NFTs combined with NFCs
The luxury fashion industry has started using NFC Tags (shorthand for Near Field Communication) in combination with NFTs to link physical objects with digital assets — thus the term "Phygital." NFTs have been around for about ten years, and they were regarded as the standard bearer for digital asset identification. However, they were not linked to real-world assets and were something of a niche interest, subject to a wide degree of skepticism over their true value. Being linked to physical objects make NFCs more useful not just for consumers but also brands.
Payal Singhal X Endstate NFC-Embedded Sneakers
Payal Singhal, a leading global South Asian fashion house much sought after for its modern Indian occasion wear, announces a first-of-a-kind collaboration with American tech-enabled sneaker brand and tech platform Endstate. Endstate, a VC-backed startup, transforms passive products into a seamless connection to exclusive experiences, providing unprecedented access to the worlds of athletes, teams, artists, and fashion through Endstate’s NFC (near-field communication) chip. The Payal Singhal x Endstate collection launched today and is priced at US$ 250. It is available exclusively at Endstate’s website and Payal Singhal’s boutique in New York as limited edition stock.
"The Payal Singhal x Endstate collaboration is intended for the international market and launches in the US, an important market that I’ve been working for the past 25 years. It has been a thrilling experience as it’s our very first endeavor with sneakers as a category and an integration of tech into the product. The entire process of co-creating the collection with the Endstate team has been full of new learnings and insights into the evolved international sneaker market. The end result is a perfect synergy of what both brands represent and a fresh outlook on footwear while celebrating quintessentially Indian motifs and design aesthetics," adds Payal Singhal.
Drawing inspiration from Payal Singhal’s creative cues referencing decorative adornments of ancient tribes, Endstate co-founder and former Nike and New Balance designer, Stephanie Howard, designed the sneaker to merge east-west and historic-contemporary cultures. Each pair is embedded with Endstate’s 3chip, providing verifiable authenticity and unlocking access to exclusive content, offers, and events for sneaker owners with just a tap of their phone.
A New Marketing Tool Without Apps or Custom Hardware
With a saturation of email, text, and social media marketing, brand messaging has become lost next to other brands’ and consumers' personal feeds. This has resulted in stale loyalty and rewards. Moreover, brands receive incomplete customer data with no insight into usage and engagement with physical products. There is little connection between online and physical behaviors.
Best High-Yield Savings Accounts Of 2024
Kevin Payne
Best 5% Interest Savings Accounts of 2024
Cassidy Horton
“Marketing channels are noisy, and the only current avenues for brands and sports teams to connect directly with consumers and fans has been email or SMS. We help brands embed NFC chips into their products, so they can provide exclusive content, access to VIP experiences, loyalty rewards, incentives for in-person visits, product transparency, and verified authenticity to their consumers. In turn, they get first-party data and insights into consumer engagement, giving them the ability to truly customize rewards for them. This is loyalty taken to a whole new level, ” said Endstate Cofounder Stephanie Howard.
Forbes Daily: Join over 1 million Forbes Daily subscribers and get our best stories, exclusive reporting and essential analysis of the day’s news in your inbox every weekday.
Get the latest news on special offers, product updates and content suggestions from Forbes and its affiliates.
Sign Up
By signing up, you agree to our Terms of Service, and you acknowledge our Privacy Statement. Forbes is protected by reCAPTCHA, and the Google Privacy Policy and Terms of Service apply.
Payal Singhal X Endstate NFC-embedded sneakersENDSTATE
00:0503:12Read More
Historically, each interaction a brand has with a consumer typically ends when a product is sold. With NFCs, brands can engage consumers pre-purchase and post-purchase extending the relationship, and integrating digital initiatives with products’ physical lives.
Prior to purchase, NFCs can be used in-store to provide product information to customers such as manufacturing, resale, and material info. Post-purchase, they can be used for targeted marketing (access to new content, drops, and collections), loyalty programs (with or without gamification), exclusive content and experiences, and geo-fenced activations.
