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Are you wondering how your fashion startup can remain relevant in a digital landscape? With so many direct-to-consumer (DTC) fashion brands, competition is fierce; however, this technological wave is revolutionizing how companies attract customers in the industry. Fashion and technology have always been interconnected, and once again, it presents a significant opportunity for burgeoning fashion startups by way of NFTs.
There is a significant buzz surrounding the use of non-fungible tokens to combine blockchain technology with creative intellectual property. NFTs extend into art, music, sports, gaming, and even wine production, and now your fashion startup can jump on board, too. Although NFTs are a complicated medium, they have struck a chord with audiences, and the market for blockchain technology is exploding in the fashion industry.
As a cloud-based PLM software, Backbone understands consumer fashion isn’t reserved for the Stone Age — the future of fashion is digital! To better understand how your fashion startup can attract and connect with consumers from across the globe, read our latest blog to learn about crypto technology and how your brand can navigate a tech-savvy industry.
What are NFTs?
NFTs are cryptographic assets or units of data stored on a blockchain, a form of digital ledger. Transferring value over an unchangeable medium, NFTs are unique virtual tokens that can be used to display real-world items like paintings or real estate. The attributes of each NFT represent individual ownership, identity, property, and more while remaining within a blockchain representation.
Non-fungible tokens are associated with digital media such as photos, videos, and audio, replicating file types such as PNG, GIF, MP3, and others with unique identifying codes. Physical money and cryptocurrencies are “fungible,” meaning they can be traded or exchanged. NFTs differ because they require a digital signature that makes them impossible to trade, exchange, or duplicate beyond a specialized NFT marketplace. NFTs declare possession and allow users to purchase a brand’s digital collectibles or virtual products — paving the way for unlimited participation with your favorite companies.
Non-fungible tokens are captivating and obsessing tech enthusiasts across major industries, and the fashion sector is no exception. Luxury fashion brands and fashion startups sense the value and are slowly beginning to invest in this new form of crypto.
NFTs and the Fashion Industry
NFTs have already become more prominent in art and fashion communities, thanks to industry giants such as Gucci, Burberry, and Louis Vuitton opening up the fashion world to new digital channels. These luxury brands can take their pieces and transcend the preservation of ownership through a digitized space, and now, your fashion startup can utilize the same transformative technology.
Intertwining NFTs into the fashion industry allows consumers to purchase creative goods in a truly impactful way. We have seen fashion brands offer virtual try-on through Snapchat, create films based on current product lines, and introduce video games where players can unlock branded clothing for their avatars.
Apart from clothing brands and fashion startups welcoming NFTs and using blockchain technology as part of their marketing strategy, we have also witnessed companies offering tracing solutions to their customers. That means tracing product history and authenticity, including the origins of raw materials used to create new goods. Customers can also search for specific clothing items or accessories within a particular store and monitor trading activities throughout the market.
Digital and augmented shopping is part of the next retail frontier. It creates an immersive, engaging experience with a rich ecosystem of online channels and borderless spaces for creatives to interact with noteworthy brands or products. Coupling non-fungible tokens with virtual shopping platforms provides a central location to engage with products, advertise your business based on demand, and gain greater visibility into industry trends. In the fashion industry, there are parallels between the physical space and NFTs, and if done correctly, your audience will benefit from the best of both worlds.
The Impact of NFTs and the Fashion Industry
If you are a fashion designer, NFTs can help your team take real-life products and separate them in a virtual form, expanding the range of unique items available for purchase. Addressing the problem of digital apparel reproduction, NFTs make it possible for collectors to locate the original files. Non-fungible tokens can impact the resell market by tracking specific changes and paying firms a royalty every time their product sells in a second-hand market.
The idea that a digital item is as unique as the physical one appeals to fashion startups because it allows brands to monetize all digital assets and extend control over the product beyond the point of sale. Because NFTs are only intended to determine ownership of an original file, it’s unclear what benefits will derive from this digital exposure long-term. Ideally, fashion brands will generate new revenue streams through primary and secondary sales of digital artwork, tangible items, or live events. Fashion startups should have complete control over their messaging and product flow into the market without the usual interruptions caused by third-party merchants and media partners.
While not every fashion startup requires the prominent use of NFTs, those that do can reconnect and revive particular aspects of their brand to attract a digitally-focused, tech-centric demographic. Simply put, non-fungible tokens allow brands to create interconnected media to coincide with products, ultimately increasing the connection between brand and consumer.
How Will NFTs Affect Consumers?
Fashion consumers may see a gap between NFTs and a market that is determined by the success of a physical, visible product. While the fate of non-fungible tokes remains in the air, there is a chance for fashion startups to experiment with these new digital marketing and e-commerce methods. It is a way to provide assets for purchase, exposing potential customers to your brand or industry without a long-term investment. When audiences remain hyper-connected to your brand, they remain hyper-loyal to your product.
Creating experiences that go beyond the product sold will lead to repeat business. When a customer finds value in multiple areas, your fashion startup is more likely to increase conversions, brand advocacy, and lifetime value. Personalization plays a significant role in this process. Pairing personalized messages with your product creates a tailored relationship based on the trust consumers have in your brand.
NFTs deliver on experience and personalization to encourage customers to return time and time again. Non-fungible tokens are always one-of-a-kind assets exchanged from the brand to the consumer — and there is nothing more personal than owning unique possessions with proof of ownership. Companies can create NFTs and provide them through viral contests. For fashion startups with loyal followers, these contests allow brands to collect dynamic user data as audiences sign up for NFT consideration. Consumers that collect non-fungible tokens from their favorite brand can benefit from the financial gain of these assets as the product and brand awareness grows.
The Future of Fashion and Apparel
Whether your fashion startup decides to invest in PLM or NFTs, the future of fashion is digital. Embracing software of any kind helps organizations function and succeed in a very competitive digital climate by improving product quality, brand awareness, and visibility across product development cycles.
If you’re ready to transform your fashion startup into a dynamic, well-oiled machine, discover our collection of case studies, blogs, and free resources to learn more about the role PLM plays on tech-forward fashion brands.
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