How NFTs are democratizing the fashion industry – WWD

NFTs have been the talk of the fashion industry for months now, bringing a new level of exclusivity and opportunities to turn digital designs and collections into extremely valuable and unique collectibles.

With so much potential, it’s very much a time of experimentation for brands as they navigate the metaverse and find a meaningful place within it. Companies like SmartMedia Technologies, a Web 3.0 platform that drives first-party data acquisition, user engagement and loyalty across digital and mobile-first audiences, are part of this navigation, helping brands understand what the industry should look like and provide foresight. into how the industry continues to grow shaped by that vision.

Michael Chock, head of solutions at SmartMedia Technologies, told WWD, “A big part of what we’re looking at right now is that the NFT market is about 95 percent speculation. You look at some of these NFTs that are falling and you see that they are very successful, and then you look at some of them that a celebrity can’t even sell. We work in both areas, but what our true belief is around the NFTs is less about speculation and about how an NFT becomes a currency of engagement and what we’ve built as our company has been founded in this robust history of advertising technology.”

Notably, the original team at SmartMedia Technologies built an ad server that they sold to Microsoft for $6 billion and later to Facebook Marketplace.

“Now we’ve built the first enterprise marketplace for creators and brands and agencies so we can use NFTs as a currency of engagement as a way to build community and as a way to monetize IP,” Chock said. “We take it very much from the side of how do we use it for loyalty, how do we use it for consumer engagement and how do we create really unique brand experiences that add more value than let’s drop a new shoe and hope people buy it?”

Operationally, the company has a TV agency in the group and works in Web 1.0, TV, Web 2.0, all digital and now Web 3.0. The goal is to make it extremely easy for consumers and brands, noting that having all these features makes for a nice transition as brands work to figure out strategies going forward.

In contrast, many of the solutions that are available are point solutions that are only in Web 3.0. The problem with that, Chock said, is that it makes it challenging for brands to bridge the gap for consumers who are overwhelmed to see that in order to buy something, they may have to download technology to get the token in another specific crypto wallet for to finance the desired action.

This multi-step process has created a growing sense of negativity in online forums. Chock explained that this speculation also comes from consumers’ discomfort with buying things that don’t have a direct connection to a physical, tangible part.

“Even when you look at the NFTs that have been successful, art is a great concept that is already challenging for me; it’s easier for people to wrap their minds around it than something like land in the metaverse,” Chock said. “Where I would counter that is when you think about what is a metaverse, it’s just a digital ecosystem, and we’ve been spending money in the digital ecosystem for ages.”

As an example, Chock points to Farmville, where people pay money to buy fake cows and fake crops and fake land in a metaverse where they pay real money. Call of Duty is another massive metaverse that people pay not only to access, but also to upgrade tools, technology and everything in there.

And many consumers are becoming more comfortable buying digital goods in exchange for regular currency. But where the mental shift hasn’t happened for many consumers, Chock said, understand the benefits. They want to know when they buy an NFT and what they are getting.

In response to this, some of the brands that SmartMedia Technologies works with have created what are known as “utility tokens”, meaning that owning the token gives the consumer ownership of a physical item or doing something.

“I think a big thing for fashion is looking at the Supreme model,” Chock said. “I used to live a block away [a] Supreme store in SoHo, and every morning when you know it’s going to be a drop, people start camping the night before in front of the Supreme store. But imagine if you do this for a fashion brand that uses NFT so that you have fans engaged in a loyalty program, that they take valuable actions for your brand, whether it’s following you on social media, whether it’s posting pictures of yourself in their clothes. , they get a digital token and only that NFT will have access to the new drop.”

And the community of queuing would not disappear; instead, it creates a community in a virtual setting so that engagement that benefits the brand and the consumer gets new content.

“I think the next step for NFT in the fashion industry is to replicate some of this similar methodology if people have reasons that people are used to it,” Chock said. “It’s this transition to how do you get consumers into this frame of mind really easily? Where we’re focusing and where we think the industry is going to go is to say now how do we use NFTs to build marketplaces and loyalties, rather than just these one-off declines.”

Putting it in the context of luxury fashion, Chock said to imagine buying a Birkin bag. “It’s a beautiful piece of function, but buying a Birkin bag is also a statement. It’s saying that I have status, I have wealth if I have these assets, and when you carry that Birkin bag, your sphere of influence only the people who see you. Now the idea of ​​NFTs and fashion is to say, “OK, what if instead of that Birkin bag you buy a digital Birkin bag or imagine if they came as companions, so when you bought a Birkin, do you get an NFT?” Suddenly your sphere of influence in which you post becomes much larger.”

SmartMedia Technologies sees this specifically with the millennial audience of consumers when they buy things and want to show not just immediate contemporaries, but create a greater impact of the status and value of these fashion brands in their digital ecosystems – the digital ecosystems are much bigger than the physical ones . Still, some consumers don’t even realize when they’re shopping in the metaverse or Web3.

Looking ahead, Chock said he believes educating the consumer about the metaverse is a shared responsibility of the consumer as well as the brand and technology companies. With endless possibilities for digital marketplaces and AI events, as all brands become part of the metaverse, Chock said it’s important to be authentic and offer the consumer — and their impending avatars — something of value.

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