March 2022

How 6 Fashion and Beauty Brands Are Leveraging NFTs

Posted on March 25, 2022April 17, 2024 by Jessica Cheung

Non-fungible tokens (NFTs) present valuable opportunities for brands to sell digital items in the metaverse with an emphasis on exclusivity and uniqueness. The nature of NFTs allows creators to limit digital items, declare ownership, and inhibit duplication. “NFTs seem to have exploded out of the ether and are selling like 17th-century exotic Dutch tulips–some for millions of dollars”, according to Forbes.

What is an NFT?

The definition of an NFT according to the New York Times, is “an asset verified using blockchain technology, in which a network of computers records transactions and gives buyers proof of authenticity and ownership. NFTs make digital artworks unique and therefore sellable.” At its essence, an NFT is a digital collectible. All NFTs are non-fungible, meaning each digital signature makes it impossible for NFTs to be exchanged for one another. The digital assets created or minted as NFTs can depict art, videos, collectibles, virtual avatars, fashion, or music.

NFTs are a natural fit for fashion and retail brands as digital avatars in the metaverse will need outfits and accessories. As the value of an NFT is derived from its creator, well-established brands have a natural advantage in creating more valuable NFTs. NFTs also create a new way for brands to express their creativity and uniqueness without the production of physical goods, resulting in higher margins and improved sustainability.

Today, the primary option brands have to sell NFTs is through open marketplaces, that do not allow for custom branded experiences. In these NFT marketplaces, brands do not have control over other content that may be displayed next to their offerings. Another important consideration for brands when selecting a blockchain to mint their NFTs is carbon footprint and gas fees. Many of the current NFT marketplaces use Ethereum. Ethereum creates high greenhouse gas emissions, and is not the most environmentally-friendly option on the market today.

The Obsess Metaverse Platform enables brands to sell NFTs on their own e-commerce sites and offer a unique, branded experience to their customers. Obsess partners with leading brands to create these engaging, fully-branded virtual stores where brands can sell NFTs and physical products. Obsess works with an environmentally-friendly blockchain and handles all the technical heavy-lifting of the blockchain development work. The only piece that brands have to work on is the creative concept for their NFTs.

In 2021, NFT sales volume surged to $25 billion. Brands are exploring how to leverage NFTs and discovering early success with revenue and loyal customer engagement. Brands, particularly in luxury, are using NFTs as loyalty tokens and membership access cards. “NFTs will have staying power as long-term loyalty or membership cards that bring exclusive perks, and unique digital items that convey exclusivity and status,” Vogue Business reports. A Forrester report notes that “Consumers are more willing to try out innovative systems of value like NFTs than they have been at any point in the past 20 years.” The next six examples of brands leveraging NFTs illustrate the myriad of ways to create and sell digital collectibles.

How Brands Leverage NFTs

1.) Dolce and Gabbana’s Collezione Genesi

Dolce and Gabbana’s nine-piece collection of fashion NFTs, sold for $6 million. This sale was the largest fashion NFT sale which comes as no surprise to Nick Jushcyshyn program director of Virtual Reality and Immersive Media at Drexel University. Jushcyshyn commented, “You have world-renowned designers creating something absolutely unique, with attention to detail. It makes perfect sense that there would be an NFT collector in the world who would value it.” Morgan Stanley states that the sale of nine NFTs for $6 million “demonstrates huge potential for virtual and hybrid luxury goods.”

The Italian luxury fashion house sold the NFTs to Red DAO, a decentralized digital fashion organization; Boson Protocol; and leading NFT collectors Pransky and Seedphrase, according to the New York Times. Of the NFTs, five of the pieces were based on physical product designs by Dolce & Gabbana. The remaining four pieces were exclusive digital pieces based on sketches that were personally drawn and signed by the brand’s designers Domenico Dolce and Stefano Gabbana. The Doge Crown, with seven blue sapphires and 142 diamonds was the most expensive NFT sold, with a sale of 423.50 Ether or $1,257,654. The NFT offering emphasized exclusivity and access by providing two years of access to the highly anticipated and most exclusive event of the year, the Alta Moda show. Owners of the NFTs were also able to dress their avatars with the digital clothing item in one metaverse of their choosing.

2.) Gucci “Proof of Sovereignty”

Gucci participated in Christie’s first NFT auction named “Proof of Sovereignty” in May 2021. The auction pieces consisted of famous 20th-and-21st century digital art, including works by the late Nam June Paik and new media artists. Gucci’s NFT took the form of a digital animation from a fashion film, inspired by the “Gucci Aria” collection, co-directed by Creative Director Alessandro Michele and director and photographer Floria Sigismondi. Gucci’s NFT sold for $25k at the auction. Curator LADY PheOnix commented, “These practices rarely get implemented outside of museums and academia, but are essential for the long-term preservation and storage of digital art. With Christie’s as the leader in NFTs, they are helping to secure the future for all new media artists.”

