NFT stands for New Frontiere of Traceability?

“How can NFT and blockchain deliver or add value to the supply chain’s traceability?”

“Good point, Massimo! If the question is what the Blockchain and NFTs have to do with traceability, the answer is nothing!

But the blockchain gives transparency and trustworthiness. That’s an extraordinary value.

Let’s do an example: you are a fashion brand that tracks and collects data along the supply chain, and centralizes them. This is already good. An objection could be “Who assures me that these data are true? Maybe you have modified them.”

Let’s now assume that the usual brand publicly inserts them in the blockchain. 

The blockchain guarantees the truthfulness, transparency of data and information and, therefore, becomes an element of trustworthiness for the consumer. “

“And do you think consumers understand the value of the blockchain?”

“Yes, they are increasingly aware and skeptical where there are no authoritative and trustworthy sources. Entering data into the blockchain means that the company is committed and its commitment is huge. “

 

This is a short exchange I had a few weeks ago with Marco Sabatini, Former Director of innovation at Moncler, senior advisor, and a great innovation expert.

I had the pleasure to meet him during the masterclass he held within Startup Bootcamp, in which he focused on the value of blockchain and NFTs in the fashion industry.

Yep, NFTs. 

For some months, we have been hearing about them and they have seriously entered the fashion industry.

NFT, also known as digital twin, means “Non-fungible token”, a non-replaceable token.

 

To be practical: a cryptocurrency can be exchanged for another cryptocurrency. 

 

The NFT, on the other hand, is a unique digital element that represents only the object it is associated with. Its uniqueness is protected by a blockchain tracking system.

A NFT can be a digital artifact such as a song, a gif, or a drawing.

Even if, as a digital file, a NFT can be reproduced and copied, its signature ensures that the file it is associated with has its individuality, a non-fungibility, which certifies and protects its intellectual property.

Let’s take a step back about 30 years to understand their relevance even better.

In the beginning, it was Web 1.0 (we are in the mid-90s): the main feature was the ability to have free access to all information in a few minutes, without leaving home or office.

Then came Web 2.0 and, with it, the chance of sharing that same information, but also creating new ones, and having experiences with other users. 

How? Through comments on the websites, the birth of the forums, the spread of social networks.

Finally, we are now in the era of Web 3.0, also known as the “token economy”, the one where value is conferred and transferred through cryptographic security tokens and blockchain.

In this context, NFTs fit in.

 

What are the identifying elements of a NFT:

  • Unique
  • Generated by the brand
  • Corresponds to the product
  • Include all the info
  • Transferable
  • Carries its history
  • Incorporate assets and access rights
  • Allow a private communication channel with customers.

 

NFTs have benefits for both fashion brands and consumers: on the one hand, they guarantee the authenticity and originality of the product; on the other, the chance of having immersive experiences before and after the sale.

Those who conceive of NFTs as products that do not exist or that are completely detached from the real world, have not fully understood the ongoing revolution and the concept of metaverse.

 

What are the NFT opportunities?

According to a study by Morgan Stanley, by 2030 metaverses, gaming and NFTs will represent 10% of the luxury market.

In particular, it’s estimated that gaming could add 20 billion in turnover to the market and the NFT dedicated to luxury collectibles an additional 25.

We could summarize the opportunities that NFTs give in:

  • Digital twin: enrich the ownership experience
  • Social & Community NFTS: upgrade the community engagement
  • Exclusive & scarce digital assets: extend the metaverse immersion.

 

But how can we monetize the NFT of a fully digital product?

In this case, it is fundamental to divide the targets on a generational basis.

For what concerns adult people, the most powerful lever is scarcity. The idea of ​​a single piece, a prohibitive price, is already enough to drive people crazy. 

Just think of Dolce & Gabbana High Fashion golden dress, which was auctioned last September for more than a million dollars. It doesn’t exist. 

The 620 pairs of sneakers produced by RTFKT Studios and designed by Fewocious, generated sales of $ 3 million in 7 minutes. They don’t exist either.

As for Gen Z, they are the first generation born environmentalists, but also the one that caused the boom of the fast fashion trend.

If you want to attract them, it is better to push on economic savings. And this is something that appeals to many. 

 

“Several brands are gearing up to dress the influencers they have under contract through augmented reality, saving on shipping and production costs.”, confirms Carlo Moltrasio, Senior manager of Bain & Company.

 

In conclusion, adding value is the primary advantage of NFT, while authentication is the first step to enter Web 3.0 and the future that is already here. Less intangible, virtual, and ephemeral than you think.

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