In many of my previous newsletters, I have introduced fashion brands that are using NFTs to add value and advantage. Today, I am diving a little deeper and explaining whether these digital forays have been paying off.
It is an interesting time, with the NFT market in freefall and literally every media channel claiming that NFTS have boomed and have busted. I wonder if this is the end of the saga? If you’ve been following me for some time, you’ll probably guess that I am still a believer. Certainly, the majority of NFTs will never come back to their previous levels or at all, but I do believe in Darwin’s theory that the fittest will survive. The creators and brands that develop and use NFTs best will win out and I do believe that the best is yet to come.
CEO of Nike, John Donahoe, said “the accelerated consumer shift toward digital is here to stay.” That statement doesn’t seem that out of the box today but consider that Donahoe made this statement two years ago. At the time, Nike was already shifting to becoming a more digitally focused company. Nike pivoted their retail strategy and cut ties with thousands of retailers across the country including department stores and wholesale outlets. In this way, they could remain in control of their inventory as well as their customer data. Nike was way ahead of the curve in terms of the future of shopping and customer behavior. Nike understood that digital interactions lead to higher margins and increased a customer’s lifetime value.
With this strategy in mind, in December of 2021, Nike acquired RTFKT (pronounced “artifact”) for approximately $100M. RTFKT was a leader in virtual sneakers, collectibles, and experiences. So, with RTFKT already ahead in the space, Nike was able to build on its momentum and convert their $100M investment into $185M in revenue in just the past 8 months. To put this into perspective, RTFKT had done $70M in total sales volume and $4M in revenue when it was acquired by Nike and since then, it has done $1.2B in total sales volume. I’d say that wasn’t a bad acquisition by Nike, wouldn’t you?
Here’s a Chart with the top 12 Brand Leaders (Dune analytics):
In the Number 2 slot with $25.6M in revenue is D&G. Dolce & Gabbana is a pioneer in the digital, physical, and experiential ecosystem. They have been investing heavily in NFTs, curating exclusive drops, and collaborating with top artists to stand out as a leader with fashion in the metaverse.
Another player in this market who has been successful is Tiffany & Co. Remember my post from a few weeks ago when Tiffany launched their CryptoPunks necklaces? That strategy is also seeing phenomenal results. Tiffany & Co. is selling a limited edition of high-end jewelry for $50k/piece, creating a buzz and FOMO along with a desire for people to flex their status. Low and behold, the limited edition sold out instantly. Tiffany is now working on the next edition. Their total revenue is $12.6M which is the 3rd highest in NFT revenue, but considering it is their first and only NFT based collection, it seems like they have a winning formula.
The last brand I want to mention is TIME Magazine.
What is incredibly interesting about TIME is that it is the first print legacy media company that has embraced the NFT space from inception and has built a strong customer base from its passion. TIME’s president Keith Grossman is steering the company into the future by investing in web3 and his belief in the future of the digitization of the magazine.
TIME has previously released a full magazine issue as an NFT, they have donned NFT artwork as their covers, they have had 7 collection drops including TIMEPieces, and accept digital currencies for TIME subscriptions. It is not surprising that TIME’s NFT offerings have been purchased 98.8% of the time by seasoned collectors, whereas most of the rest of the brands have a mix of newbies and veterans.
This is probably because Grossman has been building TIME’s brand and community diligently with thought and purpose. He has offered his collectors experiences that give access to exclusive speakers and events while also focusing on charitable giving. He understands that TIME has a deep 100-year history, and he wants to connect readers to the next 100 years to come. Furthermore, Grossman has announced TIMESquare which is a Square in the Sandbox Metaverse which will be a hub that will bring together the artistic capabilities of the community and all historic branches of TIME including TIME Studios and TIME for Kids into the metaverse.
It is difficult to predict the future, but I do believe that those with vision and those that can deliver their vision effectively will succeed. There will be little room for fraudsters and those that hope to make a quick buck like before, now is the time for innovation, imagination, and purpose.
Stay Curious!
Iris Pearlman