3.) Burberry X Blankos Block Party

Burberry partnered with Mythical Games to launch an NFT collection in “Blankos Block Party”. The experience is a multiplayer game featuring digital vinyl toys known as Blankos that live on the blockchain. In the game, a limited-edition, limited-quantity Burberry Blanko, a shark named Sharky B, was an NFT that could be purchased, upgraded, and sold within the Blankos Block Party marketplace. Burberry also sold branded in-game NFT accessories, including a jetpack, armbands, and pool shoes, which players could apply to any Blanko they own. The estimated revenue was around $375K (initial offering of 750 units at $300 p/u). The NFT resold for as high as $1,000 on the game’s marketplace later.

4.) Karl Lagerfled’s Digital Avatar

Luxury fashion house Karl Lagerfeld released two NFTs in the form of Karl Lagerfeld digital figurines. These animated caricatures of the late designer Karl Lagerfeld were sold on The Dematerialised, a digital fashion marketplace, according to WWD. The digital figures were created in collaboration with the London-based street artist Endless. The two versions of the NFT featured graffiti by Endless with tones of blue and pink scrawled all over the Karl Lagerfeld digital avatars’ outfit. The first version of the collectible was priced at $84.92 and available to 777 consumers. The second version of the collectible was priced at $195.21 with 77 editions.

5.) Clinique’s MetaOptimist

The Clinique MetaOptimist introduced three unique NFTs based on their most iconic products, including the Moisture Surge and Black Honey Almost Lipstick. Clinique gave away three NFTs to their Smart Rewards members via a sweepstakes. To enter, participants had to sign up for Clinique Smart Rewards, and then post content that conveyed optimism on Instagram, TikTok, or Twitter with the hashtag #MetaOptimist. The winners received early access to sold-out items and an assortment of fan-favorite products once a year for a duration of 10 years.

6.) NARS Orgasm Experienced

NARS released three NFTs as digital art inspired by NARS products and produced by female artists. The pieces for sale included physical NARS makeup bundles with products from the NARS Orgasm collection. One NFT, an audio, video, and visual piece by DJ-music producer Nina Kraviz entitled “Take Me” retailed for $500. This NFT was paired with physical NARS products that were the equivalent of $500. Another NFT “Consume Me” by renowned artist and collage Sara Shakeel was free of charge. The NFT by fashion designer and multimedia artist Azede Jean-Pierre called “Captivate Me” retailed for $50 and came with a limited-edition Orgasm blush-lip balm duo.

Brands can work with Obsess to offer NFTs in a highly visual and interactive branded experience on their own website. Providing an end-to-end solution, Obsess takes care of both the technical work and the branded experience behind creating and selling NFTs, while keeping sustainability as a priority. Contact us to learn about how your brand can enter the metaverse and reach a new audience of crypto-enthusiasts by offering NFTs seamlessly with the Obsess platform.

The Next Frontier of Omnichannel: Experience

Posted on March 9, 2022April 17, 2024 by Jessica Cheung

For years, omnichannel has been about logistics. Retailers’ focus with their omnichannel strategies was to enable seamless availability of inventory across brick-and-mortar and digital channels. Omnichannel technologies focused on showing store availability of individual products on e-commerce sites, enabling BOPIS (buy online, pick up in store), and making products available on new digital channels such as Instagram Shopping.

Retailers are now shifting to focus on omnichannel experience – i.e. how customers experience their brand across different channels. The brand experience today is very disparate across the brick-and-mortar and digital channels. The primary brand manifestation channels were stores, events and fashion shows. Whereas the online experience lacks in comparison with every brand represented as just a grid of thumbnails in a database format on e-commerce sites. Retailers are now looking to bring that immersive brand experience from in-store to online. Once logistics are solved, experience is the next frontier of omnichannel.

Online shopping will become an experience with e-commerce sites offering a branded and discovery-driven shopping interface. A brand’s online presence will no longer be limited to a monotonous database grid of items. The new engaging experiential e-commerce will mirror the brand immersiveness of an in-store experience and bring together the best of online and offline channels in the form of virtual stores.

When the beauty brand NARS embraced omnichannel experience with their first virtual flagship store, Barbara Calcagni, President of NARS said, “NARS is known for our immersive boutiques across the world, but over the past year, we’ve seen a significant business shift towards e-commerce, and we recognize an opportunity to enhance the consumer experience. The new virtual flagship brings together innovative digital tools and the special NARS world to life, enabling us to engage our consumers in an even more impactful way”.

What is Omnichannel Experience?

