In the last few years many fashion houses tried different strategies to improve their visibility or attract new consumers, from letting young and famous millennials on their runways to the worrying "see-now-buy-now" scheme. Other companies honed their social media skills or jumped on the e-commerce bandwagon. Yet for some fashion houses things do not seem to have worked as they had hoped. Producing desirable clothes and accessories is one of the keys to a fashion house success, but can it genuinely win the heart (and the money...) of new consumers in an age in which nothing lasts more than 3-to-6 months? Or should such companies keep on running after the next influencer, the perfect model, the amazing super famous testimonial? Maybe there is an easier way for fashion brands to reattract the attention of consumers – turning to cryptocurrencies.
As crazy as they may sound digital currencies such as Bitcoin and Ethereum have been attracting the attention of many people, including investors. Originally launched in 2009, and usually found in the same sentence together with the words anarchists, pirates, hackers, libertarians and drug dealers, Bitcoin recently reached record valuations with prices topping $5,000 in September this year.
Having started the year at less than $10, the Ethereum has reached at the time of writing this piece a value of $300. In the meantime, new coins are generated on a weekly basis for the happiness of geeks and freaks and more people are jumping on the bandwagon.
A few days ago Goldman Sachs stated it was exploring a new trading operation for Bitcoin and other digital currencies, if that happens it will become the first Wall Street firm showing an interest in the controversial market of digital currencies.
Japan's government also embraced Bitcoin, creating regulations to legitimize its trading; North Korea is allegedly using cryptocurrencies to evade international sanctions, while China banned Bitcoin exchanges fearing the possibility of capital flight. The interest around ICOs (Initial Coin Offerings) has also grown, with sites such as Token Report building the world's largest database of verified information on a network that is capable of covering every tokenization that emerges.
One of the main features that attracted users to cryptocurrencies is the fact that users can eliminate the exchange value directly, without recurring to a middleman, so without turning to financial institutions such as banks that many consumers do not trust anymore.
The main problem with cryptocurrencies, though, is that they are highly volatile and unstable, constituting a risk for investors.
At the same time, cryptocurrencies are definitely proliferating and they may successfully be used for cross-border commerce or to facilitate transactions (Bitcoin is recognized as a payment method on quite a few sites; there are services offering loans in Bitcoins and even prank sites where consumers can buy and send horse shit to their enemies and anonymously pay in fractions of Bitcoins).
Central banks may try and shut down digital currencies before they go mainstream, but then why would Goldman Sachs be exploring the possibilities of new trading operations for such currencies and why are analysts so interested in these relatively new currencies? The truth may be that what was born as something linked with illicit activities may end up pushing into the mainstream investment world, even becoming a safe haven for some fashion companies selling high-end luxury products.
In a way buying luxury products in cryptocurrencies almost makes sense: consumers may be more eager to invest in a luxury product a fraction of a Bitcoin they may have mined rather than some hard-earned money. So fashion and especially those fashion companies trading on the Stock Exchange shouldn't ignore cryptocurrencies. And while it may be tricky trusting them in the long-run, launching a limited product that may be bought in cryptocurrencies or including cryptocurrencies on their e-commerce sites may help some fashion companies stirring consumers' interest and producing some media revenues. That's at least until fashion generates its own cryptocurrency - PradaCoin anybody?
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