The next big thing for brands getting into Web3 could be giving away NFTs at physical locations.
Over the past year, nonfungible tokens (NFTs) have taken the world by storm. In 2017, digital collectibles were only known as CryptoKitties. Since then, they have become famous works of art, digitized music, high-end fashion for the Metaverse, and a way for communities around the world to connect with each other.
Even though the crypto market is in a bear market right now, new research from Security.org shows that the number of people who own NFTs has doubled in the last year, from an estimated 4.6 million to 9.3 million. The report also found that most Americans are not ready to buy NFTs, but about 16.3 million potential customers are likely to buy nonfungible tokens in the next 12 months.
When people buy IRL mints, they have NFTs.
Since NFTs have a lot of potential, it shouldn’t come as a surprise that some retailers and brands are starting to use them in their products. Brands that connect physical goods to digital NFTs have shown that this is true. Now, a small number of retailers are putting NFT technology in their physical stores.
Recently, the high-end Italian brand Salvatore Ferragamo showed this to be true. The new Ferragamo concept store opened in New York’s Soho neighborhood on June 24, 2022, the day after NFT NYC ended. From the outside, the Ferragamo store at 63 Greene Street looks like any other store, but once customers step inside, they can use immersive shopping features to experience Web3 for themselves.
During a sneak peek of the store, Daniella Vitale, CEO of Ferragamo North America, told Cointelegraph that the Soho location is combining technology and luxury by having an NFT installation and a custom hologram sneaker program. She said:
“Everyone is always talking about NFTs, so we wanted to give people a real way to make their own NFTs in the Soho store. We want to find new customers who are familiar with Web3, but we also want our current customers to join this world. I think this is going to be a big hit.”
Vitale also said that Ferragamo’s NFT installation, which was made in collaboration with digital artist Shxpir (pronounced like the English poet and playwright Shakespeare), is the first of its kind. He said that no other Ferragamo store has a similar feature.
“We didn’t want our store in Soho to be so static; we wanted it to have something to do with technology. “The NFT booth was built right into the store, so the whole shopping experience was covered,” she said. Vitale also said that she hopes that these interactive features will help customers learn about Web3 technology instead of being scared off by its rapid growth.
A representative from the multidisciplinary studio De-Yan, which worked with Ferragamo on the installations and has worked on immersive projects for Louis Vuitton and Dior, told Cointelegraph that customers don’t have to pay anything to mint a Ferragamo NFT.
“This will be a lot of people’s first NFT, so Ferragamo will cover all the Ether gas fees on transfers.” He also said that people will be available to help customers throughout the whole process of minting. He also said that the NFT installation will continue, but that the store will only let people buy 256 NFTs at the start. “The NFTs can be made in 972 different ways, but right now you can only make 256 of them,” he said.
He said that the actual minting process is a completely immersive experience, and that the NFT installation is in a room with mirrors so that customers can see the NFT they are making from every angle.
“Customers can personalize their NFT and then use it to make a video that they can share on social media,” he said. After the mint, customers get an email asking for their wallet’s address. “The NFT is then sent to their Ethereum address, and a day or so later, it will show up in their OpenSea account,” he said.
Even though Ferragamo may be one of the first high-end fashion brands to offer NFT minting in-store, the Web3 media and entertainment brand Doodles did the same thing for its community. During NFT NYC 2022, Doodles set up an offsite house where fans and members of the community could buy the newest NFT drop, look at Doodles’ art, and buy exclusive items like sweatshirts and t-shirts. Julian Holguin, chief operating officer at Doodles, told Cointelegraph that the goal of the Doodles house was to raise the brand by letting people experience everything in real life. He said:
“We just announced the pre-sale for our second NFT drop, which is what is going on here. People are here to make a “Genesis Box,” which is a box of wearables that will be the next level of rare. People can buy a wearable for a set price today to save a spot at this mint.”
Since it started in October 2021, the Doodles NFT project has made about $500 million in secondary sales. Holguin said that the minting experience should be “fun and joyful” because that’s what the brand stands for and there are more than 6,000 people who own Doodles. “I think that people feel something when they can touch and feel something. Then they can feel those feelings online,” he explained.
At the Doodles House at NFT NYC, there was a machine where people could mint their Genesis Box NFT reservation, just like at the Ferragamo NFT installation. When it was done, the machine spit out a golden card that looked like a credit card, which guests could keep as a souvenir. The gas fees, which cost about $127 and could be paid for with a credit card, had to be paid for by the users.
How important it is to make NFTs real
For example, John Crain, co-founder and CEO of SuperRare, a digital art marketplace that opened in 2018, told Cointelegraph that having a physical art gallery connected to NFTs is a great way for crypto-natives and crypto-curious people to try out NFTs. With this in mind, SuperRare opened its first real art gallery in New York’s Soho neighborhood in May of this year. Crain said:
“I think people read about celebrities buying Bored Apes in the news, which is exciting. At the same time, though, there is a cultural renaissance going on where this technology is giving independent artists more power. It’s hard to see this, which is why it’s important to have a physical gallery where people can see the art and meet the artists and curators.
Crain said that the SuperRare gallery in Soho will be open until the end of August, and there is a chance that it will stay open longer or move to other cities. “We have different exhibitions every two weeks. This is a great way to bring people together and give the art on display a deeper meaning.” He said, “This is hard to get from a digital experience alone.”
The person who works for De-Yan also said that he thinks a mix of technology and customization will be important for retail in the future. He said:
“Ferragamo has chosen a method that we think is a good place to start. I wouldn’t be surprised if other brands started to do what we did. Right now, everyone thinks of NFTs as pictures or videos, but there is a whole physical and application layer to it.
Even though bringing digital NFTs to life in physical spaces could be a big deal, it’s important to point out some problems that could make it hard for people to use them. For example, in-store mints may be fun and interactive, but people who are new to crypto, especially older people, may still find them hard to use.
Security.org’s research showed that people between the ages of 25 and 34 were more likely to buy NFTs in the next 12 months than people in older or younger age groups. The study also found that men are a little more interested in buying NFTs in the next year than women are.
Given this, it might be hard for fashion brands like Ferragamo to get customers to buy NFTs. So that this doesn’t happen, De-representative Yan’s said, Ferragamo is giving people instructions on how to start using NFTs. “I think MetaMask is the easiest way. Ferragamo also starts the transfer, so all a customer needs is an address for their wallet,” he said.
Security.org also found that the high costs of minting continue to be the biggest problem with NFTs. The fact that Ferragamo is paying for gas fees is a good thing. Vitale said that because of this, the current bear market for cryptocurrencies is unlikely to stop people from making Ferragamo NFTs. “Paying for gas is a nice thing to do, especially in this situation,” she said.