Despite the approaching Crypto winter, luxury brands such as Gucci and Tiffany continue to penetrate the NFT market. However, the NFT floor price continues to fall, how long will it take them to admit defeat? Christmas is coming soon. That Mariah Carey song is already on repeat and people are out shopping for presents.
Shopping malls and stores are starting to decorate, which also means that 2023 is coming. It seems that over time, more and more Crypto products and services are appearing in all walks of life.
Luxury brands will certainly benefit from this shift. These world’s top brands are integrating technology, reshaping brand image and reshaping consumer experience. The fashion industry, in particular, is undergoing a historic transformation thanks to emerging technologies such as blockchain and NFTs.
This article focuses on exploring the trend of luxury brands integrating Crypto fashion with the help of NFT. But one question comes up again and again: Will this trend of buying products in the Crypto world really overtake the brick-and-mortar world?
Perfect combination of NFT and luxury fashion
In the wake of the massive spread of COVID-19, many brands have Crypto strategies in place.
NFT has huge potential and seems to have unlimited possibilities for the future of fashion, so it has attracted the attention of luxury fashion giants.
NFTs have changed the way brands interact with their customers.
But not only that, it even allows brands to innovate their revenue models by leveraging royalties and the secondary market.
“The ability to freely trade products creates new revenue streams by charging creators for secondary sales, an estimated $96 billion market in 2019.”
This conscious combination also helps brands cut expenses. Platforms such as Twitter and Discord have become new marketing channels, engaging communities at low cost and creating new ways for customers to communicate and interact with each other.
Many luxury groups such as Gucci, Dolce & Gabbana, Tiffany, Moncler, and Burberry have joined the competition in the NFT market.
Data collected by the “Vogue” Business Index in December 2021 shows that 17% of the brands in the index are already working with NFT. This number will increase in 2022 as more and more luxury brands jump on the NFT bandwagon and start experimenting with this new medium.
Founded in 1921, Gucci is an iconic fashion powerhouse. Known for its luxurious, high-end design and high-quality craftsmanship, it is now leading the luxury industry with NFT.
10KTF’s Gucci Grail NFT collection will be available in the first quarter of 2022, in collaboration with the brand’s luxury creative director, Alessandro Michele, and Crypto artisan Wagmi-san.
Part of the Gucci Vault metaverse, Alessandro took inspiration from his trips to Rome to create Neo-Tokyo – a floating city in a parallel universe.
“In this metropolis of the virtual world, he meets Wagmi-san, a famous Crypto artisan, crafting coveted legendary items in his 10KTF shop.”
In May, Dolce & Gabbana and Polygon-based virtual fashion company UNXD partnered with Chainlink to launch the DGFamily Glass Box. In addition, Moncler announced a partnership with Arianee, a leading Web3 branding platform, to launch a collection of NFTs in October. Moncler integrates Arianee’s NFT and Web3-based custody wallet solutions in its ecosystem to provide a seamless experience for the most active consumers.
The list goes on. However, as 2022 approaches, we are witnessing a sharp drop in Crypto prices, which in turn has severely impacted NFT sales.
expectations vs reality
OpenSea is the largest NFT market, and its user numbers will drop significantly in 2022.
During the period from October 24 to November 21, monthly trading volume hovered at a high of around $13 million, and has now fallen back to $4 million. This has greatly reduced the floor price (the lowest price for a single NFT) of some top brand NFT series.
For example, Gucci’s 10KTF Gucci Grail series, the price of casting an nft in the first generation of this series is 1 ETH (2800 US dollars at the time). However, considering the adjustment of the price of Ethereum and the decline in popularity, the floor price of OpenSea is currently 0.52 ETH (currently about $570).
Similarly, the floor price of the Dolce & Gabbana Glass Box series also dropped to 0.24 ETH from 0.4 ETH a month ago. The interest in NFT collections of other brands is also slowly fading. For example, Tiffany’s first NFT collection, called NFTiff, raised over $12.5 million.
The collection consists of 250 CryptoPunks-inspired NFTs priced at 30 ETH each. At the time, the collection sold out in about 20 minutes. Today, the floor price is much lower than the casting price.
Will NFT still be favored by luxury fashion?
Despite plunging prices, many luxury brands still see the NFT market as an integral part of their business. BeInCrypto reached out to representatives of some of these brands on Twitter for their thoughts on NFT adoption trends, and some brands have not yet been able to respond. Despite declining interest, Morgan Stanley believes that the metaverse, gaming and NFT industries will account for 10% of the luxury goods market by 2030.