How The Metaverse & NFTs Are Changing Fashion
It’s the next frontier.
Fashion has always been an industry obsessed with what’s new and what’s next — and in 2022, it’s nearly impossible to talk about the future without the words “metaverse” and “NFTs” entering the chat.
Within the past year, Gucci and Ralph Lauren have drawn millions of visitors to their virtual pop-ups. Adidas and Burberry have launched sellout collections of non-fungible tokens, or NFTs — digital assets coded to enable unique ownership. And on March 24, the virtual world Decentraland will host the inaugural Metaverse Fashion Week, a four-day event featuring digital fashion shows, retail installations, a pop-up museum, and other virtual experiences.
Brands, retailers, and celebrities are all scrambling to stake their claim on the next frontier of the digital world, but so far, it’s not entirely clear how the average person should think about the evolving space. Are digital wardrobes the way of the future? Why buy NFT sneakers over the real thing? Which metaverse projects are worth your attention, and which are just marketing gimmicks?
To begin answering these questions, it helps to understand that the metaverse isn’t a single place; it encompasses the spaces where digital, physical, and augmented realities converge, and it is still very much a work in progress. Much like the internet or social media, there’s no doubt it will look very different five or 10 or 20 years from now. Even in its early stages, though, it’s a lucrative prospect: Global revenues in the metaverse could reach $800 billion by 2024, according to Bloomberg Intelligence.
Virtual worlds like Roblox — where in December, Ralph Lauren hosted a holiday-themed experience complete with a snowy alpine backdrop, in-game ice skating, and a collection of exclusive pieces fans could purchase for their avatars with the in-game currency Robux — are part of the metaverse, giving users digital spaces to socialize, play, form communities, create their own games, and participate in growing economies.
Developer-controlled online multiplayer games like Fortnite are another. With tens of millions of tech-savvy young people — many of them already accustomed to spending real money on digital goods — logging in to play every day, these games are popular entry points for brands looking for a way into the metaverse.
On Fortnite last fall, players could visit a pop-up Balenciaga store and buy skins (outfits for their virtual avatars) for less than $10 each, or else shop the collab IRL for many hundreds of dollars more. When Burberry launched its first NFT collection last August, it did so in collaboration with Blankos Block Party, a blockchain-based game in which users create and play as unique collectible toys. The drop sold out in 30 seconds, with fans snapping up limited-edition Burberry-branded characters ($300 apiece) and monogrammed accessories like armbands ($25), jetpacks ($100), and pool slides ($50).
In some senses, drops like these are similar to real-life limited-edition releases, attracting buyers who want to wear and show off their exclusive pieces, along with others who are in it for some expected future resale value. The speculative potential of NFTs is a major draw, attracting new would-be investors with every headline about a celebrity spending hundreds of thousands of dollars on a JPEG of a cartoon ape. Of course, the vast majority of NFTs won’t see their resale values jump by 2,000 percent in less than a year (or ever, for that matter), but the possibility is tantalizing.
So are brands just mirroring their physical strategies in the digital world? Not exactly.
“The metaverse opportunity for fashion doesn’t have to center on digital doubles of products,” says Kathryn Bishop, foresight editor at strategic foresight consultancy The Future Laboratory, which recently released a Meta-tainment Futures report exploring brand strategy in the metaverse. “Brands can also create community spaces inside metaverse realms. These are virtual hubs where fans and followers can meet, interact, and perhaps unlock brand benefits like discount codes that can only be redeemed in-store.”
This, of course, could help drive foot traffic to brick-and-mortar shops, where most fashion brands still make the bulk of their revenue.
The metaverse also provides a new space for shoppers to interact with brands and connect with other fans. Last month, Gucci announced that it was developing an experimental virtual space within the gaming ecosystem The Sandbox, a rapidly growing platform that has also attracted partnerships with Snoop Dogg and K-pop talent incubator Cube Entertainment. Gucci spread the word via the brand’s server on Discord, the go-to messaging platform for all things NFT- and metaverse-related. Unlike public, polished Instagram feeds, these servers tend to be open to only in-the-know fans (in some cases, only those who have purchased NFTs) and facilitate peer-to-peer communication and community-building.
Beyond the social opportunities presented by the metaverse, it also opens up opportunities for a new generation of creators. Last spring, the digital design studio RTFKT tapped an 18-year-old artist known as FEWOCiOUS to create a limited run of virtual sneakers, which fans could “try on” via Snapchat’s augmented reality tools. All 600 pairs sold out in seven minutes, netting the equivalent of $3.1 million in cryptocurrency sales. While the NFTs were also tied to physical shoes, the virtual goods were the real draw, capturing the attention of Nike, which acquired RTFKT in December with the aim of building on the startup’s dedicated community and expanding its own digital footprint.
