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Conversation RTFKT, Ledger: Will NFT disrupt the fashion and luxury industry?

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Richemont and LVMH are both interested in NFT, and Gucci has hinted that NFT will be available

NFTS and Luxury: A Conversation With Ian Rogers of Ledger and Benoit Pagotto of RTFKT Studios

Source: Jing Daily

Originally written by Avery Booker

RTFKT Studio's creative debut in February 2021 saw $3.1 million in NFT sneaker sales in just seven minutes.

Over the past year, NFT has emerged as one of the hottest areas in the crypto world, attracting a lot of attention from the art world, luxury goods, celebrities, and other public figures, but it remains to be seen whether the technology will be a good fit for luxury. Richemont and LVMH are both interested in NFT, and with Gucci hinting at an NFT sale, it seems only a matter of time before the rest of the industry joins in.

Jing Daily recently spoke with Ian Rogers, chief experience officer of Paris-based blockchain startup Ledger and former chief digital officer of LVMH, and Benoit Pagotto, co-founder of innovative NFT brand RTFKT Studios, Discusses the intersection of luxury and NFT and how it will evolve in the future. This interview has been edited for content and length.

Jing Daily (JD) : Let's start from the beginning. Where did you learn about the intersection between luxury, fashion, business and NFT and cryptocurrencies? How does that affect what you're doing now?

Ian Rogers, IR:I think whether it's luxury brands or ordinary clothing brands, they will end up doing what Benoit [at RTFKT Studio] has done. I think Benoit is a pioneer in showing what is possible in this direction and what buyers really want. Then we can all hope that other brands see what Benoit is doing and start catching up with him.

I've been working in digital music for 20 years, working closely with artists and artist managers, like the Beastie Boys and their company, which I started working with in the mid-90s. The company I started when I was in college was to help record companies build their websites. In 1994 and 2021, I was exposed to the same people, from the digital music world and the luxury world. I am still consulting for LVMH and joined the board of Dr. Martens and Ledger in January.

When I took the job in September, I really didn't expect the relevance to be so high. I think this is a revolution, and there is something completely different in this revolution. And it's worth mentioning that if you look back at the Internet revolution, some of the big companies were really dragged along by consumers.

I think it's going to grow even faster. If you look at Adidas's quarterly report a month ago, they were very clear that their focus should be directly to the consumer. They report that they want to remove 1, 000 stores from their retail network, and that they want to increase their direct-to-consumer share from 30 percent to 50 percent. Put this in the context of NFT, and Benoit is proving that digital plus physical goods have greater value than physical goods alone.

Ledger's hardware wallet, photo courtesy of Ledger

Benoit proved it was possible to combine a $4,900 digital item with a $100 physical item, and then maybe Adidas will start selling digital collectibles on its website that other retailers don't have on their websites. It's way ahead of the existing Internet companies because it knows what consumers care about. It's like, "Oh, this threatens the monopoly of some companies." "And in the music industry, some people say," We want to sell discs for $17, not digital files for $1." They were dragged into this new world.

And sneaker companies are eager to join Benoit's new world. And now it's moving fast, much faster than any Internet company. I think they're going to face a whole new set of problems, like what if someone returns something? How does a company deal with the security of a $3 billion digital stockpile? These will be new problems. But I think it will be resolved in the next 12 months.

JD: What do you think, Benoit?

Benoit Pagotto (BP) :I think there's a (long) brewing revolution going on and people in the traditional art world are freaking out. As you can see, Christie's and Sotheby's are getting restless. They waited two or three months before they got moving. I think they have a better understanding of how the digital revolution is going to seriously affect their business.

But I think the luxury sector will have an opportunity because it is a sector with heritage, archives and history. I also think they will have difficulties, because this is a revolution born out of a culture that they have never been exposed to. Even though we have fewer resources than some of these people, we have resources they don't have, which means we have cultures they don't have -- games, crypto culture. They're not going to spend a lot of time, every single day, learning this stuff.

Second, and most importantly, we have community and youth talent. We have a very close relationship with young talent. For luxury companies, what you see there is always the same type of talent from the same company, and today they are making the decisions. But now, I think the potential for innovation is greater than ever, like RTFKT, which was one of the first new brands to come into this space and be born out of it.

