Why it's game on for Gucci's 'phygital' NFT

It is almost thirty years to the day since I got mine. No, not a non-fungible token but more about that in a moment. I am talking about an authentic and beautiful Avirex1 leather jacket. Infused with both star quality and history, from Tom Cruise’s wearing of one as Maverick in Top Gun, back to its roots as the flying jacket of choice for the US Air Force during WW2. And how I came to have this wonderful jacket now looks equally exceptional. My mission back then was to make it digital. Avirex jackets would feature as collectible skins for your pilot to wear within the hit computer game F19 Stealth Fighter. An early custom avatar, if you like. Of course, you would need to master the game to earn that right. To my knowledge, it was the first time that a fashion brand (and a luxury one at that) would use a digital channel to advertise. And gamers absolutely loved it!

Fast forward a generation or two and both fashion and retail have taken one heck of a journey to understand their digital selves in the intervening period. Whilst many retailers remain laggards, that position is becoming increasingly untenable. 2020 is probably the last lesson that retail will ever need to understand the urgency of transformative digital technologies.

As we finally emerge from our bunkers and start to grapple with what all this means, not just for retail’s future but very much its present too, some key battlegrounds are emerging. How can we reimagine our customers’ experience? How can we improve our operational efficiencies, from stock control to the impact we have on our planet.

For me, it is in this wider context that we should choose to see the value of the non-fungible token, or NFT for short. Without diving into how they work (Google can help here), an NFT’s core offer is uniqueness. A one of a kind digital file that can never be copied, and an immutability that can last forever by residing on a blockchain ledger (usually Ethereum). Whilst digital assets can be easily reproduced, NFTs offer the tantalising prospect that there will only ever be one original. And it is this power of verifiable originality at scale that is a key new weapon in our digital arsenal.

The art world was quick to see an opportunity. Earlier this year, Christie’s auction of Beeple’s Everydays NFT achieved a staggering $69 million. But this masks the many “everyday” creators that are already making an impressive living from NFTs. With such rapid growth, many commentators point to oversupply and a bubble shortly to burst. Such comments are short-sighted in my opinion and misunderstand the journey we will undertake with NFTs.

For fashion retail, in particular, NFTs might well drive us further towards a gaming culture from which they take inspiration, and remains the high watermark for digital experience. Digital skins, a key part of every game, now have a viable handshake with their real-world twins. The gamified technique of scarcity, entrenched in the fashion industry and often exploited through collectibles and limited editions, can now cross their phygital divide. Or perhaps it is going to be about how your avatar looks. The importance of this to Gen-Zs across both games and social channels is already clear. Improvements in crossover technologies will allow us seamlessly to move from one digital environment to another, carrying with us our digital fashion. Over time, we will learn to craft these into magical experiences, with start-ups like Dress-X already capitalising on the current trend of “buy, Insta, return”.

NFTs further empower us to tackle challenges such as provenance and counterfeiting, or power secondary markets and the wider vision of a circular economy. It can help us move the dial on sustainability challenges that must surely concern us all. Here, planned Ethereum updates and movement to Proof of Stake cannot come quickly enough to address current energy consumption concerns. NFT (and blockchain more widely) is ultimately one of several emerging tech superpowers that afford us a glimpse of a new experiential, high-speed, and boundary-less retailing.

Vogue recently reported that several luxury brands such as Gucci are preparing to launch their own NFTs. Despite luxury’s late arrival to the digital party, they are now very much on board and this latest innovation is impressive. However, the majority of fashion retail uses have, until now, been merely to dip a toe in the marketing pond. The real driver here must not become FOMO but rather the challenge for us to focus on a brand’s longer-term digital vision. If we ignore the wider potential of NFTs and our responsibility to innovate, they may end up following the same path as other nascent technologies (VR anyone?).

NFT delivers the promise of scarcity, uniqueness, traceability and crosses the physical/digital divide. NFT’s are fundamentally value-creating, and it is not a silver bullet, it is a powerful weapon. So, perhaps the next time you wear your Avirex jacket when flying your fighter jet simulation, it might be the one actually worn by Tom Cruise.