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Unlocking utility is key for fashion brands launching NFTs in 2022

2021 may have been the year for fashion NFTs, but 2022 will require brands to launch NFTs with utility behind them to move the idea forward.
Nonfungible tokens, or NFTs, have become one of the most discussed markets in the crypto space



2021 may have been the year for fashion NFTs, but 2022 will require brands to launch NFTs with utility behind them to move the idea forward.

Nonfungible tokens, or NFTs, have become one of the most discussed markets in the crypto space this year. A recent report from Cointelegraph Research found that NFT sales are aiming for a $17.7 billion record by the end of 2021. 

This may very well be the case, as a number of mainstream brands have begun launching NFTs. According to recent research from Bain & Company and the online luxury fashion platform Farfetch, digital interactions with consumers are becoming increasingly important for brands. The report specifically states that “digital interaction with peers is on the rise when choosing to purchase a product.” As such, nonfungible tokens tied directly to brands and their consumers are now more important than ever before.

Understanding what utility means for fashion NFTs

While it’s notable that mainstream labels like Adidas, Dolce & Gabbana and others have already released NFTs, the utility behind nonfungible tokens is proving to be the real key to a fashion brand’s success. Karinna Grant, co-chief executive officer of The Dematerialised, a digital fashion marketplace, told Cointelegraph that utilities are what give nonfungible tokens purpose and value:

“Just as in real-life, where a physical card can scan you access into a club, a utility can be anything from using the NFT as a membership pass to the ability to wear an asset in a game, or incorporating a sustainability or social responsibility benefit for purchasers of the NFT.”

Grant noted that The Dematerialised has experimented with multiple forms of utility with each of the fashion NFT drips the platform has launched. She explained that previous releases have included utilities like wearing or playing with a 3D asset in augmented reality, or unlocking access to brand communities. “With Rebecca Minkoff’s sold-out NFT collection in September, the highest tier of NFTs unlocked VIP access to brand experiences for a year." She added: "Karl Lagerfeld’s "x Endless" collection provided an opportunity for owners of Karl collectibles, an IRL and URL ticket to a brand event in Paris in 2022, which will feature another launch where only Karl holders will be invited to take part.”

It’s become clear that fashion NFTs must offer some type of consumer engagement, allowing brands to interact with individuals in both the physical and the digital worlds. Avery Akkineni, president of VaynerNFT — an NFT consultancy agency — told Cointelegraph that while the utility of some NFTs can simply be for the sake of art, brands launching NFTs require deeper functionality built upon an existing community.

For example, Akkineni shared that VaynerNFT recently helped the global fashion house, Coach, launch its first NFT collection, which featured eight Coach Holiday animals from the brands' Snow City digital game. Akkineni added that the NFT launch was also in celebration of Coach’s 80th birthday, which resulted in the creation of 80 unique digital art pieces featuring the eight Coach holiday animals.

"Bella the Penguin" from the Coach NFT collection. Source: VaynerNFT

Akkineni explained that each digital Coach NFT also grants the right for the initial holders to receive one complimentary made-to-order physical rogue bag in 2022. “Something that Coach wanted to do was to explore this new world of NFTs, but wanted to in a way that wouldn’t commercialize their IP or ask consumers to pay for anything,” she said. To efficiently engage with the Coach community, Akkineni mentioned that the Coach NFTs were given away for free during Dec. 17–24 this year:

“The Coach NFTs were claimable on the Polygon blockchain. Coach made sure not to commercialize too early and to learn about the space to gauge demand to see if their audience was interested in NFTs.”

Fashion NFTs must also function in the Metaverse

The fact that brands must now interact with consumers both virtually and in real-life has also added an extra layer of technical utility to NFTs. As Bain & Company’s latest luxury goods report states, “new keywords and phrases — such as metaverse, personalization at scale, and tech stack — will come to the fore as the industry grows and evolves.”

As such, some companies have started to explore NFTs in the Metaverse. For example, Pet Krewe — a pet apparel e-commerce company — recently opened a digital commercial space in the Metaverse community known as “ShibaVerse.” Allison Albert, founder and chief executive officer of Pet Krewe, told Cointelegraph that the company is promoting its brand by featuring its NFT pet clothing in a Metaverse containing balloon dogs called “Shibaloons.”

