Maddie Raedts is Founder & CCO at IMA || Global Head of Social for Fashion & Luxury at MediaMonks || Forbes 30 Under 30.
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Late last year, the market for non-fungible tokens reached a value of $41 billion. Seemingly out of thin air, unique digital objects that are tied to blockchain technology blew up. Naturally, the fashion and luxury industry—known for innovating to speak to the moment and shifts in culture—has decided to go all in. In doing so, breaking out of business-as-usual and into new playing fields has been key. At the moment, Web3 is one of the most prominent new kids on the block. It’s something we’ve helped clients with at Media.Monks.
Web3 represents the next era of the internet. It’s about rewiring the inner workings of the web and changing how information is stored, shared and owned by using blockchain. “In theory, a blockchain-based web could shatter the monopolies on who controls information, who makes money, and even how networks and corporations work,” according to a writer for Harvard Business Review.
In practice, many leading brands are relying on Web3 for their community-building, which is central to the customer journey in the virtual era. We’re seeing more and more fashion brands adding digital layers to elevate their existing collector communities, offering NFTs that consumers can either use to dress up their avatar in the virtual world or to access exclusive drops in the real world. NFTs are targeted at a pool of people, whether large or small, who find value in a specific project or product—essentially creating a new sort of community space for fans, online and offline.
Following a long hiatus from in-person events, I think we can safely say that people are hungry for real-world connections. Many of those working on bringing Web3 to life know it, so they are focusing on creating experiences that can exist in both the virtual and the physical world—and the fashion and luxury industry is getting heavily involved.
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Despite Downturns, Brands Prepare For The Future Of Digital
Despite the crypto gold rush, many people’s excitement, energy and investments in this space are dampening due to the recent crypto downturn. We’re seeing many brands curbing stunt-like NFTs, rethinking their metaverse strategies and putting a halt to their Web3 hiring.
A safe bet? Sure.
It’s important to keep in mind that the world of decentralized finance has a history of volatility. For example, bitcoin has plummeted before, but then it’s crawled back up again. However, I think the crypto downturn is different this time because many other industries, like fashion and luxury, are now also involved in the Web3 space.
Industry experts argue that now is the opportune time to simply ride out the storm, and educate, innovate and build along the way. Don’t quit your efforts cold turkey, but strategize for the future. They are likening the current situation to the dot-com bust decades ago, which ultimately made brands that focused on securing long-term strategies more viable.
Front-runner brands experimenting in this space don’t appear to be backing down, but instead are looking ahead to the future. They are more carefully scrutinizing their investments in NFTs and Web3 and focusing on building long-term strategies. This means fewer PR stunts and more meaningful use cases. The NFT community has quite a short attention span and moves on to the next thing very quickly. My advice is to be agile and experimental, but build now for when the bull run begins again.
Why? Because Web3 and a brand’s community-building go hand in hand.
Tying Offline And Online Lives Together Through Web3
What makes a solid Web3 strategy? Rather than the mere monetary value of your brand’s NFT assets, community responsiveness is a main indicator of effectiveness. There’s great value in fostering an NFT community because it can help create a brand’s community culture—right now, the bear market allows brands to focus on this. In the end, what brand doesn’t want a loyal and close-knit audience of fans who truly like what you do?
Community-building can happen online or offline, but it’s much more powerful when it results from a combination of both. Luckily, two years of intermittent lockdowns didn’t make us forget about the possibilities of meeting people in person—quite the opposite, many of us are longing for it. What makes Web3 exciting is that it facilitates mobility between online to offline. The new web involves much more than simply retaining followers on Instagram; it revolves around engaging and connecting with your audiences. Meet-ups are vital to making this possible and, above all, successful.
Just look at brands like the Bored Ape Yacht Club (BAYC) and Dapper Labs, which have built thriving NFT communities. Pairing hype with exclusivity, BAYC invites fans to virtual spaces as well as real-life events. To simply call these happenings “parties” would be an understatement; they’re an effective way to activate and tighten a community.
This move from online to offline provides new levels of emotion, intimacy and inclusion in a group of people. Unlike anything we’ve seen before since the rise of the internet, Web3 is able to strengthen a community feeling and foster a sense of belonging—in a time when most people spend much of their time in front of screens, we tend to forget how much these connections fuel us.
Market Woes Or Not, Fashion And Luxury Are Going All In
Despite the current bear market, fashion and luxury are putting pedal to the metal to innovate with the speed of digital. While Prada is expanding its Web3 offering and Louis Vuitton is also tapping into NFTs, Balmain has teamed up with MINTNFT to create its NFT campaign—the list goes on.
Never afraid to innovate, the fashion and luxury industry is putting long-term Web3 strategies into practice. The goal? To go beyond the hype and embrace the future, and so should you. Don’t stall or slow down your efforts to innovate simply because NFT prices fluctuate. Instead, start learning from successful use cases, looking for inspiring and disruptive partners, and bringing your long-term Web3 strategies to life—your community of fans is counting on you.
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Author: Maddie Raedts, CommunityVoice
