Ever since non-fungible tokens exploded into the popular lexicon late last year—and even before then, in many cases—virtual fashion‘s seemingly limitless possibilities have captured the imagination of apparel retailers and brands alike.
In the past few months, particularly since Facebook’s Meta rebranding, those cyberpunk dreams have morphed into very real business opportunities. After years of quietly filing patents around crypto-based digital shoes, Nike bought the virtual fashion startup RTFKT last month. That same week, Adidas sold out its first NFT collection for the then-equivalent of around $22 million. Days later, Under Armour dropped its own sold-out collection of NFTs, worth $1 million, the rarest of which have sold for tens of thousands of dollars.
The past week has brought yet another wave of new developments in the space, from NFTs designed for consumer utility, to a lawsuit from luxury brand Hermès against the creator of the so-called MetaBirkins NFT collection.
Bold Metrics
Inconsistent sizing across and within brands has long been a public nuisance. As consumers turn to e-commerce, frequent returns have amplified the problem. In a survey released by GXO Logistics Inc. in August, 42 percent of consumers said they had returned a piece of apparel online and 37 percent of merchants said returns had increased their operational costs.
Bold Metrics unveiled one potential answer to the sizing problem Thursday. Powered by the company’s pre-existing body modeling technology, the Body Data NFT records a consumer’s various body measurements in a token that resides in the owner’s crypto wallet. When visiting a participating retailer’s e-commerce site, Body Data NFT holders will be able to connect their crypto wallet and immediately receive size recommendations that are mapped to the brand’s own sizing charts. When sizing varies within a brand, the tool will be able to recommend the appropriate size for each individual item.
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Though Bold Metrics has already begun creating Body Data NFTs, a broader rollout of the technology remains on the horizon, said Morgan Linton, co-founder and chief operating officer of Bold Metrics. Though much will depend on how quickly brands move toward Web3—in this case, that simply means allowing customers to connect their crypto wallet—Linton estimated that Bold Metrics will begin adding functionality with its first retail partners in the first half of the year.
“It’s going to be somewhat of a waiting game as more and more of these brands start to get more comfortable with Web3,” Linton said. “I think in the beginning, we’ll end up partnering with brands that are like ‘You know what, we want to make it so that people don’t have to create a profile on our site, they can just like log in with their Coinbase wallet and like poof, it pulls in their name.’ I think that’s probably what will pull it all through the keyhole…. We think they’re probably going to be just doing it for other reasons and then we’ll be just an additional added benefit.”
Creating the NFT will be free for consumers, minus any fees associated with creating the token. All that is asked of them is that they answer a “handful of simple questions” about their weight, height, shoe size and other such measurements, all things that most “people can answer off the top of their head,” Linton said. On the brand side, Bold Metrics will ask its partners to pay licensing fees for the snippet of code that reads the NFT and connects it back to their internal size data.
StockX
Though the discussion of NFTs in retail and fashion has often included the possibility of using virtual tokens as a way to authenticate physical luxury goods for resale, that specific application has yet to see widespread adoption.
On Tuesday, however, StockX presented one version of what this could look like. Its debut “Vault NFT” collection ties a virtual token to a real, physical sneaker that StockX holds in its “climate-controlled, high-security vaults.” Those who own a StockX NFT then become eligible for “exclusive” benefits, including access to limited promotions, early releases and “cultural events.”
“So if you’re bullish on a shoe, consider investing in a Vault NFT,” StockX wrote on its site. “You take possession of the NFT immediately after the transaction is complete, meaning it is the fastest way to flip. And with no shipping costs, and market-leading low seller fees at a fraction of the cost, there’s a lower hurdle for profitability.”
Twenty-four hours after the NFTs dropped, all but one has already sold for more than $1,000 at least once. The only exception is one of Adidas’ Bad Bunny collabs, the owner of which is demanding at least $99,999 to trade. Two of the NFTs have traded for $5,000.
“To date, unlike traditional stock exchanges, the millions of orders executed on StockX involve physical products moving from sellers to StockX for authentication, and then ultimately to buyers to be worn, collected, resold, or simply held as an alternative investment,” StockX CEO Scott Cutler wrote in a letter published to the company’s website. “We’ve always known that this was just the beginning…. We believe that the physical items that trade on our platform are part of a new alternative asset class that can be uniquely associated with NFTs.”