Source: Pet Krewe

According to Albert, Pet Krewe's NFTs will be worn as unique designs that fit the Shibaloons. While Albert pointed out that these costumes can be held and swapped out on different Shibaloon dogs within ShibaVerse, Pet Krewe is using this digital commercial space as another form of brand engagement or marketing. “We can connect with dog-loving customers in a dog-centric Metaverse. This is reaching our customer base in an entirely different marketing element.”

The 18-year-old fashion label Mishka has also entered the NFT space with its famous eyeball logo. The collection of 6,696 NFTs is known as "The Keep Watch Crew,” or “KWC” for short. Greg Mishka, founder of Mishka NFT and the Keep Watch Crew, told Cointelegraph that Keep Watch is the most iconic and well-known branding element of Mishka, for both fans and the streetwear and fashion community.

Andy Milonakis KWC NFT. Source: Mishka

Given the label’s strong user base, Mishka explained that the KWC NFTs are the next chapter for the brand. “The KWC is your ticket into what we like to call the MISHKAVERSE. Immediate utilities include lifetime discounts and exclusive merchandise,” he explained. Mishka added that the label is working on integrating Web3 elements to their website. “This would allow for consumers to verify the NFTs they own in order to access exclusive pages and drops via the website.”

Should fashion NFTs still be tied to physical items?

While the utility of fashion NFTs extends beyond simply offering digital items connected to physical goods, some in the industry believe that this is still one of the most important functions. For instance, Grant noted that connecting physical items to digital NFTs is a critical part of the adoption process for nonfungible tokens of all categories. She elaborated:

“We have a very interesting split perspective with our current community, with half asking for more physicals and half asking more digital-only. However, when we survey outside of our current community the figure is much higher. This makes sense as first-time or new NFT owners tend to still hold more traditional beliefs that physical products are more "valuable" than digital ones.”

Echoing Grant, Mishka commented that it’s important to have physical items that can be claimed or achieved by acquiring something in the Metaverse since most consumers still live in the “real world.”

This is why it shouldn’t come as a surprise that a mainstream fashion label like Coach gifted NFT holders with physical made-to-order rogue bags. Interestingly enough though, Akkineni mentioned that sometimes NFT holders don’t redeem their physical items, which has proven to be the case for other drops associated with consumer-facing brands. “VaynerNFT did a collaboration called "Anwar Carrots x Veefriends," which was a collection sold at Nordstrom and made available to all "Self-Aware Hare" NFT holders. It was only after some reminders that the holders did claim the physical items,” she commented.

Fashion NFTs will be a trend

The rise of NFTs in 2021 has demonstrated growth moving forward for major brands. While companies like Nike have already taken steps to enter the Metaverse, more labels will follow suit. This has become the case as the world moves toward digital business models, which have also been promoted by the rise of COVID-19. For instance, Albert explained that Pet Krewe is still unsure of how COVID-19 is going to play out in 2022, noting that current supply chains are still being disrupted:

“We need to hedge our bets on alternative revenue streams. Entering into a metaverse that aligns with our own company values means that we can add additional revenue streams through art NFTs and digital wearables.”

Grant further remarked that The Dematerialised is excited for “behavior-changing launches,” which include using NFTs to disrupt physical production methods. However, it’s important to point out that brands will face challenges along the way.

According to Grant, fashion labels will encounter three main obstacles, with the first being a shift in thinking when it comes to the value of Web3 and digital ownership. Secondly, Grant explained that understanding the purpose and narrative of an NFT launch is important: “We support launches that are part of long term strategic commitments to Web3, not a marketing gimmick to briefly drive revenue."

Finally, Grant pointed out that it will be challenging for major brands to ensure a 3D asset design pipeline in house. Yet Grant remains optimistic that these challenges will be resolved: “Mainstream adoption will come as more major fashion brands, influencers and creators get involved.”

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Essential retailer files for bankruptcy, stores will close

A retail store chain relied on by millions of shoppers will close stores after filing for Chapter 11 bankruptcy.



