Following Adidas, Gucci and SUPERPLASTIC into the Web3 space is luxury jewellery brand Tiffany & Co. On Monday 1 August 2022, the jeweller announced that it will be launching its own non-fungible tokens (NFTs) exclusively available to CryptoPunk owners.
Dubbed ‘NFTiff’, the collection involves 250 digital passes which may be minted when purchased and redeemed by CryptoPunk holders for the creation of a bespoke pendant—along with an NFT artwork that resembles the final jewellery design.
The custom pendant is set to be designed and crafted by Tiffany & Co. artisans, who will convert 87 attributes and 159 colours that appear across the collection of 10,000 CryptoPunk NFTs into the most similar gemstone or enamel colour available. “Depending on which CryptoPunk owners purchase pendants, each piece will use at least 30 gemstones and/or diamonds to create the custom designs with the highest fidelity to the original NFT art,” NFTiff’s website reads. “Examples of gemstones include but are not limited to Sapphires, Amethyst, and Spinel.”
While NFTiff is set to launch on Friday 5 August at 9 am (CST)—priced at 30 Ethereum (ETH) or $50,000—and will only be available for purchase via its website, it should be noted that each customer is limited to a maximum of three token purchases.
Spearheaded by Tiffany & Co.’s executive vice president for product and communication, Alexandre Arnault, the process and first examples of the Punk pendants began in early April—following a boom in interest when he posted a photo of a rose gold and enamel Tiffany pendant made to look like his Cryptopunk #3167.
“These clients obviously skew a bit younger than our [classic] client base,” Arnault told Women’s Wear Daily. “It’s an anonymous [population], it’s not like you know who owns what, but what we generally understand is that they are younger and very affluent, a lot of them made large amounts of money in the crypto sphere. People need to understand that a lot of the things in their world are linked to luxury like desirability, scarcity, trends—they understand the ups and downs.” The publication also highlighted how Tiffany is among the first jewellers in its category to offer a bespoke jewellery service to NFT holders
While the project is only geared toward a base audience of 10,000 people, Arnault continued by stating that NFTiff “is a way for us to get into people’s lives who wouldn’t necessarily be primary customers of Tiffany.”
“It’s a way for people to get access to our brand,” he explained. “I don’t think we will be in the metaverse tomorrow morning, which is where these people spend most of their time, so it’s a nice way to reach this community without doing anything that doesn’t make sense for the brand.”
Tiffany & Co.’s announcement, however, seems to have caused a stir among the community in question—with the 30 ETH price being a major point of controversy. As noted by CNET, ETH is down a whopping 54 per cent since the beginning of the year. In fact, crypto is down so bad that NFT creators have shifted to lowering asking prices and even giving away NFTs for free in hopes that they’ll profit from secondary market royalties. All of this makes August 2022 a bold time to be launching such an expensive NFT collection.
At the same time, should all the limited-edition pendants sell out, Tiffany & Co. stands to make 7,500 ETH (currently $12.7 million).
In the last few weeks, non-fungible tokens (NFTs) have been on everyone’s lips. The NBA, Twitter’s founder Jack Dorsey and even Grimes got involved, resulting in the blockchain-backed unique digital assets selling like hotcakes for startlingly high prices. Even though NFTs are currently making headlines for being mostly used to sell digital art, it became clear to many that they’re bound to take other industries by storm too.
Among those is the fashion industry, which is the one I’ll focus on for the sake of this article. At a conference on fashion and technology hosted by Vogue Business on 18 March, 2021, Robert L. Triefus, an executive vice president at Gucci, said it was inevitable that luxury brands would soon begin to design NFTs.
Gucci has yet to delve into the market itself, but for three or four years already it has been experimenting with virtual spaces, creating digital products for games such as The Sims. In 2019, Gucci also integrated AI into its supply chain and stores in order to reduce waste. More recently, the brand also introduced a $12 pair of digital trainers users can purchase through its app and wear in virtual worlds such as the online game platform Roblox.
While the digital trainers mentioned above aren’t exactly NFTs, because the latter are unique and can’t be replaced with something else and the former are, well, the complete opposite, it’s not hard to imagine Gucci—and many other fashion giants—releasing NFTs for original virtual goods, or even for digital versions of physical goods shoppers have purchased, in turn allowing them to wear their real items into digital worlds such as Fortnite for example.
“There’s no reason that today you couldn’t buy a bag, get an NFT,” said Ian Rogers, chief digital officer at LVMH from 2015 to 2020, in a separate talk at the conference. For those who don’t know what LVMH represents, it is the owner of brands such as Louis Vuitton, Dior, Celine, Fendi, Loewe, Givenchy, and more. Therefore, Rogers—who now works for cryptocurrency firm Ledger but remains a consultant for LVMH—stating that is a pretty big deal.
NFTs have clear applications in luxury. First of all, it’s widely known that fashion doesn’t rely only on utility—barely so, as a matter of fact. Fashion is a means of self-expression but also a way to communicate status and identity. Shoppers today are seeking more elaborate ways to signal these social attributes in the digital world as well as in the physical one. The industry has known for a while now that it needs to focus on digital opportunities, and NFTs have just reinforced that understanding.
“You don’t buy a luxury handbag because of its incredible utility. You buy it because the brand has built culture, and that culture is something you want to be a part of,” said Rogers. And yes, customers want to be part of a specific brand’s culture, but they also want something else that NFTs can offer them: exclusivity.
Although a digital asset can be copied, the private key proving ownership of it is unique and one-of-a-kind. This creates a sense of scarcity, which is already interlinked with the value of specific fashion items. People don’t only buy a Gucci bag because they might be needing a new bag, neither do they buy one just because they know that its quality will be perfect. They buy a Gucci bag because they know that only a tiny part of the population will be able to afford the same one, therefore turning it into a rare item, only available to a specific niche. NFTs could potentially represent that same exclusivity factor.
On the other hand, “it’s a world that still has to be understood,” Triefus said when speaking about how pricing virtual goods will work. “For us at the moment we’re looking at experiments and pilots where values are attached to certain experiences or digital products so that we can understand what the value system is.” Already, sceptics are speaking of the NFT craze as a “bubble waiting to pop.”
Just like many other topics in life, only time will tell, but in this case at least, we can know for sure that whatever happens next will be permanently recorded, from start to finish!