The use of non-fungible tokens (NFTs) in the fashion industry

Abstract

Keywords: Non-fungible tokens, NFT, fashion industry, marketing, brand equityWith the rising interest in the online world due to the COVID-19 pandemic, the NFT market gained popularity over the last two years. Recently, many fashion companies started using NFTs when searching for a suitable marketing strategy in digital times. All of them probably encountered the same problem: The lack of research about NFTs, in particular, their implementation and utilities in marketing. Therefore, the purpose of this paper is investigating the use of NFTs in the fashion industry. The research question to be answered is “How does utilizing NFTs as a marketing tactic contribute to a fashion company's brand equity?” as brand equity is an important factor for every brand. Therefore, a mixed-method study was carried out by, first, conducting interviews with seven experts and, second, by creating a survey. The results of the seven coded interviews show that the use of NFTs as a marketing tactic contributes to the brand equity of a fashion brand as NFTs can generate value for brands. Fashion companies can reach new customers and can create a customer-brand relationship, and therefore increase brand awareness. The survey was analyzed statistically by using t-tests, a correlation test, and chi-square tests. The main findings were that people are not aware of NFTs in general, and the more experience/knowledge they have about NFTs, the more inclined they are to purchase them. To conclude, utilizing NFTs as a marketing tactic in the fashion industry can definitely contribute to brand equity in various scenarios.