Retail store chains that file for Chapter 11 bankruptcy can suffer from damaged vendor relationships that cause empty shelves, limited access to capital needed to pay landlords and wages, and a damaged reputation that keeps shoppers away. It can also cause store closures, leaving customers in the lurch.

For these reasons, filing for bankruptcy reorganization is a retailer’s last option. Nevertheless, bankruptcy has become increasingly common because of fierce competition from e-commerce stores like Amazon  (AMZN) - Get Free Report and big-box retailers like Walmart  (WMT) - Get Free Report and Costco Wholesale  (COST) - Get Free Report.

Shoppers can usually find the items they buy at those stores when retailers close because of bankruptcy. However, that task is more challenging when the retailer filing for Chapter 11 bankruptcy sells essential items not readily available elsewhere.

Store closing sale announcement at a Bed Bath & Beyond indoor mall in northern Idaho. (Photo by: Don & Melinda Crawford/UCG/Universal Images Group via Getty Images)

UCG/Getty Images

Brick-and-mortar retailers face stiff competition.

Sears had 700 stores when it filed for bankruptcy in 2018. Nowadays, it operates fewer than 20 stores after reemerging from Chapter 11 bankruptcy in 2022.

Bed Bath & Beyond had over 1,500 stores in 2018, but less than 300 when it went bankrupt earlier this year.

Related: Bankruptcy could force this popular retailer to close 500 stores

The success of large brick-and-mortar stores like Walmart and Costco and e-commerce alternatives like Amazon are a big reason behind those failures.

Walmart’s annual revenue surged from over $450 billion to $611 billion over the past decade. Costco’s revenue has more than doubled to $242 billion, and Amazon’s sales have increased from $74 billion to over $500 billion.

Those sales have come at the expense of other retailers less able to compete on price and convenience due to impaired balance sheets, buying power, or both.

A mountain of debt takes its toll

Rite Aid  (RAD) - Get Free Report is the latest retailer to declare bankruptcy. It has similarly lost sales because of increasing competition from these larger competitors. 

Walmart is the fifth largest company, and Costco Wholesale is the 11th largest company ranked by prescription market share. Meanwhile, Amazon is pushing more deeply into pharmacy by offering online prescriptions.

Competition isn't the only reason why Rite Aid sought bankruptcy protection from creditors on Oct 15.

Rite Aid also filed for bankruptcy to insulate itself against a lawsuit that could cost it over one billion dollars to settle.

More bankruptcy:

The Department of Justice filed a civil suit against Rite Aid in March, alleging pharmacists “repeatedly filled prescriptions for controlled substances with obvious red flags" and that it "intentionally deleted internal notes about suspicious prescribers.”

The company was already struggling before the Department of Justice alleged it inappropriately filled opioid prescriptions, contributing to the opioid epidemic.

Revenue at the 2,300-store retail pharmacy chain slumped 6% from one year ago during the June quarter, despite millions of shoppers relying on it to fill prescriptions or buy everyday items, like aspirin, vitamins, and toothpaste, every week.

Slumping sales couldn't have happened at a worse time for the company. Its interest expense on over $3.3 billion in debt has soared 35% to $65 million per quarter because of rising interest rates. 

That extra burden, plus higher costs, increased theft, and goodwill write-downs on past acquisitions led to staggering losses exceeding $300 million in the quarter and full-year guidance for losses eclipsing $4.78 per share.

Those losses left Rite Aid with little wiggle room to negotiate a settlement with the Justice Department, given Walgreens Boots  (WBA) - Get Free Report and CVS Health  (CVS) - Get Free Report settled similar suits for $5.7 billion and $4.9 billion in the past year.

Rite Aid's decision to file for bankruptcy protection is based on restructuring plan negotiated with creditors that includes store closures.

“In connection with the court-supervised process, the Company will continue assessing its footprint and close additional underperforming stores. These efforts will further reduce the Company’s rent expense and are expected to strengthen its overall financial performance,” said Rite Aid in a statement announcing the bankruptcy news.

Rite Aid hasn't said which stores will close yet, but the Wall Street Journal previously reported the company could shutter up to 500 locations. 

