Prada is releasing its first NFT in partnership with Adidas: a crowd-sourced digital artwork in a Beeple-style collage, in luxury’s newest iteration in the metaverse.

From 24 January, anyone can register to submit a photograph using a specially-designed filter, that will be manipulated, scrambled up, and 40 per cent of the image removed, so as to be anonymised. Three thousand of the individual photographs will be selected by raffle, and minted by Adidas as unique NFTs for free. The individual who submitted the artwork will remain the owner, able to sell their NFT on the secondary market. The selected images will then be combined as tiles into one mass patchwork NFT, designed by digital artist and creative coder Zach Lieberman. That one-of-one NFT will be auctioned online on digital art marketplace SuperRare, and displayed as a large-scale installation in Prada and Adidas flagship stores. The patchwork style is similar to Beeple’s $69 million “Everydays: The First 5000 Days,” which set a record for a digital artwork at Christie’s auction.

Co-creation with users, community access and co-ownership make this NFT project a stand-out for the luxury industry. Adidas launched its first NFT with profile picture phenomenon Bored Ape Yacht Club, NFT influencer Gmoney and comics series Punks Comic in December with a community-driven ethos. However, this project, which crowdsources submissions from Prada and Adidas’s audiences, is a shift away from the typical top-down relationship of luxury brands. The approach requires some relinquishing of control, says Ana Andjelic, brand consultant and author ofThe Business of Aspiration,who expects to see more brands experiment in this space.

The project, named “re-source”, is linked to Prada and Adidas Originals recurring Re-Nylon collection, which uses regenerated nylon yarn in select handbags and accessories, and will inspire the final large-scale artwork. The third Re-Nylon collection launched this week. The majority of the proceeds from the primary sale and all secondary sales go to Slow Factory, a nonprofit organisation and institute working to create climate-positive solutions and inclusive communities.

Entering the metaverse was “unavoidable” for Prada, Lorenzo Bertelli toldVogue Businessin an interview. The son of Miuccia Prada and Patrizio Bertelli, who oversees marketing and corporate social responsibility at Prada Group and isexpected to succeed his father as CEO, added: “If Prada does something, there has to be a meaningful reason behind it. It’s not just about putting a logo on something. As a brand, you need to understand and have a reason for joining a new channel or an emerging trend.”

He compares the emergence of the metaverse to social networks: “Many people in luxury made this mistake in the past thinking that it was not so relevant. Like social media, I don’t think that NFTs are good or bad, but they are a digital tool and it depends on how you use them.” The entrant with Adidas is firstly about credibility in the space, he added.

The first NFT from a luxury fashion brand — an art film from Gucci — was announced in May. Since then, momentum is gathering pace across the broader fashion and beauty industries. Louis Vuitton,Burberry,Nars, Givenchy andCliniquehave all issued NFTs.Balmainhas launched four NFT projects in just a few months. Prada's NFT with Adidas is different because it leans into the Web 3.0 principles of co-creation and co-ownership with its community. NFTs from Nars and Givenchy include static art and collectibles. Burberry and Louis Vuitton’s experiments with digital clothing through video games, while Clinique and Balmain are using theirs for rewards and loyalty-building.

The partnership with Prada positions Adidas not only within the luxury sphere, but also as a sort of metaverse navigator to other brands. Adidas is a cultural juggernaut, having used collaborations with Kanye West, Pharrell, Run DMC and BAPE, to push the boundaries of product design and successfully paving its way into the streetwear community — a space that trades in heavily hyped, limited-edition products that offer a sense of belonging, much like the crypto market.

“Our intent is to help people participate in these new emergent spaces that they feel like they don’t have access to,” says Erika Wykes-Sneyd, VP of brand communications at Adidas Originals. The brand’s goal is to remove obstacles to entry into the NFT space, which is being made accessible in this case via a digital art format, she adds. In its first NFT drop, 30,000 were minted to 21,000 unique individuals, says Wykes-Sneyd, many of whom were first-time crypto wallet owners.

Community and access

The crypto world is on fashion’s radar, and Prada has built relationships with key figureheads: Gmoney,a widely followed crypto investorwho uses a Cryptopunk avatar with an orange beanie and worked with Adidas on its first NFT, attended the luxury brand’s Autumn/Winter 2022 menswear show in Milan this week. He was wearing his record breaking ETH 140 (around $440,000 at the time of publishing) Cryptopunk NFT on the front row (via an Instagram post).

“This is important for Prada because the brand is always looking to new frontiers. To really understand the present society, it’s important to create with those communities,” Bertelli explains. “You have to speak with the people who understand the meaning behind-the-scenes. You cannot judge superficially, looking from far away, at what is going on.”

Prada is making a conscious effort to be an early adopter: in May 2021, it was among the brands that experimented withSnapchat's new AR tools. In April Prada also joined LVMH and Cartier, part of Richemont, to foundthe Aura Blockchain Consortiumdeveloped by LVMH.

Access plays a factor in attracting new and existing customers via NFTs. Of the 3,000 submissions for the Adidas for Prada Re-Source project, 1,000 of the spots will be reserved for holders of Adidas Originals’ “Into the Metaverse” NFT, and a further 500 reserved for users who attempted to mint the NFT in the public sale but failed. Furthermore, current holders of its first NFT will also be the first to know about this project via a newly created “Into the Metaverse” server on Discord, a gaming app that has evolved to become an indispensable toolfor brands and creators to connect with their fans.

There’s scope to take it further. In the future, a luxury brand including Prada could invite talent to collaborate and also give some form of ownership in the form of tokens or digital currency, Andjelic suggests. “There could be aDAO group of Prada creators. The point is that luxury brands don’t need to release ownership of their main collections, but they can start creating capsules around specific topics like gender neutrality or sustainability. For emerging talent it could be more rewarding than winning a CFDA prize,” she says. “This is still very unexplored.”

The open-source project points to the importance of creating an equal and collaborative system rather than another drop, Andjelic continues. She sees a future opportunity for Prada to co-create with emerging designers or creatives with aligned values. “We may find ourselves soon in a situation where the best talent isn’t within organisations. It’s a big problem in the fashion industry, but they can tap into the creator economy and use crypto and web3 as a way to evolve their brand.”

A successful NFT should embody ideas and values that people are proud to associate with, display, and desire to own, experts suggest. Andjelic recommends that NFT projects start with the customer and revolve around the type of shared values and interests that attract people to the brand in the first place. “All of the designs right now are branding exercises.”

Evolving the ecosystem

Many brands, however, risk appearing gimmicky as there isn't a clear link between their positioning and purpose in the physical versus digital world, experts say. Many are also approaching Web 3.0 as an endpoint, rather than thinking of it as a springboard to something bigger they can build. “What Prada is doing is a step in the right direction but it will be interesting to see what will come next,” says Andjelic. “What will happen to those whose 3,000 NFTs were minted? Will they become members of a club? Are they going to have preferential treatment next time? Right now, it’s a one-off and we will have to see how the next Prada innovation will build on this.”

Looking ahead, Prada is thinking about how to take NFTs beyond simply being a branding exercise. “We are looking at NFTs as a potential revenue stream [but] before you think about revenue, you have to assess whether what you’re doing is credible,” says Bertelli.

Bertelli believes it’s a possibility, noting that Prada has more metaverse-related projects in the pipeline for this year. “There is more than one winning combination. I think it’s a matter of time that everybody, as well as us, will understand which is the better way to tackle this topic. I think you need to keep your eyes and your mind open,” he says. “This is just a starting point for us, not a one-off project.”