Writing for luxury website Jing Daily, Web3 journalist Bethanie Ryder recently declared that “2022 was the year phygital took over the fashion landscape… thanks to drops from Prada, Givenchy, and Tommy Hilfiger,” among many others.

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Phygital, a portmanteau of physical and digital, refers to the combining or connecting of physical products with digital counterparts. In the case of luxury fashion, this is most clearly seen in the linking of an article of clothing or accessories - such as a pair of sneakers or a luxury watch - with an NFT. 

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Charles Hambro, CEO of Web3 data platform GEEIQ, is quoted by Ryder as explaining that, “a phygital dimension to a luxury offering creates a bridge between online and offline environments, that makes it more accessible for new buyers while simultaneously future-proofing the brand.”

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What are digital twins used for?

Also known as a ‘digital twin,’ the paired NFT may contain a 3D virtual model of the item in question, or otherwise serve a variety of purposes. Most fundamentally, it is a digital record on which can be stored information relating to the product, which in turn might bestow upon the customer additional perks and benefits.

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We’ve previously discussed how NFTs open up a whole new world of digital fashion to explore, and how they can help improve brands’ sustainability efforts and supply-chain efficiency. But there’s another use case luxury brands are beginning to see the potential in. NFTs may be a powerful weapon in the fight against fakes.

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The problem of counterfeiting 

“For years, the luxury industry has waged a battle against counterfeiters.” So opens an article in the Harvard Business Review on the subject. Among the methods the industry has used, the article lists: “ultra-sophisticated tech solutions which use the latest advances in nanotechnology, internet of things (IoT), and AI to authenticate products…. Lobb[ying of] governments to extend enforcement bodies’ power to seize and destroy fake goods, to prosecute buyers and dealers, and to block access to websites that sell counterfeit goods… and lawyers - LVMH alone employs at least 60 lawyers and spends $17 million annually on anti-counterfeiting legal action.”

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And the results of all this effort? Not so good, according to the Review. The global fake luxury merchandise industry was estimated to be worth almost $2 trillion in 2015. Digital platforms are estimated to account for up to 40% of these sales, as per the HBR article.

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Like all blockchain infrastructure, NFTs are inherently unfakeable. Unlike an article of clothing, an NFT issued by a luxury brand can be easily verified as genuine. The idea, then, is to take advantage of the easily verifiable authenticity of NFTs by connecting them to individual products.  

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NFTs to prove provenance

Efforts are already being made in this direction by both major luxury brands and smaller, fashion-tech startups. Brands including Nike, Dolce & Gabbana and Gucci are already well-known for having made millions of dollars off of NFT-linked products. Here are a few other examples of labels that are deploying the technology:

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Ambush

Japanese streetwear brand Ambush has been a frontrunner in merging the physical and the digital. They proudly claim on their website to have “assumed a pioneering role to mobilize fashion into the future.”

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In one of their most recent collaborations, the label teamed up with renowned web3 brand Azuki to launch a collection of hoodies and pendants. Each hoodie carries a tiny chip stitched into the sleeve. As per Ambush’s website, “scanning the chip with your phone allows for the [NFT] to be minted and digitally transferred to the owner’s wallet which verifiably authenticates the [hoodie] and ties [it] to a digital token on the wallet of their choosing. 

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In other words, once activated by the wearer, the chip registers an unfakeable certificate of authenticity, which the owner can use to prove the provenance of their garment.

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Dior

Dior is one of the latest luxury brands to dive into web3. Their new line of luxury sneakers, the B33, retail for just over a thousand USD, and - as with Ambush’s hoodies - contain an NFC chip inside the physical product that is linked to an NFT. 

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Not only do these NFTs serve as a certificate of authenticity for the shoes, of which only 470 are to be made, they also give access to a “personal, secure platform offering dedicated services,” like additional manufacturing information and announcements regarding future sneaker launches. 

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This approach, of combining an NFT’s function as a certificate of authenticity with its potential to power innovative digital marketing campaigns, is being exploited by several other brands, including…

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Puma

Puma’s latest ‘Mixtape’ sneaker collection, a collaboration with Jay-Z’s Roc Nation music label, uses the same chip technology as Dior and Ambush to connect to an NFT and verify the authenticity of the product. But Puma goes even further than Dior in leveraging NFT technology to provide wearers access to exclusive digital experiences. 

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Specifically, wearers of the Mixtape sneakers will gain access to weekly mixtape drops, showcasing unreleased tracks from emerging artists signed to Roc Nation. All the wearer needs to do is scan the tag under the tongue of the left shoe with a smartphone, and they will be instantly taken to the digital domain from where they can enjoy exclusive Puma benefits.

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Nicole Steel

At last month’s Paris Haute Couture Week, fashion-tech entrepreneur Nicole Steel revealed a luxury Apple Watch accessory known as SmrtKuffs. The collection includes a variety of options at a range of price points, including entry-level leather bands all the way to limited-edition, made-to-order diamond and white-gold palladium options. 

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Once again, the SmrtKuff features an integrated NFC chip, which allows wearers to access a NFT-backed digital ID, including information on the provenance of the materials involved in crafting the piece. A line of limited-edition bags was also launched, similarly chipped, and retailing for just under $10,000 each. The NFTs they come with contain a digital twin model of the bag, as well. 

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As per CryptoTimes, Steel looked to “speak the language of her target audience” with the integration of blockchain technology. “By focussing on Apple Watch owners, who are already familiar with technical features, she aims to make the transition to blockchain smoother and more accessible. 

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The future is phygital

It’s becoming clear that, in the words of Ryder, “bridging the gap between physical and digital [will be] key for mainstream adoption” of blockchain technology. The ongoing collaboration between luxury and tech is a major driver of this bridge.

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Ryder quotes Zagabond, founder of Azuki, as saying “For 2023, we expect more exploration of blurring the lines between physical and digital, as well as more efforts to [connect] mainstream and Web3 communities.” That process is very much underway. It’s up to brands to decide how much they are going to benefit from it. 

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How to use NFTs in Fashion

As with any industry involved in a web3 transition, the key to success is in ensuring that the blockchain elements are as accessible and easy to use for the general public as possible. Ideally, this means keeping blockchain hidden, presenting users with familiar web2-style interfaces, if they even need to interact with the technology at all. 

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Wallets like those offered by Venly prioritize smooth onboarding and seamless usage. In the case of Venly’s Wallet Widget, users don’t need to know the first thing about crypto - or even what a wallet is. With only a social or email login, users have their wallets automatically created for them, meaning there are no hoops to jump through or hurdles to surmount.

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Venly also offers a Shopify App which allows store holders to sell NFTs directly from their Shopify stores, with the same level of accessibility. Purchases are made with credit card and are sent to the recipients' email address. Everything blockchain happens automatically. 

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It’s this approach that the leading luxury brands are taking, and this approach that will usher in the web3 revolution. 

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About Venly

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