Though StockX’s initial NFT collection is limited to just eight tokens, the resale site appears to have grander ambitions. According to a graphic on its website, the sneaker and streetwear marketplace is collaborating with “friends, both new and old,” for a range of NFT offerings that will be available exclusively on its site. Each NFT “will give holders exclusive access to new utilities and benefits,” it said. Looking ahead, StockX said its future NFT plans include expanding its NFT offerings, personal wallet withdrawals, crypto payments and crypto payouts.
Gap
Last week, Gap announced the launch of its first collection of NFTs. The “Gap Threads” collectibles have rolled out in individual waves, each one more expensive and rarer than the last. The first “Common” tier dropped Thursday, with each digital token selling for 2 tez, roughly $8 (the tez or tezzie crypto trades on the Tezos blockchain). In the second “Rare” wave, which dropped Saturday, each NFT was priced at 6 tez, about $24.
Gap released the third “Epic” set on Wednesday. Unlike the previous two releases, these NFTs require prospective buyers to collect four tokens from the Common tier and two from the Rare, and then fuse them into a special collector’s NFT that qualifies the owner for the Epic NFT, as well as a physical, limited-edition hoodie. The Epic NFT itself costs 100 tez, or nearly $400, and only 100 can be created. A final auction for a one-of-one NFT is scheduled for Monday.
“As part of our mission to create enduring customer relationships, our teams are constantly innovating,” John Strain, chief digital and technology officer for the Yeezy collaborator, said in a statement. “We are excited about the possibilities that a more planet-friendly blockchain technology can unlock for us and all the new ways it will enable us to connect with our customers.”
MetaBirkins
In late October, Nike made headlines when it filed a series of trademark applications that would cover “on-line, downloadable virtual footwear, clothing” and accessories. A range of companies have since followed suit, including Walmart, which in the last days of 2021 applied to protect virtual merchandise, as well as what sounds like crypto wallets and an in-house cryptocurrency.
Authentic Brands Group has also filed its own set of applications around its “Shaq” trademark. The filings’ listed goods and services include downloadable, virtual footwear, apparel and accessories; online, non-downloadable virtual footwear, apparel and accessories “for use in virtual environments;” and “retail store services featuring virtual goods.” Basketball legend Shaquille O’Neal is Authentic Brands Group’s second-largest individual shareholder.
A new lawsuit from luxury goods maker Hermès International will put the necessity of these trademark applications to the test. Filed Friday, the complaint accuses the creator of the MetaBirkins NFT collection, Mason Rothschild, of, among other things, trademark infringement, false designations of origin, false descriptions and representations, trademark dilution and cybersquatting.
Rothschild first made headlines for his Birkin-inspired digital artwork when he sold his one-of-one Baby Birkin NFT in May last year for $23,500. The image, which transposed a 40-week-old fetus on the side of a Birkin bag, later resold for $47,000. After months of quiet, Rothschild unveiled the MetaBirkins collection in December. The line consists of 100 digital collectibles, each of which depicts a Birkin bag covered in fur. According to Hermès’ lawsuit, the first NFT sold for more than $42,000. As of Jan. 6, the total volume of sales for MetaBirkins NFTs had allegedly surpassed $1.1 million.
Hermès contended that Rothschild’s repeated use of the word “MetaBirkins” to promote his NFT collection constitutes trademark infringement. To argue its point, the fashion house pointed to the NFT creator’s own statements where he has complained of others who he says “counterfeited” his MetaBirkins NFTs. “The existence of ‘fake’ or ‘counterfeit’ MetaBirkins NFTs indicates that MetaBirkins is a trademark as an indicator as source,” Hermès argued.
Rothschild has defended his actions by asserting that his NFTs should be protected as artwork. In a letter posted to his social media Monday, he described Hermès’ claims as “groundless” and compared his NFTs to Andy Warhol’s famous Campbell’s soup can artwork.
“I have the right also to use the term ‘MetaBirkins’ to describe truthfully what that art depicts, and to comment artistically on those bags and on the Birkin brand,” Rothschild wrote. “The fact that I sell the art using NFTs doesn’t change the fact that it’s art. It’s quite clear from reading Hermes’ complaint that they don’t understand what an NFT is, or what NFTs do.”
Hermès’ lawsuit specifically addresses the artist defense, contending that “the title of ‘artist’ does not confer a license to use an equivalent to the famous Birkin trademark in a manner calculated to mislead consumers and undermine the ability of that mark to identify Hermès as the unique source of goods sold under the Birkin mark.”