Application of NFTs in Luxury Brands

Abstract

This essay aims to investigate the primary beneficiaries within the fashion industry concerning NFTs, elucidate how luxury goods can derive benefits from NFTs, and discern potential future applications of luxury brand- related NFTs. Employing methods such as textual analysis and case studies, this research selects prominent luxury cases, exemplified by the likes of Burberry, Balmain, Givenchy, Louis Vuitton, to analyze luxury brands' current utilization of NFTs. Moreover, the study identifies drawbacks and outlines the future research direction. Additionally, through semi-structured interviews, the paper engages with three relevant industry practitioners to acquire supplementary data. From the investigation above, one of the utmost features of NFTs is that it can guarantee the property rights of virtual assets, thus ensuring the viability of virtual product transactions. A reverse analysis concludes that products with value and scarcity are transformed into NFTs to maximise their advantages. The rise of the NFT art market is a substantial evidence of this argument. As a result, luxury brand are best suited to launching NFTs and are more likely to attract buyers to consume and collect them than other categories in the fashion industry.