On March 13th, Instagram’s parent company, Meta, announced that it would be cutting NFTs from its platform as part of a wider cutback to focus on profitability. This decision has raised questions about the impact on the fashion industry, as many brands have used NFTs as a way to connect with customers and build loyalty.
While NFTs have faced some challenges due to their crypto connection and fallout from FTX, they have been popular in the fashion industry over the past two years. The sector earned $245 million from NFT sales in 2022, with Nike generating $91.2 million in royalties and another $93.1 million in revenue. Many brands, such as Gucci, Nike x RTFKT, and Adidas, have successfully built new web3 communities based on NFT sales. YSL Beauty has also launched multiple NFT drops focused on loyalty, indicating the potential for NFTs to be used as a long-term, always-on loyalty program with their community.
However, Instagram’s decision to cut NFT tools from its platform means that brands will no longer be able to offer NFTs and users will not be able to put them in their profiles. The dates for when these will be cut from the platform will be decided in the next few weeks. It is unclear what will happen with existing NFTs that users have uploaded to their profiles.
Despite this setback, there are still unexplored opportunities for customer experience with NFTs. CRM software company Salesforce has launched an NFT loyalty tool called Salesforce Web3, aiming to help brands develop their NFT loyalty programs. With the tool, brands can mint and sell NFTs, view real-time customer data, and monitor blockchain activity. The platform launched with various subscription tiers, and toy company Mattel and clothing brand Scotch and Soda have already launched multiple NFTs in Salesforce’s pilot program, with other fashion brands set to join the loyalty program in the next few months.
The decision by Instagram to cut NFTs from its platform has created an opportunity for newer, younger NFT platforms to fill a potential void. Many companies, both big and small, are exploring new ways to interact with audiences and take loyalty programs to new heights, using web3 to do this. While Instagram’s decision to cut NFTs may seem like a setback for the fashion industry, it has opened the way for more startups to create new things and fill a rising consumer need to express their identity online and share their digital collections.