Stores that don't close will remain in operation via a $3.45 billion debtor-in-possession financing agreement with lenders.

“Rite Aid has received a commitment for $3.45 billion in new financing from certain of its lenders. This financing is expected to provide sufficient liquidity to support the Company throughout this process,” according to the statement.

The bankruptcy filing follows the receipt of a non-compliance letter from the New York Stock Exchange on Oct. 4 due to its shares trading below $1 and its market cap being below $50 million. The company was given a short window of time to get shares back above those thresholds before being delisted, further pressuring management into its decision.

Sign up to find out what stocks we're buying now (Rite Aid isn't one of them!)

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Controversy Erupts Over Calls For US To Accept Gaza Refugees Amid Israel–Hamas War

Controversy Erupts Over Calls For US To Accept Gaza Refugees Amid Israel–Hamas War

Authored by Tom Ozimek via The Epoch Times (emphasis…



Controversy Erupts Over Calls For US To Accept Gaza Refugees Amid Israel–Hamas War

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

U.S. lawmakers appear split over calls for the United States to accept refugees from Gaza displaced by the Israel–Hamas war, as experts are predicting that a million individuals might flee the region.

Palestinian citizens evacuate their homes damaged by Israeli airstrikes in Gaza City, Gaza, on Oct. 10, 2023. (Ahmad Hasaballah/Getty Images)

Rep. Jamaal Bowman (D-N.Y.), a member of the left-wing "Squad" in Congress, was cited by the New York Post as calling for the United States to "welcome refugees from Palestine," while Rep. Tom Tiffany (R-Wis.) has introduced legislation that would block people with Palestinian passports from being admitted into the country.

"We can't let President Biden abuse our parole and visa rules to bring unvetted Palestinians into American communities the way he did with thousands of unvetted Afghans," Mr. Tiffany said in a statement posted on X, referring to the Biden administration's decision to let 76,000 unvetted Afghan refugees come to the United States following the U.S. withdrawal and Taliban takeover of the country.

"I introduced the GAZA Act to protect America’s national security."

He also shared the contents of the Guaranteeing Aggressors Zero Admission (GAZA) Act exclusively with Breitbart.

The proposal would block the Biden administration's use of the Department of Homeland Security's (DHS) parole mechanism from letting Palestinians settle in the United States, according to the text of the measure, as cited by Breitbart.

Palestinians evacuate a neighborhood in Gaza City on Oct. 11, 2023. (Mohammed Abed/AFP via Getty Images)

While Mr. Bowman has called for the admission of Gaza refugees to the United States, he said they should be vetted prior to being allowed in.

"Fifty percent of the population in Gaza are children," he said. "The international community as well as the United States should be prepared to welcome refugees from Palestine while being very careful to vet and not allow members of Hamas."

Like Mr. Tiffany, other Republicans have expressed opposition to opening the door to Gaza refugees.

The U.S. is the most generous nation in the world, but we are in no position to accept additional refugees, especially from a region with as high a risk of terrorism, given our nation’s inability to secure our own border or vet those who are already here,” Sen. Marco Rubio (R-Fla.) told the NY Post.

Likewise, Florida Gov. Ron DeSantis, a Republican, said on Oct. 14 that the United States "cannot accept people from Gaza into this country as refugees," saying that neighboring Arab nations should "open their borders" and take them in.

Israel has called for a mass evacuation of Gaza ahead of a planned offensive to destroy Hamas and rescue hostages—if they're still alive.

A Hamas terrorist enters the Be’eri kibbutz in Israel on Oct. 7, 2023. (Israel Defense Forces/Screenshot via NTD)

'Wide Range of Offensive Operating Plans'

The Israeli military said on Oct. 14 that it had seen a "significant movement" of Palestinian civilians to the south, a day after ordering Gaza City residents to flee and later said that it was “preparing to implement a wide range of offensive operative plans” that would include coordinated strikes from the air, land, and sea.

That came after Israeli Prime Minister Benjamin Netanyahu promised further actions in response to Hamas's Oct. 7 massacre of Israelis, in which terrorists killed at least 1,300 Israelis, mainly civilians, and seized hostages.

