When it comes to breaking into an entrenched industry like fashion, it helps to have a competitive advantage. For digital fashion startup the Fabricant, that advantage lies in its founders' willingness to embrace NFTs before most people had ever heard of Beeple.
In 2019, the Fabricant sold the first-ever NFT couture dress, which means it sold a digital version of a couture dress for a then-astonishing $9,500. NFTs (non-fungible tokens) can serve as a digital stamp or watermark, conveying ownership, for any kind of digital file in the form of a photo, video, or audio item.
As the market for NFTs has grown, with one by digital artist Beeple fetching $69 million in March and another by Twitter's Jack Dorsey ringing in at $2.9 million the same month, it was only a matter of time before major fashion houses joined the craze.In May 2021, Burberry partnered with startup video game developer Mythical Games to create the luxury brand's first NFT, which is slated to launch in July, as a part of the tech developers first "play-to-earn" video game, where players can trade and sell digital belongings for real money. Separately, Gucci auctioned off its first NFT earlier this month at a starting bid of $20,000.
Still, the Fabricant has a first-mover advantage. "The whole NFT space is going to complement every single part of our lives," says Kerry Murphy, who co-founded the Fabricant, alongside Michaela Larosse and Amber Slooten in 2018. "You can literally make a digital translation of anything, digital chairs, digital perfume, digital quotes, digital real estate, these are all going to be big things."
Earlier this year, the Amsterdam-based company collaborated with RTFKT, a sneaker designer and meme creator, to produce a digital collection. The seven-piece collaboration sold a record-setting $3.1 million in sneaker NFTs before ceasing the sale after just seven minutes.
What the Fabricant and RTFKT are doing that's really interesting is giving people an opportunity to turn fashion-statement pieces into investment vehicles--and that's going to become more prominent, says Benoit Pagotto, co-founder of RTFKT. "It is completely shifting the fashion industry to digital governance and digital identity," says Pagotto. "We are allowing ourselves to do things that we could never do in traditional brands or traditional business."
It's also very much of this moment. While he declined to provide exact numbers, Murphy noted that his company's sales grew by 400 percent in the past year. NFTs, which tend to operate off the Ethereum blockchain network, grew in popularity over the course of the pandemic, in part, Murphy says, because consumers were stuck at home and turned to investing opportunities to pass the time. But he's convinced that even once people start leaving the house again, the benefits of this technology will remain.
NFT's are becoming more widely embraced for two reasons, says retail industry consultant Alexis Kahler. "First, they represent a way to fully engage an audience digitally." Because consumers have increasingly embraced digital shopping options, Kahler says, it is crucial for brands to find ways to make the online experience unique. "This is especially true among digitally savvy generations," she says. The second reason, revolves around the zero to no waste element of digital clothes, says Kahler. "With the decline of fast fashion, consumers have become more interested in shopping consciously."
As more brands join the NFT fray, however, the Fabricant may lose market share. Trades of NFTs reached $2 billion in the first quarter of 2021, representing a 13,118 percent uptick from the same period a year ago, according to data from NonFungible.com, a site that tracks NFT transactions. Murphy, for now, is content with his company's status. "A lot of brands and people have come to us because they see us as innovators in the space who are capable of recognizing something that's going to be massive in the future," says Murphy.
And as for that $9,500 digital couture dress, its owner is now reportedly weighing a resale of the one-of-a-kind item--this time for much more than what he spent. Murphy thinks he'll get it. That iridescent gown will be the next Mona Lisa in 500 years, he says. "The first of its kind that really started the ball rolling for the digital fashion industry."