Brands to Watch in 2022: NFT Projects in the Fashion and Beauty Industry
Back in 2006, Jack Dorsey, who founded Twitter, tweeted his first tweet. How much would you pay for a certificate that verifies you own that tweet?
If it helps you decide, the tweet said,
If your answer was three million dollars, you would have probably won the week long auction, that culminated with a $2.9 million purchase.
The certificate that the happy new owner bought in the auction was an NFT.
What is an NFT?
An NFT (non-fungible token) is basically a code that certifies ownership of this digital asset. An NFT doesn’t necessarily block other people’s free access to the asset, or allow the new owner the ability to change the asset. However, people buy NFTs to become the sole owner, or one of a small number of owners, of a unique digital asset – be it a tweet, a painting or a song – that cannot be exchanged for something identical. Twitter’s founder only tweeted his first tweet once (to the best of our knowledge, anyway).
As the NFT field gains popularity, fashion and luxury brands venture into this new territory, too.
What’s in it for Fashion and Beauty Brands
While more and more fashion and beauty brands are discovering the NFT world, it’s still pretty new, and projects still make headlines. Therefore, some brands use NFTs as part of their marketing strategy for retail innovation – say, when they launch new products.
NFTs for retailers also help brands attract new audiences. For example, a brand might use influencer marketing to spread the news of its new NFTs. To do that, it might engage tech savvy influencers, or foster collaborations of these influencers with fashion and beauty influencers.
Alternatively, a brand might create fashion and beauty products for game figures or metaverse avatars that are replicas of real world products customers can buy for themselves, too.
This, in turn, can result as an additional income stream. The brand could charge money for virtual products, just as it does for physical products – and yes, people do pay to dress their avatars well. In addition, a brand could create complimentary virtual collectibles, like art, to its real world products. This will serve both to expand its product offerings and to deepen relationships with its customers.
If a customer buys a digital shirt or lipstick, and then resells it for a higher price, some brands earn a commission from that sale. How do they know the product was resold? It’s digital, and can be tracked via blockchain code.
Fashion and Beauty Brands to Watch in 2022, and Their Interesting NFT Projects
To get a clearer idea of what’s possible for fashion and beauty brands engaging in the NFT world, let’s explore some of the most innovative brands operating today, as well as the interesting NFT projects they’ve already produced.
L’Oreal Paris Simultaneously Promotes its Lipstick and Gender Equality
NFTs for retailers might be built on new technologies, and offer a new way to engage with retail customers, but its foundations are rooted in the same challenges and bias the rest of our industry faces. A study that looked at NFT art sales across almost two years discovered that 77% of sales were made by men, who also earned more per art piece than women. Women accounted for 5% of sales, 16% were sold by artists whose gender is unknown, and 2% by collectives.
So when L’Oreal Paris launched a new red lipstick, it commissioned women artists to create art pieces that were inspired by the product. The art pieces sold as NFTs, with prices beginning at $1,500. Every dollar the NFTs made in their primary sales went directly to the artists who created them.
If the art pieces then get resold during the first year, half of the earnings the artists makes will go to L’Oreal’s nonprofit, which supports women who drive change in their communities.
NARS Cosmetics Sells Physical Products with its NFTs
When NARS cosmetics decided to promote its blush product that’s called Orgasm, it also commissioned female-identifying artists to create related NFTs.
One artist created contemporary art, which was available for free.
An additional artist created multimedia art, which went on sale for $50.
And another artist created electronic music, which went on sale for $500.
Getting one of the paid NFTs provided customers with physical products by NARS Cosmetics as well. The more they paid, the more physical products were included.
Nike Buys an NFT Company and Files Trademark Applications for Digital Products
Nike decided to go big in the NFT space. In December 2021, it acquired RTFKT, which is all about creating collectibles that connect gaming and culture. Among others, RTFKT successfully sold virtual sneakers for $70,000 a pair.
In February 2022, RTFKT used Twitter to tease an upcoming crate that’s “etched with Nike & RTFKT markings. It seems sentient… What does it do?”
As we shared in our article about retail innovation and the metaverse, Nike has been filing trademark applications, as it intends to sell more digital products. We’ll have to stay tuned to see what’s next.
DressX Accelerates the Virtual Fashion Industry
DressX might not be your traditional fashion retailer, but it’s operating in a space that’s growing in popularity – digital fashion for avatars, game figures and… real people.
In 2021, DressX launched a virtual store for virtual clothes. Some of the clothes were digital versions of luxury brand clothes. These were produced in partnership with Farfetch, a luxury retail platform, that sells luxury clothes in the real world (it started online, then opened brick and mortar stores, too). Other clothes were originally designed by the DressX team, including some that were inspired by SpaceX, an aerospace manufacturer.
Either way, some of these virtual clothes get sold as nonfungible tokens, and only their owners can wear them, creating true style exclusivity, at least in the virtual world.
It’s Just the Beginning for NFTs in Fashion and Beauty
As the hype grows and the technology advances, more audiences will embrace new virtual experiences, looking for ways to emphasize their own individuality and uniqueness. Expect more retailers to enter this space as time goes on.
To be one of the leaders, start experimenting now with small NFT projects that stand for something bigger, be it individuality or gender equality. Use this as an opportunity to show your customers you get what matters to them at their core, and to deepen your relationship with them, as you walk together into whatever future the virtual world will make possible.
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