The Hamas terror group, which is known for its reckless disregard for civilian lives and using human shields, has told people to ignore Israeli calls to evacuate from northern Gaza, according to the Associated Press.

Israeli rescue workers work to remove dead bodies from near a destroyed police station that was the site of a battle following a mass infiltration by Hamas terrorists from the Gaza Strip, in Sderot, Israel, on Oct. 11, 2023. (Violeta Santos Moura/Reuters)

The United Nations has estimated that roughly 423,000 people have been displaced in Gaza, while U.N. spokesperson Stephane Dujarric said it would be impossible to stage such a large evacuation without "devastating humanitarian consequences."

Mariana Dahan, founder of the World Identity Network (WIN) Foundation, told the NY Post that the Israel–Hamas conflict "may add over 1 million people to the already staggering number of 6 million Palestinian refugees in the world."

The Israeli military stated that Hamas has set up roadblocks and is "forcefully preventing their civilians from relocating to southern Gaza for their own safety."

With the rhetoric heating up around the fate of the people evacuating Gaza, the issue of Palestinian refugees has become a hot topic in Washington.

Discussions on Capitol Hill

President Joe Biden said consultations were underway with regional governments on the humanitarian crisis in Gaza as Palestinians endured a power blackout and shortages of food and water.

Progressive Democrats in the House on Oct. 13 called on the Biden administration to take steps to limit civilian casualties in the Gaza Strip.

In a letter addressed to President Biden and Secretary of State Antony Blinken, signed by 55 House members, the lawmakers expressed their concerns about the "unfolding humanitarian crisis in Gaza" as Israel responds to the terrorist attack by Hamas.

As President Biden has previously stated, Israel has the right to defend its people and respond to these vicious attacks,” they wrote.

“We strongly believe that Israel’s response must take into account the millions of innocent civilians in Gaza who themselves are victims of Hamas and are suffering the consequences of their terror campaign.”

The Israeli military, for its part, has said it'll "make extensive efforts to avoid harming civilians" while it carries out operations in Gaza in the coming days.

Caden Pearson contributed to this report.

Tyler Durden Mon, 10/16/2023 - 19:15

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US Taps 2,000 Troops for Potential Deployment To Support Israel

US Taps 2,000 Troops for Potential Deployment To Support Israel

The Pentagon says it has selected 2,000 troops it is readying for potential…



US Taps 2,000 Troops for Potential Deployment To Support Israel

The Pentagon says it has selected 2,000 troops it is readying for potential deployment in support of Israel as it battles Hamas in Gaza and potentially Hezbollah across its northern border.

Based on US officials speaking to The Wall Street Journal, American troops are not expected to serve in any combat roles, but only in advisory capacities or missions like medical support. 

File image, US Army

"The troops are currently stationed both inside the Middle East and outside, including Europe, the officials said," WSJ writes. "It isn't clear under what circumstances the U.S. could deploy the troops or to where, but the Pentagon decision signaled it is preparing to support Israeli troops should Israel launch a ground incursion into Gaza."

Already US Marines have been moved from Kuwait in preparation for potential greater support roles related to Israel. The Biden administration has dispatched two carrier strike groups to the general region, likely expected to enter the eastern Mediterranean at some point soon.

Separately, a defense official told the AP that the troops would "not be sent to Israel but could be sent to countries in the region."

The situation remains highly fluid and unpredictable, as there have been reports that Israel's ground invasion is "imminent" for the past three days. There are signs Israeli leaders could be delaying not only out of concern for the some 200 hostages Hamas has, but due to the threat of Hezbollah opening all-out war in the north. Iran's threats have also been increasing. 

The US is also assisting Israel with intelligence, particularly related to the captives, among them Americans. However, so far the Pentagon has ruled out the idea of sending US commandos as part of rescue efforts. 

Of course, given the population density of Gaza, and given the difficult urban warfare environment, any military rescue mission might be a 'mission impossible' kind of scenario - even if intelligence could pinpoint their exact locations, which is unlikely.

If Israel does go into the strip with full force, but without knowing the exact locations of the hostages, it could be highly dangerous for the captives.

Tyler Durden Mon, 10/16/2023 - 18:55

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