In February 2021, NFT marketplace RTFKT sold 600 pairs of digital sneakers in under seven minutes, racking in some $3.1 million in sales. A few months later, in June, a virtual-only Gucci bag sold on Roblox for over $4,000— a price tag higher than its real life counterpart. And fashionistas can now purchase rare digital garments from the likes of Balenciaga, Jimmy Choo and Dolce & Gabbana across a number of NFT marketplaces as the rush for statement pieces that can be flaunted in the metaverse picks up pace.
In many ways, fashion in virtual worlds is poised to emulate what we already see in day to day life, as we’ll want to dress-up our avatars and use fashion as a form of self-expression and status.
Sure, you might not be convinced yet, but some think the idea has legs. Morgan Stanley, for example, recently forecast that the virtual fashion market could be worth over $55 billion by 2030. And we don’t even have to look that far ahead into the future to see whether or not metaverse fashion will take off. As you’re about to find out, there are already a number of brands launching metaverse-only collections and making millions off of fashion NFTs.
Curious to know what are fashion houses doing in the metaverse? Let’s find out.
What Benefits Does Entering The Metaverse Brings To Fashion Brands
Fashion is, as we know, a trendsetting industry, never to be left behind as times move forward. And with the metaverse now rapidly taking shape, it’s no surprise to see apparel brands embracing emerging technology, particularly non-fungible tokens, and experimenting with new mediums. Here are a few reasons why entering the metaverse can prove to be a very successful strategy:
Massive Margins
Simply put, moving to all-digital collections saves designers a lot of headaches. They no longer have to worry about issues such as sourcing raw materials, finding factories and skilled workers or inventory storage. Fashion is a notoriously laborious industry, with couture pieces taking weeks, if not months, to be completed.
Digital designs, on the other hand, can be put together in a matter of minutes. By embracing a virtual approach, creators can dramatically cut their costs and focus their creative efforts in a more efficient way.
These days, virtual fashion can be synonymous with huge profit margins. In fact, a digital garment can represent nearly 100 percent in pure profit for its creator.
Compared to all the costs involved in the extensive process designers and brands have to go through in fashion, the upside is very clear. With minimal labor involved and no (real life) materials needed, minting designs can become a very lucrative business.
Secondary Market Profits
Just as selling virtual fashion can lead to great profits, there’s another tempting reason to experiment with the metaverse and with creating fashion NFTs.
These tokens are built on top of smart contracts, which determine the terms and conditions associated with the underlying digital asset. More importantly, this means that a brand can embed a code related to royalties, so that each time a virtual garment changes hands, they get a cut of the transaction.
The same cannot be said about the secondary market panorama that we have today as normally pieces that are resold bring no additional money to the original designer or fashion brand.
The Fabricant is an example of a digital fashion house that also takes 5% royalty whenever a garment is resold after the first purchase, but they’re not certainly alone in this strategy.
No Inventory or Oversupply
Fashion brands are frequently faced with problems related to overproduction, over-inventory and end-of-season stock. In turn, this forces companies to scramble for strategies in order to rapidly dilute inventory before the beginning of the next season, including slapping steep discounts onto their pieces, and reduce exposure to logistical bottlenecks as those recently experienced during the Covid-19 pandemic.
A virtual fashion collection eliminates any number of these problems by simply staying within the digital environment. In other words, buyers don’t receive a physical version of the garment, though they could be provided with all the details needed to produce it in the real world if they so choose.
By the same token, apparel companies opting for a digital-first approach are in a leading position to offer a novel way of embracing fashion, whereby customers are offered the chance to experiment with a wide variety of garments online – that is, in the metaverse – and place orders in such a way that designers are only creating real life pieces once they’re ordered instead of filling stores with stock that might never be sold.
Innovation and Creativity
In many ways, fashion is about anything and everything but the garments and accessories themselves. The industry is anchored on creative processes, self-expression freedom, personal enjoyment and the message our choices send to others around us. That being said, it’s still hard to challenge real world limitations to innovation as designers can’t exactly create pieces that defy gravity, fabric limitations or material durability, which put a finitude to the types of things that can be made. Well, that’s finally out of the window.
Creating fashion for the metaverse is injecting a breath of fresh air into the industry by liberating creators from all constraints. We’re already seeing garments being designed out of impractical or even impossible fabrics like liquid gold, water, fire or smoke. With such a unique blank canvas, the road for original and eccentric creations is wide open. Another way in which fashion brands are leveraging the metaverse is seeing iconic houses dusting off their archival designs and re-creating metaverse-only versions.
High Personalization
As part of the customer experience enabled by the metaverse and the technology that underpins it, the idea that we can now access fashion that is for us, as an individual, rather than for the masses is finally possible.
That’s because in the metaverse it’s possible to create “custom’ fashion apparel that can be personalized for each avatar, down to the smallest detail.
This individualization feature adds tremendous value in a market increasingly customer-centric and where many of us are looking for one-of-kind garments.
In addition to developing custom pieces, in the metaverse, each digital item is assigned a unique serial number, which further cements its status as a truly unique fashion piece.
Engagement
Having entered virtual spaces and embraced cutting technology, brands have started creating next-gen retail experiences, tapping into newer and more dynamic forms of engagement with consumers.
From digital retail spaces to fashion pieces, we are reaching an unprecedented moment where fashion is capable of undergoing constant updates so that the experience of buying a garment in the metaverse will be but static and dull.
According to recent data, of all the overall fashion retail sales worldwide, 21% are now done online, with the trend only expected to keep growing in that direction. As such, it’s relevant for fashion brands to keep pace with the times and meet the age- old adage of meeting consumers where they are. It’s becoming clear that virtual environments are where they are.
Accessibility
It’s no secret that if there’s an industry particularly hard to break into, fashion is certainly one. This doesn’t have to hold true in the metaverse. One of the key pillars behind the concept of virtual worlds and the upcoming web3 (thought of as the next generation of the internet) is decentralization. The role of intermediaries will be completely removed, lowering the barrier of entry significantly. Whether you’re an established fashion brand or an emerging designer, there will always be opportunities for you to showcase your work in a metaverse boutique store and share it freely across virtual worlds.
