“It wasn’t that long ago that NFTs were consuming endless media attention.”

However, the NFT boom has since faded. Across the board, NFT values and volumes have been falling. So, is it fair to assume they were just another fad and NFTs have no place in the fashion industry going forward? Big brands know that digital spaces aren’t going away and top designers are still looking for ways to stand out, create connections with consumers, and make money. 

NFTs, or non-fungible tokens, are digital assets recorded on a blockchain in such a way that authenticity and ownership can be proven. Importantly, true NFTs cannot be copied, substituted, or subdivided. In other words, NFTs can create scarcity and therefore value.

 As NFTs burst into the mainstream, digital artists started selling their original artwork as NFTs. In December 2021, Penta Magazine recalls digital artist Pak sold nearly 30,000 individual NFTs representing partial ownership of his creation called “The Merge,” and brought in $91.8M doing so. The Bored Ape Yacht Club and CrytpoPunks are well-known NFT collections that have sold tens of thousands of individual digital art pieces to individual buyers for a total value in the billions of dollars. 

With so much media attention and so much wealth in this new market, it is not surprising that the fashion industry began to experiment with NFTs as a way to broaden reach, expand brands, and create new revenue streams. One notable example is Adidas, who launched a massive NFT collection called “Into the Metaverse” in 2022 in collaboration with the Bored Ape Yacht Club. According to the Business of Fashion this collection sold out within hours, and each token was priced around $800. 

However, just two years later, many of the Bored Ape Yacht Club pieces now trade for less than 10% of their peak values and you can now pick up one of those Adidas NFTs on the OpenSea marketplace for just $260.

Some of the biggest brands are still experimenting with NFT use cases. The Business of Fashion further reports that Nike has now sold over 97,000 sneaker NFTs under its own name. In March 2023, Gucci announced a multi-year deal with Yuga Labs, the company behind many of the best-known NFT collections to explore how NFTs can burnish their brand. Louis Vuitton, at the forefront of marketing its style of luxury, has introduced high-priced Travel Trunk NFTs, offering exclusive products and experiences to the buyers. 

The overall focus seems to be shifting from selling ‘digital tchotchkes’ for a short-term monetary gain to creating longer-term, holder-focused perks. Instead of completely separating the physical and digital manifestations of their products, brands are innovating ways to combine the two. More and more brands are exploring utility linked to experiences, membership programs, and even commercialization rights for NFT holders.