For its sneaker launch, Payal Singhal is using the NFCs to provide exclusive content, a discount code for customers on, a virtual masterclass session with Payal Singhal, and a chance to win an exclusive invite to its 25th-anniversary event in Mumbai/Delhi later this year.
Managing The Counterfeit Problem
Counterfeits have become a $2 trillion problem for retail brands leading to lost revenue and affecting brand reputation. Verifying authenticity is a critical issue for the burgeoning resale industry which has grown 1.3X faster than the primary market (+28%) to $50 billion in 2023 per Business of Fashion.
In 2023, Cartier, Prada, LVMH, and Balenciaga chipped more than 2 million products to manage the issue of fake goods, which has become an authentication headache for luxury players. Brands see the implementation of NFC tags to verify authenticity as a worthwhile use case for the technology.
Endstate CoFounder and CTO Bennett Collen said, “The brilliance of our chips lies in their ability to seamlessly integrate customer engagement, loyalty, sustainability, and authentication. Our technology has the potential to revolutionize how consumers relate to the products they own. By enhancing physical products with content and experiences, we transform them into items of profound significance. People tend to cherish meaningful products, boosting both retention and secondary demand. The final element is authenticated resale. By enabling brands to benefit from the thriving secondary market, we incentivize the creation of durable, meaningful products, continuously enhanced with new content and experiences for their owners.”
Endstate will soon release DYAD, its secure resale platform that leverages proprietary (patent-pending) technology to facilitate peer-to-peer exchange of authenticated goods with virtually zero possibility of counterfeiting. DYAD captures secondary royalties on behalf of the brand that originally created the product, allowing them to participate in the upside of the exploding secondary market.
Using Blockchain For Sourcing and Sustainability Information
NFCs can be used in conjunction with blockchain technology and NFTs to track a product's journey throughout the supply chain, increasing transparency, addressing regulations, and boosting consumer trust. When NFCs are scanned, they provide the customer with information about how and where the product is made. Customers can learn manufacturing, resale, encoding, and material info all from the NFC. Blockchain technology has the potential to facilitate ethical and sustainable practices in a way that wasn’t unachievable previously.
Actionable Insights for Marketing and Supply Chain
There’s also the use case of supply chain insights. When scanning the same NFC tag, store assistants receive unique information that customers cannot access, like supply chain details and stock quantities.
Insights can also be used to create product clusters based on consumer behavior and engagement with the brand. Brands can push hyper-targeted content and promotions to the clusters they create.
In December, Rtfkt and Nike dropped a physical, NFC-tagged Dunk Genesis version of a digital wearable collectible that people claim by scanning the NFC tag. Nike and Payal Singhal aren’t the only companies that zeroed in on sneakers as their physical counterparts to NFTs. Luxury brands Dior and Balmain also selected sneakers as their NFC-chipped products of choice. Zeroing in on the sneakerhead community has been successful since the early days of Rtfkt, Many brands are running with it, but is the NFC chip more of a brand marketing tactic versus a performance marketing with immediate goals like generating leads and driving sales?
Ownership of the NFC Tag is a nuanced topic because the physical product to which it is attached can change hands without any digital interaction. The question then arises as to how to structure things legally, so that ownership of the digital asset can be successfully paired with the physical product. And what happens if the two end up in the hands of different owners? According to international law firm White & Case, “It looks like the ‘Phygital’ world will continue to grow for retailers, especially for those most active in the Luxury & Fashion sector. Given the premium brand nature of this segment of the market, the potential upsides are significant and also offer a more mainstream market for NFTs in the future. The legal framework is largely playing catch-up in this space and will also continue to rapidly develop.”
Brands are learning to take customized, innovative approaches to creating digital environments for NFC tags and the utility they can offer their customers. NFCs provide a better digital experience which results in better data for brands, and customers simply tap the chip with their phone with no login or app required. From the brand's viewpoint, products with NFCs generate real-time data. Unlike social media metrics, which are often manipulated or purchased, authentic real-life engagement is a highly valuable dataset that is difficult to fake. We will have to wait and see if using NFCs will become more than just brand marketing and actually sell more shoes. The most important benefit they immediately offer is taking the ick out of authentic for the luxury resale market.