We could sort of understand it for digital art, which is its own non-physical feedback loop. But now luxury companies, who peddle things such as handbags and 12-ply cashmere, are rushing to put out NFTs.
Gucci has started issuing one-of-a-kind digital sneakers as NFTs. The very high-end-niche Krigler perfume is releasing NFTs. Eric Pfrunder, formerly Karl Lagerfeld’s right-hand man at Chanel, just went on the board of Lukso, an NFT-blockchain company set up to service the luxury industry. But isn’t the whole point of luxury goods that you can touch and wear them and show them off I.R.L.? Make it make sense!
The Internet’s Velvet Rope
Here is your reminder that non-fungible tokens are digital entities, bundled with ironclad ownership certificates, which live on the blockchain, a permanent digital record book that facilitates crypto-currency exchange. Their purpose is to create uniqueness and traceable provenances for digital things, which can otherwise be copied ad infinitum, without any intrinsic “thing” value. If the Internet experience has up until now generally been democratic and cheap (just click and take a screen shot if you like the picture), NFTs are an effort to set up a velvet rope. They make authenticity part of the digital conversation, as well as scarcity, even in a realm where everything else is endlessly reproducible. (Remember: there is no spoon.)
This whole world seems ripe for extremely online crypto-bros who want to fork over payment in wildly valuable Ethereum coins for bragging rights to intangible things they can look at through hideous V.R. goggles while the rest of us are finally allowed to go back to brunch. These are the people who wear five-toed walking shoes. They are not the first ones you see front row at a fashion show. But luxury companies, smarting from their incomprehensible slowness to embrace e-commerce, think they’re onto something. In lean-and-mean times, they’re not looking to leave any more money on the table. “I was interested to see where we can go in this new world,” says Pfrunder, who thinks NFTs have deeper storytelling potential for brands than basic, hackable, open-to-everyone Web sites do today.
Luxury companies, smarting from their incomprehensible slowness to embrace
e-commerce, think they’re onto something.
At first glance, the luxury play for NFTs feels like a branded mall inside the Kim Kardashian game. Inside a digital world, you can look stylish. Great. But where’s the tissue paper? Where’s the orange box? It’s coming, but not yet.
For now, NFTs, as they function in the fashion-and-beauty world, cluster around two poles: marketing (or the arrival of branded goods in dematerialized space) and information exchange.
The former—think Gucci sneakers or digital-only fashion, a field that is actually growing rapidly—is of interest mostly to kids, whose digital and physical worlds have already merged. If you doubt this, just see how much money your 10-year-old is spending on Fortnite gear. Now imagine those Gucci sneakers no longer live inside Fortnite’s proprietary server but, because they are an NFT, belong to you and you alone. You can make a Snapchat filter out of them as well as rock them in Animal Crossing, or sell or trade them to someone else. They can cross platforms. It still sounds hopelessly uncool now—Animal Crossing? Really?—but then once upon a time so did e-mail.
Then there is information exchange, another way that digital and physical realities are colliding but that makes a bit more intuitive sense. Marjorie Hernandez calls this convergence “phygital.” The Berlin-based Hernandez, a former brand strategist, and her husband, Fabian Vogelsteller, a developer of ERC-20, a token standard that enabled the trade in Ethereum crypto-currency, are the founders of Lukso. “A future luxury product without a digital identity will be like having an iPhone with no battery,” Hernandez says. “It’s nice to look at but useless.”
NFTs are the way to give unique objects a sort of digital backup or twin, and give luxury companies a way to connect with secondhand shoppers, a valuable and growing market. “When every handbag has an NFT associated, you’ll know instantly what’s a fake,” says Hernandez. LVMH made a bet on this technology back in 2019—although not as NFTs—and, last month, the luxury conglomerate got Prada and Richemont to sign on, too.
Hernandez imagines a world where luxury handbags are embedded with unique chips, each one corresponding to an NFT, which can act as a digital storehouse for constantly updated brand communications, invitations, or membership benefits, as well as authentication codes that can’t be counterfeited, unlike the little plastic cards you get with your Lady Dior today. (Excuse me, ma’am, I believe your purse is receiving a download.)
But Does It Pass the Smell Test?
Once upon a time, or rather back in 2006, the Internet was a strange place to sell perfume, something most people buy only after smelling it. But e-commerce interested Krigler C.E.O. Ben Krigler, who was an early adopter, like his great-grandfather Albert Krigler was when he sent perfume samples through the mail from the South of France to Russia.
Now Krigler is doing NFTs, which lend themselves to some of his company’s very exclusive operations. Krigler had already developed a program to license exclusive use of some of the more than 600 perfumes in Krigler’s over-a-century-old archive. Starting from $50,000, for six months to a year you can be the only person who has access to a particular scent.
And now, for 5 to 10 units of Ethereum, you can lease your exclusivity as an NFT, which, in one item, contains inspirational artwork corresponding to your exclusive perfume and its olfactive pyramid, and a smart contract, with all its terms and conditions automatically executed. Because the transaction happens in Ethereum, it requires no bank transfers, so it can happen anytime, instantaneously.
“It’s a different way we have to work with our clients,” Krigler says—a growing number of whom are crypto-rich. Like any intelligent salesman, Krigler is showing up where his clients are hanging out now.
Excuse me, ma’am, I believe your purse is receiving a download.
As the full utility of NFTs is only starting to figure itself out, the user interface and brand experience are nonexistent. “When technologies are new, they are esoteric, and subscribing to them can feel like a cult,” says Hernandez. Not chic. One of Lukso’s aims is to help luxury brands find their way into the world of NFTs and the blockchain. Except this part of cyberspace is not yet built like the Web. There are no music or fashion films rolling out when you go to Coinbase to diddle around with your Ethereum stash. It’s dry and techy.
Blockchain’s decentralized structure means the crypto-currency that gets traded on it is not subject to governments, or banks—at least not yet. Conceptually, this is catnip for libertarian bros, who are, once again, not traditionally the world’s most stylish people. Yet when Lukso served as the platform for a drop of NFT fashion offerings by digital designers RTFKT and the Fabricant, and sold out in under an hour, crypto-bros were among those lining up to buy flamboyant earrings that they would use to adorn avatars and online identities. If they can promise us an augmented-reality future without five-toed walking shoes, we’re in.
Alexandra Marshall is a Paris-based Writer at Large for AIR MAIL