The Fabricant, a digital fashion house founded in 2018 (making it part of the old guard in a very nascent industry), is also now parlaying its early experience working with brands like Adidas, Tommy Hilfiger, and Buffalo London into a new venture. The Fabricant Studio offers invitees the chance to create and mint one-of-a-kind digital garments by selecting custom textures, colors, and trims to apply to otherworldly creator-made designs.
The co-creation model “recognizes the need for collective participation — because we'll need billions of garments in the metaverse,” says Michaela Larosse, head of content and strategy at The Fabricant. “Depending on the environment that you are participating in, you'll have a different look.” While you might break out a gravity-defying dress for a fashion show, for example, you may also want a more sober look for your avatar to wear to a business meeting. Few such meetings are taking place today, but many futurists and venture capitalists envision a day within the next decade or so when designers will collaborate on 3-D products in virtual studios, job training will be done via virtual reality, and conferences will be held in the metaverse rather than convention centers.
While the idea of creating (“minting” in NFT-speak) billions of garments may raise eyebrows for those who are familiar with the environmental impact of certain blockchains, creating a more sustainable future for the fashion industry has been one of the goals of The Fabricant since its inception. So, although the company relies on blockchain technology to validate ownership of the pieces created on its platform, it avoids the energy-intensive system underlying Bitcoin in favor of Flow’s Proof-Of-Stake blockchain. With this alternative model, minting an NFT uses less energy than a Google search, according to Deloitte Canada research.
Larosse acknowledges, though, that there are other barriers still standing in the way of digital fashion’s ultimate potential. For one, in order for people to get full use out of their virtual garments, metaverse platforms will have to become less walled-off, so a piece that’s purchased on Decentraland can also be worn in Roblox or via AR filters.
“Utility is key, because the promise of fashion is that you want to be able to wear the pieces,” she says. “The issue right now for everybody that's creating digital items for metaverse environments is this question of interoperability.”
For now, pieces from the Fabricant’s first season are compatible with The Sandbox and AR filters, as well as Darewise's game Life Beyond. Several will walk the runway later this month as part of Metaverse Fashion Week, whose lineup also includes established IRL brands like Tommy Hilfiger, Paco Rabanne, Dundas, and Cavalli, as well as high-fashion digital natives like DressX and Auroboros.
Along with virtual catwalk shows in fantastical settings and luxury shopping salons, the event will give brands and retailers a chance to interact with audiences in an immersive environment and see which of their strategies resonate in the metaverse.
“Certainly, opportunities exist to experiment, and such digital spaces can allow brands to test or trial new product ideas, designs, or collaborations before bringing them to fruition in real life — possibly a way to cut down on waste or be more sustainable in terms of R&D,” says Bishop.
Virtual worlds also have the potential to democratize access to events so people from around the world can attend and engage. Anyone can log in to Decentraland to explore and participate in MVFW, but users need to link their cryptocurrency wallet to their account in order to make any purchases. The platform already hosts digital sneaker launch parties, wearables sales, and art exhibitions alongside live performances and premieres, but a multi-day fashion extravaganza will no doubt draw a new crowd.
As it stands today, many of the most successful fashion-related NFT and metaverse launches have been geared toward the streetwear and sneaker communities. These customers have become early adopters, says Marian Park, youth strategist at the trend forecasting company WGSN, because “they are already immersed in real-life drop culture and are often gamers, both [of which are] areas of opportunity in this first wave of the meta economy.”
Eventually, though, experts expect the metaverse will become a much more central part of mainstream culture, so digital wardrobes will have to reach an audience far beyond crypto enthusiasts, celebrity NFT promoters, and hard-core gamers.
Those consumers are already out there — though if you’re wondering who they are, chances are you’re not part of (or parent to) the biggest demographic. On Roblox, for example, 49.5 million people log on daily, 67% of whom are age 16 or under. Two-thirds of U.S. 9-to-12-year-olds are on the platform, many of them spending their real allowances (converted into Robux, the in-game currency) on virtual jackets, T-shirts, and jeans for their avatars. Thanks to a newly launched Forever 21 venture, Roblox users can even set up their own stores complete with custom interiors, merchandising, and staffing — making them not just consumers, but industry players in training.
So even if some (or most) of fashion’s metaverse and NFT initiatives don’t pan out as long-term strategies, the potential for success means the headlines will likely keep coming.
As for the naysayers, the digital fashion world isn’t losing much sleep.
At The Fabricant, “We've always been in the position of people being skeptical about what we do. Since day one, people have told us garments can’t possibly exist non-physically,” says Larosse. “We can only be authentic and passionate about what we do. And people can either choose to participate or not.”