Omnichannel experience is a marketing strategy that allows a retailer to communicate an immersive brand message to its consumers. The goal here is to develop a consistent customer experience spread across offline and online channels. When this is achieved, an omnichannel strategy leads to complete alignment of all channels, boosting not only consumer interaction, but also the brand’s image and identity.

A big part of an omnichannel strategy is creating a digital shopping experience that increases brand recall and makes buying a product enjoyable. The focus here moves towards ensuring high customer engagement. A successful omnichannel experience strategy with a consistent brand image across a multitude of channels is necessary for a brand to stay competitive in today’s landscape.

What is the virtual selling channel?

Virtual selling will play a significant role in the next frontier of omnichannel. This new channel will be vital in enabling engaging, interactive experiences in online shopping.

Virtual selling is a combination of technologies, such as virtual stores, sales live chat platforms, and livestream video shopping that all allow brands to foster a more authentic and meaningful connection with consumers. Forward-thinking brands have already built new teams that will strategize, manage, and optimize this new virtual selling channel and be responsible for all these new technologies collectively.

Digital shopping will become an experience in which the consumer is given the power to navigate their own journey. “Digital engagement is moving from passive to active creation—shifting creative power to the user,” according to the Wunderman Thompson Intelligence Report Into the Metaverse. Today leading brands are offering consumers this empowering, interactive shopping experience through virtual stores – a new sales channel in a brand’s omnichannel mix.

What are the benefits of leveraging virtual stores for an omnichannel strategy?

According to Vogue Business, “One of the most significant omnichannel evolutions that will continue into 2022 is a focus on digitizing the high-touch experience once only possible in stores”.

A virtual store provides the perfect platform for digitizing the immersive experience previously achievable only in a physical store. Virtual stores are at the forefront of experiential e-commerce and are an entry point into the metaverse. They put a customer in a 3D version of the in-store shopping experience, filled with advanced services and experiences.

The virtual space can emulate a brick-and-mortar store and capture the brand’s identity in a photorealistic 3D virtual store. “Authenticity and interactivity are also vital in virtual spaces” according to Vogue Business. This new virtual shopping format can also be entirely digitally rendered in 3D using CGI, enabling brands to set up a creative concept store or a fantastical location. Customization of a virtual store allows brands to create unique, creative, and engaging experiences on their e-commerce websites, while communicating an authentic brand image.

For example, in Salvatore Ferragamo’s “House of Gifts” virtual store, customers are brought to a gorgeous villa showcasing the Italian heritage of Ferragamo, a key part to the brand’s identity. The “House of Gifts”, a unique, custom 3D-rendered experience, is designed to convey this heritage. Virtual stores offer highly interactive elements that enhance user engagement such as digital avatars, augmented reality try-on, quizzes and gamification.

Virtual stores will be at the core of a competitive omnichannel strategy focused on experience.

How to get started?

You can begin setting up your virtual selling channel with Obsess. Obsess is an Experiential E-commerce Platform enabling brands and retailers globally to offer immersive 3D virtual shopping experiences. Obsess creates photorealistic and 3D-rendered virtual stores that serve as an entry point into the metaverse. Virtual stores powered by Obsess can be marketed in a variety of ways including social media channels, mobile apps, websites, and QR codes. A virtual store is a proven marketing and sales tool today that forms the basis of your virtual selling channel.

Developing an omnichannel experience strategy to move beyond omnichannel logistics which are table stakes now, is key for any brand looking to stay relevant. An effective and efficient strategy allows for a brand to be more authentic to its values, while beating competition with a phenomenal interactive user experience. Virtual stores bring the inspiration and discovery experience of offline shopping into online, and open the door to a new marketing channel for retailers and brands. Learn how to start your omnichannel experience journey today and create your own virtual store.

Why Brands and Retailers Need to Enter the Metaverse Now

Posted on March 1, 2022April 17, 2024 by Jessica Cheung

What is the Metaverse?

The term “metaverse” originally appeared in Neal Stephenson’s science-fiction novel Snow Crash. Three decades later, the term metaverse is losing its association with science fiction and becoming a reality now. Google Analytics shows interest in the metaverse has accelerated at a rapid rate with the number of searches for the word increasing more than tenfold from 2020 to 2021. Vogue Business states the metaverse is “the next stage of how we use technology—the successor of the internet age”.

With all the heightened interest in the metaverse, there have been differing definitions of the term. The Wunderman Thompson Intelligence Report “Into the Metaverse” highlights the ambiguity around the term, “Some call it the new internet, others a democratized virtual society, yet others the convergence of virtual and physical realities, persistent virtual spaces, or a digital twin of our own world.” Matthew Ball, a Venture Capitalist, Managing Partner at early-stage venture fund EpyllionCo, tries to create clarity around the term commenting, “The best way to understand the metaverse is to think about the idea that we will spend an ever-increasing amount of our lives connected to persistent virtual simulations.”

