Hello everyone and welcome to ZD Tech, ZDNet’s daily editorial podcast. My name is Clarisse Treilles and today I will explain to you why NFTs are becoming the new digital storefront for physical brands.
There is nothing more intangible and elusive than a brand image, in theory. Nothing ? Except an NFT of course. This digital asset, also called a “non-fungible token” in the long version, provides access to the digital representation of a physical object.
As such, it becomes a lever in its own right in the communication strategy of brands.
The famous Gap hoodie goes virtual
Through this blockchain-based technology, brands draw new sources of inspiration from connected universes, and increase their popularity with consumers.
Gap is the latest retailer to venture into NFT. Fans of the brand can now virtually own the model that made Gap’s reputation in ready-to-wear: its hoodies.
These NFTs are priced between $8 and $400, depending on their rarity. This means that a virtual hoodie can cost… up to 10 times more than the hoodie on your back. Does that sound crazy to you?
The speculation of NFTs is such that these digital objects are becoming a golden goose for many brands. With a well-crafted strategy, NFTs open the way to a significant additional source of income. For example, the NFT collection signed Dolce & Gabbana brought in $5.65 million for the Italian brand.
NFTs to fight counterfeiting
The strength of NFTs, for brands, is also their ability to federate communities. We can imagine, tomorrow, a virtual community based on NFTs, like what is done with customer clubs in stores.
When we talk about exclusivity and rarity, we obviously think of the luxury sector, which is also experiencing a small revolution with NFTs. Blockchain projects are emerging, such as the Arianee consortium. This luxury “passport” fights against counterfeits: it guarantees brands the security of transactions and gives the buyer an authenticated digital title.
The fashion for NFTs does not stop at the doors of retailers, but today affects many areas, including gaming and the art market. In 2021, NFT sales globally brought in nearly $25 billion, up from $94.9 million the previous year, according to data from DappRadar.
NFTs have therefore not finished being talked about. But this rise in power also brings out a paradox: the impact of virtual worlds in our physical daily life. At Gap, this paradox is already pointing the tip of its nose: while customers buy virtual hoodies online, the physical stores of the American ready-to-wear brand are threatened with disappearance in Europe.
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