Fast Forward on Phygital Fashion

Fashion and lifestyle brands, especially in the luxury and athleticwear spaces, have been active experimenters in the use of NFTs. Many of the initiatives to date have focused on using NFTs to enhance consumer engagement and reward fans with exclusive content or experiences. Increasingly, however, fashion labels are trying to tie NFTs with physical products as part of the value proposition.

These efforts can take several forms. They can offer NFT holders the option to purchase exclusive or discounted physical merchandise; create physical collections that replicate the most successful NFT designs; give physical merchandise purchasers access to an NFT that unlocks content, discounts, giveaways like fashion show tickets, or other value; or provide twinned merchandise-and-NFT pairs that remain linked as proof of authenticity and ownership. Many ventures incorporate more than one of these components.

Recent initiatives give a sense of the landscape:

• Smiley announced a partnership last week with Space Runners, called Smiley World by Space Runners. The collection is divided into 10 Smiley Worlds, each with a different theme. NFT owners will be able to access exclusive merchandise drops and earn royalties from sales of merchandise tied to the NFTs they own, among other value-added properties. In addition, the plan is for NFTs to be tied to physical products with a goal of reducing counterfeiting.

• Louis Vuitton introduced a very limited, luxury NFT version of its famous trunk, in a venture known as the Treasure Trunk. Holders who possess an NFT trunk—a few hundred are available at a price of $41,000 each—can then purchase NFT keys issued on a regular basis that give them access to limited-edition products, as well as exclusive experiences. The physical products are twinned with the NFT keys as proof of authenticity. The initial trunk stays with the purchaser, but the keys can be bought and sold on secondary NFT marketplaces.

• Prada recently debuted the latest installment of its Timecapsule NFT Collection, which it first launched a year ago. As part of the effort, the luxury label releases a limited-edition of 50 physical fashion items on the first Thursday of every month, with each article paired with an NFT that gives the holder access to Prada’s exclusive NFT community on Discord. The drop this month consisted of a unisex tank top constructed of upcycled floral fabric from Prada’s archive.

• Byredo, the luxury fragrance and cosmetic brand owned by Puig, paired with Nike-owned RTFKT to issue a limited-edition collection of customized fragrances representing different emotions. Each bottle has a near-field communication (NFC) tag that gives the holder access to an NFT of the scent, represented in the metaverse as an “aura.”

• Rebecca Minkoff’s ongoing NFT project with Mavion offers holders periodic benefits, including physical handbags as well as discounts, sneak peaks of new collections, chances to win tickets to runway shows, and the like. Two of the benefits for 2023 include a chance to help co-design a limited-edition bag and a chance to win a Rebecca Minkoff bag of the holder’s choice. The project launched in 2022 with a first drop of 55 NFTs, followed closely by a second drop of 50.

• Nike and RTFKT, which was the brand’s NFT partner before the former acquired the latter in December 2021, released their first physical sneakers twinned to an NFT, named Cryptokicks iRL after their successful NFT-only Cryptokicks program. The shoe, which came in four colorways, was introduced first as a collection of 19,000 NFTs, each of which could be redeemed for a pair of physical shoes. An app gives the NFT holders the ability to customize the fit. In turn, the shoes have NFC chips that authenticate them against the originally purchased digital twin.

• Tiffany launched 250 of what it called NFTiffs. Described as digital passes, priced at the cryptocurrency equivalent of about $50,000 each, these allow the holder to convert their unique NFTiff into physical jewelry. The initiative was in collaboration with NFT project CryptoPunks; purchasers of an NFTiff ended up with a unique pendant consisting of a one-of-a-kind combination of 30 precious stones that mimic the look of the holder’s specific CryptoPunk character.

• Balmain issued a 50-piece unisex ready-to-wear collection of apparel and accessories last year with Mattel’s Barbie. As part of the collaboration, Mattel launched an NFT auction of three unique Barbie and Ken avatars, each wearing items from the physical collection; bidders also received a unique Barbie-sized physical set of Balmain’s Barbie pieces.

• Puma launched its first NFTs in 2022 within a new metaverse experience called Black Station. One of the elements of the site is an offering of NFTs redeemable for limited-edition physical sneakers. At launch, consumers who minted a Puma NFT Nitropass received two NFTs, one that could be exchanged for a pair of physical sneakers (the Nitro NFRNO or the Nitro Fastroid) and the other for a customized experience tied to the shoe they selected. In June 2023 the company introduced its Black Station 2 extension, with Puma Pass NFT holders given the chance to buy Materializer NFTs, which can either be traded for a physical twin or collected digitally.

• Digital fashion label MNTGE, which photographs real vintage clothing pieces and turns them into NFTs and other digital assets, released its first physical collection, MNTGE Fruits and Veggies, earlier this year. The products upcycle vintage Levi’s 505 jeans by embroidering them with an all-over fruit and vegetable pattern designed by MNTGE co-founder, designer Sean Wotherspoon. Each garment is unique and NFC-chipped, giving access to a one-of-a-kind NFT of a piece of denim art. A second drop consisted of a collection of products made from vintage t-shirts.

These are just a few examples of recent programs pairing fashion and lifestyle products with NFTs; you can learn about others in our last story on this topic, published in November 2022. This phenomenon is happening in other segments of licensing as well, although fashion is one of the property types at the forefront.

Possibly the most significant program tying NFTs with digital merchandise to date will be Amazon’s rumored NFT marketplace, which is expected to launch this year after a number of delays, according to a variety of news outlets. While the company itself has not said much officially about this venture, it will reportedly offer NFTs that are connected to physical clothing as one of several components.

Fashion and NFTs are among the topics discussed in our detailed round-up of observations from Licensing Expo 2023, held June 13-15 in Las Vegas. The story covers trends noted on the show floor and in conversations with exhibitors and attendees. Read it here.