What is it: The NFT craze has entered the fashion world.

Why it is important: Fashion brands need to decide how to respond as the fast-moving market for digital collectibles offers people a new way to communicate status in their increasing digital lives.

Leading fashion brands are examining the NFT space trying to understand the opportunities it could bring. But NFTs and cryptocurrencies are heavily hyped and are seen as risky and volatile.

Beneath the hype, there are signs that NFTs could have staying power. People have long assigned emotional and social value to physical objects like art and fashion goods. People tend to link designer handbags and fashion pieces to their creative identities. As we lead more and more of our lives online through social media and video games, the concept of collecting and displaying digital objects seems likely to grow.

Many fashion brands want to wait and see how the technology plays out in the space, but others are leading the way in application and use cases. LVMH understands the implications of the technology either through allowing their customers to bring their favorite products to the digital world, or through blockchain’s ability to combat counterfeit and bring light to the second-hand marketplace.

NFT strategies anchored in physical goods could be the key to unlocking the greatest value for the sector.

NFTs for Fashion Fad or Opportunity