“The Metaverse is the New Mall” defines the metaverse “as a connected, 3D virtual world where consumers, through their individual avatars, are able to interact in real time with the digital environment and everything and everyone in it. In this virtual universe, users participate in activities like shopping, gaming, learning, working, and attending concerts and events—but they also use the space to just hang out and socialize with one another.”

According to Vogue Business, the metaverse comprises “digital fashion, social media, augmented reality, virtual stores, video games, and non-fungible tokens (NFTs)”. Many brands and retailers had already begun exploring these areas of the metaverse before interest in the term started to peak after the advent of Facebook’s Meta.

Brands will have an unprecedented opportunity to create in the metaverse. In the metaverse, brands can design their own environments devoted to shopping that will allow consumers to go beyond the simple transaction of searching and filtering. Shoppers will be able to interact with one another and with brands and their products. The metaverse will empower consumers to design, clothe and accessorize their digital avatars, attend fashion shows, and participate in other activities and events. According to a Wunderman Thompson Intelligence Report Into the Metaverse, “Digital engagement is moving from passive consumption to active creation–shifting creative power to the user.” Brands need to begin defining how they will represent themselves in the metaverse because shoppers, especially younger demographics, will expect to seamlessly engage with every aspect of their online lives through the virtual world we will inhabit.

Why is Interest in the Metaverse at an All-Time High?

There are a handful of reasons why retailers and brands should begin positioning themselves for the metaverse, a market opportunity that Bloomberg Intelligence estimates will reach nearly $800 billion by 2024.

Facebook’s rebrand as Meta underscores how timely it is for brands to start building metaverse strategies into their business plans in order to establish a distinctive presence in this new digital sphere. Another reason why there is heightened interest in the metaverse is technology has evolved to the point that it is possible to represent digital interfaces in immersive 3D graphics that mirror the real world, as opposed to the 2D “page” interface that is still typical on most e-commerce sites. These advances in computer hardware and software enable the metaverse.

Additionally, the pandemic accelerated consumer adoption of immersive technologies and the metaverse. The study from Wunderman Thompson reveals “As COVID-19 restrictions ease, the acceleration of tech and its prominence in many lives will continue, with 76% of people saying their everyday lives depend on it and over half saying their happiness depends on it.” People are spending a considerable amount of time and placing a high value on their digital self to the point that their in-person lives are merging with their digital lives. The metaverse can be viewed as a natural progression of the convergence of people’s physical and digital lives. With the metaverse, people will spend their daily activities from socializing to working in virtual environments.

Studies have shown that people already are spending more time interacting with their friends on social media and gaming platforms than in real life. According to the US Bureau of Labor Statistics (July 2021), people in the US spent on average 6.5 hours per day online. People are only spending around 65 minutes per day seeing friends in person. Post-pandemic this ratio will increase further in favor of people spending more time on virtual interactions. The Wunderman Thompson Intelligence Report Into the Metaverse states “As COVID-19 restrictions ease, the acceleration of tech and its prominence in many lives will continue” and sites that “93% of global consumers agree that technology is our future and over half (52%) say their happiness depends on it.”

How Brands are Already Leveraging Gaming, NFTs, and Virtual Stores

Gaming, one of the core components of the metaverse, has become an increasingly popular way for younger generations to connect and socialize virtually. The Wunderman Thompson Intelligence Report notes that 59% of the US population classified themselves as gamers, including 90% of Gen Zers. This statistic is highly relevant to brands and retailers since the younger generations are gravitating towards gaming as means of entertainment and socializing. Luxury brands are already taking note of the younger consumers’ interest in gaming and are selling their products on gaming platforms.

A Morgan Stanley report “Luxury in the Metaverse” states “metaverse gaming and NFTs will constitute 10% of the luxury goods market by 2030—a $56 billion revenue opportunity.” Brands are finding success in consumer engagement with virtual goods and NFTs. The Metaverse Mindset: Consumer Shopping Insights survey finds that 74% of Gen Zers have purchased a digital item, such as an accessory, skin, or garment for their avatar, within an online video game. The NFT market has had exponential growth. Morgan Stanley predicts that the NFT market will grow to $236.71bn by 2030 and forecasts that luxury digital/hybrid collectibles will be a $19.17bn market.

Many brands and retailers are leveraging virtual stores as an entry point into the metaverse. Consumers who are shopping in these 3D immersive virtual stores are finding them highly engaging. In fact, 70% have made a purchase in a virtual store. Brands are viewing virtual stores as a means to take their first step into the metaverse, create high customer engagement, and generate ROI. Learn how your brand can sell physical and digital products in the metaverse with a virtual store.