnerships with existing Web3 projects and influencers, using Web3-native platforms, and using sequential NFT drops to build hype. While this may buy them some credibility within the NFT bubble, it remains open to question whether it will draw in casual sports fans and sneaker heads who are less likely to be able to get to grips with game lore, evolving attributes, and multi-phase NFT drops. In contrast, brands like Puma have gone for a slightly more simplified approach, typically involving a physical product coupled with an NFT, often issued simultaneously.  

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NFT drops continued throughout 2023 despite lower volumes

Despite the steep drop off in the NFT market in 2022, with monthly trading volumes declining by 95% on OpenSea from the peak the previous year, fashion brands continued to launch NFT collections that year. Of the NFT collections launched by top fashion brands we analysed, 13% were launched in 2021, 47% were launched in 2022, and 40% were launched in 2023. It will be interesting to see whether this trend continues in 2024.

Merely counting NFT collections doesn’t tell the full story, however. Use cases range from charity NFT auctions that are over in one day to extended campaigns that influence the development and distribution of real-world products. Thus, we thought it would be useful to dig a bit deeper. We categorised each NFT collection issued by a top fashion brand — which amassed 60 separate collections in total — to find out what use cases are most prevalent. Note that in some cases, a single NFT had multiple benefits and the categorization below represents what we deemed the primary use case for each NFT. 

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NFTs linked to physical products

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Accounting for 42% of the NFT collections we analysed, the most prevalent use case was NFTs linked to physical goods or merchandise. Sometimes described by marketeers as “phygital” products, the goal is to blend a physical and digital ownership experience. This category encompasses a number of approaches that vary greatly in complexity:

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NFT twins: As the simplest end of the spectrum, sometimes physical goods come bundled with a NFT collectible representation of it that can be accessed through a website or app. For example, French luxury fashion house Givenchy collaborated with streetwear brand Bstroy to release a clothing line that included NFT replicas.  

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NFT authentication: Sometimes the focus is on verifying the authenticity of a product. For instance, luxury watchmaker Bulgari created the world’s thinnest mechanical watch in 2022, which had a QR code printed on it linking to a unique NFT. Similarly, Puma Slipstream Physicals, which were launched in partnership with 10KTF, came with an embedded NFC chip that links the shoes to their matching digital version. 

Some commentators, such as CoinDesk contributor William Foxley, have questioned whether NFTs currently offer a viable solution to counterfeiting, pointing out that QR codes and NFTs can be relatively easily faked to an undiscerning customer. However, this remains one of the most interesting, practical use cases for NFTs in the fashion sector.

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NFT access pass: In other cases, an NFT has to be purchased in advance to access future products. The Puma Pass NFTs issued in 2022 offered holders the right to purchase limited-edition products being released by Black Station, Puma’s innovation hub. Brands are aware that popular limited-edition sneakers often change hands for many multiples of their cost price shortly after launch on reseller websites like GOAT and StockX. NFT’s offer these brands a chance to profit from this scarcity, while hopefully putting more shoes in the hands of genuine enthusiasts rather than opportunistic resellers. The access pass model of NFT is also visible at the luxury end of the market. For example, French fashion house Louis Vuitton launched Via Treasure Trunks in June 2023, featuring $39,000 NFTs that granted holders access to future exclusive, member-only products.  

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NFT customization: Rather than a standard twin, some brands offer customised physical products based on NFT attributes. In August 2022, Tiffany and Co launched NFTiff, a NFT collection of 250 digital passes costing 30 ETH each. CryptoPunk NFT owners who also purchased the NFTiff token could receive a handcrafted pendant containing gemstones and diamonds based on the 87 attributes and 159 colours present in their CryptoPunk NFT. 

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NFT art

The second-largest category of NFT collection issued by top fashion brands is art. This typically involves a brand collaborating with a digital artist or designer to create NFTs which are sold at auction. Adidas launched a digital artist residency program in August 2023, collaborating with artists like MonkeeMoto and Dear Nostalgia to sell NFTs on the Rarible platform. Luxury brand Gucci worked with artists such as Claire Silver and Emily Xie in July 2023 to release an NFT collection inspired by Gucci textiles and colours which was auctioned on Christie’s digital art platform. Brands have also used NFT art auctions to signal their values and support charitable causes. For instance, Yves Saint Laurent commissioned a group of female crypto artists to create an NFT collection titled “The Night Masters”, which was auctioned in aid of Abuse is Not Love, a charity that aims to prevent intimate partner violence. 

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NFTs for the metaverse

A number of brands across the industry have launched digital-only NFTs intended for use in metaverse or digital environments. In November 2022, Adidas launched a collection of NFT wearables for Web3 known as “Virtual Gear” which are available to buy on OpenSea. At launch, Adidas promised to “explore every viable utility, platform, and experience within Web3 to unlock new possibilities for our wearables” and has sold Virtual Gear on both Decentraland and The Sandbox. It also offers a tool to style profile pictures with Virtual Gear on Bored Ape Yacht Club, Mutant Ape Yacht Club, WAGMI United and Inhabitants (MetaHero). 

Adidas was not the first fashion brand to launch NFT apparel explicitly for use in the metaverse. In December 2021, Under Armour launched the Curry Flow 9 digital sneaker to celebrate Stephen Curry becoming the highest three-point shooter in NBA history. The NFT sneaker can be worn in Decentraland, The Sandbox and Gala Games. 

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NFTs linked to digital content

Some fashion brands offer access to digital content through an NFT. For example, Puma teamed up with Jay-Z‘s Roc Nation to produce the RS-XL Mixtape sneaker collection. Each shoe contained an embedded NFC chip which linked to an NFT which provided access to weekly 14-track playlists. 

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NFTs linked to event attendance

The fashion industry is famous for glitzy events and galas, so it is unsurprising that NFTs have been used in conjunction with them. Ralph Lauren used an NFT airdrop to issue invites to a party in Miami, which was exclusively open to Poolsuite NFT holders. Each of the 2700 addresses received a commemorative Ralph Lauren NFT, which was used to register for tickets for the event. To celebrate its 70th anniversary, Italian luxury fashion house Moncler launched an immersive showcase titled The Extraordinary Exhibition detailing its history. The events took place in New York, London and Seoul. As a memento, 500 attendees in each city were given an NFT by digital artist Antoni Tudisco.   

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People often save ticket stubs to remind themselves of their favourite concert or exhibition, so issuing NFTs as a digital memento of a real event looks like a use case that has a bright future as ticketing moves increasingly from the physical to the digital realm.

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Conclusion

A closer analysis of NFT use in the fashion industry shows that they are being deployed in a wide variety of ways. Brands like Nike and Adidas have aped many of the mechanics of the existing NFT space, which lends them credibility among insiders but also might limit their reach. On the luxury end of the market, NFTs have been primarily used for conceptual art and auctions, to authenticate physical goods, and to access limited-edition products. 

There is clear value in some of these use cases. However, some of the other projects seem like hastily arranged publicity stunts and achieve little awareness or impact after launch. When devising new NFT initiatives, brands need to look for ways to provide genuine utility for holders without a steep learning curve for their target clientele.