Just like the Gucci news exploded on social media a few weeks ago because they saw the news about our NFT sneakers and they wanted to get into the game with their $12 non-NFT digital sneakers. You can see that they are still driven by a very short-term profit, rather than by how they engage with the community, the ecosystem and the consumers. I don't think Gucci is going to be able to drive the revolution that's going on.

However, there may be some luxury enterprises that will make important contributions to this revolution, and there will certainly be some big brands in the future. There are good opportunities for the luxury industry.

JD: For luxury brands, in order to keep up the hype, they have to use these technologies to do things internally, like authentication or VIP privileges. But you can also use your company and bring them in to work with people who have good ideas, to do something together, right?

BP:The attitude of the luxury brands that contacted us was, "We'd love to do something with you." We also understand why they want to come to us, because they want to be genuine, and it seems like they come through the community. But what I said was, "I don't know how to make a luxury watch. I can design one, you build it for me, can I benefit from your craftsmanship?"

Bringing together the worlds of sneaker lovers and crypto art collectors is a match made in heaven, and one that luxury brands should focus on. Photo :Fewocious X RTFKT

That's what I'm doing with luxury brands now, because I want to get something from them, and if I work with Gucci it would be a lot of recognition, but if we work with a famous crypto artist like Fewocious, we get a lot more out of it than just recognition. If we work with Gucci our own social media won't get a lot of publicity, because there will be a lot of other media coverage, but if we work with a really good, respected, creative crypto artist, it's a much more valuable thing.

IR:I want to point out that no other industry understands the reason for going direct to the consumer as much as the luxury industry. I mean, Warby Parker may be a new company, but everyone in the luxury industry is looking at people who have been completely vertically integrated for more than 20 years. Louis Vuitton, Hermes, Dior, Chanel, every brand wants to be as famous as these four brands. You know, that's why at LVMH, we always say the business is direct-to-consumer. Everything else we do is geared towards a direct-to-consumer business.

So my view is that NFT is an incredibly important resource and a direct to consumer expansion of the business. That's why it's a good fit for the luxury industry. Any brand that's really focused on being a direct-to-consumer business, like Nike, like Adidas, like

So my view is that NFT will actually prove to be an incredibly important resource and a direct consumer business expansion. That's why it's actually a place where luxury might lead the way. Any brand that is truly focused on becoming a direct-to-consumer business, such as Nike, Adidas, Dr. Martens, will be a quick and smart entry into the NFT space.

The same is true of music. Music has become a consumer product, but there is still a vibrant market for collectibles. There are a lot of people who buy vinyl but don't have record players; There are a lot of people who buy CDs but never open the plastic. So I think there must be a lot of people who buy sneakers but never take them out of the box. This is not new in a way, but they will become part of our lives in a completely different way.

Digital artist Beeple recently sold his NFT work at Christie's for $69 million. Photo: Christie's Auction House

I loved the interview with Beeple and Kara Swisher. This is great, because I like Beeple's look at showing that he doesn't like to talk about the future or deny the past. I think a lot of people like to do both things. Mark Cuban likes to tell you what the world is going to be like in five years, and that's why he invests in a project today. And some people say, "But I don't want to collect digital stuff." Those people are still living in the past, and what Beeple is doing is like saying, "Look around guys, we live in the network, we're human, is there anything else you want to know?"

So I think that's where it gets interesting, confronting who we are and the world we live in, NFT is a sign of equality, it's as simple as that. So I think we have to build around that, and that's what all of us are trying to do. And even Dr Martens and LVMH are doing it. Everyone has a role to play because, at the end of the day, we are all there to serve our customers.

BP:And again, I think it's very important -- the question that I hate all the time -- what happens five years from now? I always say that whoever answers this question is a big liar, because no one can know what the future will bring. For me, I just focus on what we can do every day, and that's why at RTFKT we always have a lot of ideas. It's a place where we can set new standards every day. If you do it with passion, creativity, and execute well, you're setting a new standard.

So it's not just about thinking about what's going to affect my brand and what I can do in five years' time, it's about what you can start doing today and who you can work with to make everybody's idea come true, just like you can make an imagination out of a science fiction book from the '70s come true every single day now.