'Augmenting' tradition through innovation - the implementation of NFTs in the high-end fashion industry

Abstract

This study investigates how high-end fashion companies use non-fungible tokens (NFTs) to balance tradition and innovation, enhancing competitiveness. Drawing on secondary data and a survey of 178 respondents, a mixed-method approach evaluates 12 companies' 'phygital' strategies - mapped against brand awareness and NFT readiness. Two main goals emerge: 'entertainment', aimed at expanding consumer bases, and 'brand exposure', which deepens brand engagement through exclusive or virtual products. Consumer perceptions are analysed, particularly regarding NFT video games, clothing, and art. The study identifies three NFT-related consumer needs - 'elitism', 'playfulness', and 'brand signalling' - and segments two consumer clusters: 'status seekers' and 'utility explorers'. The research contributes to the innovation and change literature by applying paradox theory to explain how phygital strategies support competitiveness in luxury fashion.