[NFT.NYC] Luxury brands freshen up images with NFTs, Web3, forum told

Luxury brands are freshening up their brand images with the use of NFTs and Web3, enabling them to reinforce existing customers’ loyalty and appeal to new audiences, speakers at an NFT.NYC forum said. 

By issuing digital fashion in the form of NFTs, luxury fashion brands including Gucci, Prada and Louis Vuitton have taken a step forward over the past year, creating a new market, said Alex Kim, co-founder and president of the Bentley Blockchain Association which aims to promote NFTs and Web3 among young people.

The digital items helped fix environmental and sustainability issues because their supply chains were much smaller compared to that of the physical products, added Kim, who is also an economics and philosophy student at Bentley University in the United States.

As brands were innovating and experimenting with NFTs, they were also appealing to younger audiences, he said during the forum entitled “Redefining brand identities with NFTs,” held as part of NFT.NYC events in New York.

“Experimentations with these entities are no longer just for the feminine base,” he said. “[Brands such as Louis Vuitton] have been creating their own games. One that most of us are familiar with is Louis The Game that came out last year. It created a lot of in-game NFTs,” he said. 

Another example was Burberry, which last year launched its limited-edition NFT, Sharky B, Kim said.

“Everyone starts to realise how important brand loyalty is right now. Even though it may not be a long-term strategy for a lot of these companies, it is important to show that they are not just a Web2 company that is just going to stay traditional,” he said. 

Yet, opportunities offered by NFTs were very obvious for some industries, such as fashion and entertainment, but were less so for others at this stage, said Taylor O’Malley, senior program manager at Microsoft who has been working on blockchain-related projects in the past five years.

Corey Herscu, director of growth at Verb Factory, a branding agency with businesses in the U.S. and Canada, said brands that had recently lost their affinity and loyalty with consumers could find an opportunity in digital spheres and metaverse.

A decline in brand loyalty among general consumers was evident, Herscu said, citing a McKinsey study which says that 75% of consumers have tried and purchased a new brand in the last two years and that they are expected to continue to do so.

Because of the COVID-19 pandemic, consumers had less reasons to wear luxury clothes or carry expensive handbags, but instead tended to chill out in the metaverse, Herscu said. 

Web3 and NFTs were relevant to fashion brands because the concept of digital ownership made them completely different from the non-Web3 metaverse environments, he said.