NFTs have been making waves in the fashion industry for several months now, bringing a new level of exclusivity and opportunities to transform digital designs and collections into extremely valuable and unique collectibles.
With such potential, now is largely a time for 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 for digital and mobile-first audiences, are part of this navigation, helping brands to understanding what the industry should look like and providing forecasts. in how the industry continues to grow, shaped by this vision.
Michael Chock, Director of Solutions at SmartMedia Technologies, told WWD: “A lot of what we’re looking at right now is that the NFT market is about 95% speculative. You look at some of these NFTs that drop and see that they’re wildly successful, and then you look at some that a celebrity can’t even sell. We work in both spaces, but our true belief around NFTs is less about speculation and more about how an NFT becomes an engagement currency and what we’ve built as our business has been built on this solid ad technology history.
Notably, the original SmartMedia Technologies team built an ad server which they sold to Microsoft for $6 billion and later to Facebook Marketplace.
“Now we’ve built the first enterprise marketplace for creators, brands and agencies so we can use NFTs as the currency of engagement as a way to build communities and as a way to do and love to monetize the intellectual property,” Chock said. “We consider on this side how do we use it for loyalty, how do we use it for consumer engagement, and how do we create truly unique brand experiences that are more valuable than to drop a new shoe and hope people buy this?”
Operationally, the company has a television agency in its group and serves to operate in Web 1.0, television, Web 2.0, all things digital and now Web 3.0. The aim is to make it extremely easy for consumers and brands, noting that having all of these features provides a smooth transition as brands work to find strategies moving forward.
In contrast, many of the available solutions are point solutions that are only in Web 3.0. The problem with that, Chock said, is that it’s hard for brands to bridge the gap for consumers who are overwhelmed by seeing that to buy something they might have to download the technology to get the token in a other specific crypto wallet to fund the desired measure.
This multi-step process has created a growing sense of negativity in online forums. Chock explained that this speculation also stems from consumers’ discomfort with buying things that don’t have a direct connection to a physical, tangible piece.
“Even when you look at successful NFTs, the art is a great concept that is already a challenge for me; it’s easier for people to make up their minds than something like landing in the metaverse,” Chock said. “Where I would counter that is when you think about what a metaverse is, it’s just a digital ecosystem, and we’ve been spending money in the digital ecosystem for ages.”
As an example, Chock cites Farmville, where people pay money to buy fake cows, fake crops, and fake land in a metaverse where they pay real money. Call of Duty is another massive metaverse that people not only pay to access, but also to upgrade the tools, technology and all that stuff inside.
And many consumers are becoming more comfortable with buying digital goods in exchange for normal currency. However, where that mental shift hasn’t happened for many consumers, Chock said, is understanding what utility is. They want to know when they buy an NFT and what they get.
In response to this, some of the brands SmartMedia Technologies works with have created what are called “utility tokens,” which means that owning the token gives the consumer ownership of a physical good or does something.
“I think a good thing for fashion is to look at the Supreme model,” Chock said. “I lived a block from [a] Supreme store in SoHo, and every morning when you know, there is going to be a drop, people who start camping the day before in front of the Supreme store. But imagine if you do this for a fashion brand using NFT so that you have fans engaged in a loyalty program, that they take high-value actions for your brand, whether it’s following you on social networks, to post photos of you in their clothes, they get a digital token and only this NFT would have access to the new drop.
And the queuing community wouldn’t go away; instead, it creates a community in a virtual setting so that engagement that benefits the brand and the consumer receives 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 why they’re used to it,” Chock said. “It’s this transition of how to get consumers into that mindset very easily? Where we’re focused and where we think the industry is going is now how do we use NFTs to build markets and loyalty, rather than just these one-time dips.
Putting it in the context of luxury fashion, Chock said to imagine buying a Birkin bag. “There is a nice feature, 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 wear this Birkin bag, your sphere of influence is only the people who see you. Now the idea with NFTs and fashion is to say, “OK, what if instead of this Birkin bag, you buy a digital Birkin bag or imagine yourself they were coming as companions so when you buy a Birkin you get an NFT?” All of a sudden your sphere of influence where you post this becomes a lot bigger.
SmartMedia Technologies sees this specifically with the millennial audience of consumers when they buy things and want to show not only immediate contemporaries, but create a bigger impact on status and value than these fashion brands in their digital ecosystems – the ecosystems digital ones being much larger than the physical ones. Yet some consumers don’t even realize they’re operating in the Metaverse or Web3.
Looking ahead, Chock said he believes consumer education about the Metaverse is a joint responsibility of the consumer as well as the brand and technology companies. With endless possibilities for digital marketplaces and AI events, while all brands are part of the metaverse, Chock said it was imperative to be authentic and offer the consumer – and their impending avatars – something of value.
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