Fashion's Foray Into Metaverse Entering the Metaverse does not require a rule of thumb. There are multiple ways of entering space, such as launching NFTs, time capsules, establishing a virtual space, and releasing skins and apparel for users
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Is the world of luxury brands and fashion dying out? No, it is just the beginning of a new medium for domination. And the seed of this beginning was sown back in March 2019. Iridescence, the world's first Non-Fungible Tokens (NFT) couture piece, was a brainchild of Dapper Labs, The Fabricant, and Johanna Jaskowska, which went on to fetch US$9,500 at its auction. What you read is just a small drop in an ocean called the metaverse. The metaverse is defined as an embodied internet experience.
FIRST MOVER ADVANTAGE
Fashion brands and retail stores have acknowledged that entering the Web3 and metaverse is the most viable move for the industry, financially and non-financially. Interestingly, lux brands have taken a step towards grabbing the first-movers advantage in the space with players like Nike, Balenciaga, Jimmy Choo, Dolce & Gabbana, Gucci, Louis, Nike, adidas, Prada, Balenciaga, Tommy Hilfiger, and Ralph Lauren entering the metaverse. The metaverse is made up of several technologies and elements, two of them being NFTs and virtual stores. Non- Fungible Tokens are digital assets with unique identifiers which are used to certify and authenticate ownership. In simple terms, building an NFT makes the creator the sole recipient of earnings unless and until sold. Furthermore, NFT-based transactions reduce fraud and make it easy to trade. NFTs can be in any format, but most notable ones are music, art, sports, and fashion. Users, by purchasing apparel, will be able to style their avatars as per their liking. And this is the biggest reason as to why fashion NFTs and fashion-verse will boom in the coming time.
By market type, fashion NFTs might be smaller as compared to music, art, and sports, but they are rapidly gaining momentum. Dolce & Gabbana's digital auction of the nine-piece Collezione Genesi, went on to become the most expensive fashion NFT to be sold for a glamorous $5.65 million at the time of purchase.
Adidas joined The Sandbox and has created its own platform, AdiVerse along with launching its NFT collection in December 2021. Gucci also joined The Sandbox to create its own experience, 'Gucci Vault Land', for its users to get a peek into its history through games and NFTs. Fast fashion brand Zara has also dipped its toes in the metaverse by launching its phygital collection Y2C Creatures and single collection Lime Glam on Zepeto. As per Dune Analytics, Nike ranks first with the most NFT revenue, valued at $185 million. On the web3.0, fashion brands have been reported to fetch higher prices than its physical counterparts. Gucci, through the gaming platform Roblox, sold a virtual Gucci Dionysus bag for around $4,115, while its physical version would cost around $3,400. In 2022, the global metaverse market was valued at $100.27 billion, a jump from a valuation of $63.83 billion in 2021.
Talking about the Indian landscape, Manish Malhotra became the first couturier to enter the game with his five-piece NFT clothing line headlined by Illuminous Showstopper which was sold at INR 2.8 lakh. Joining the list are Anamika Khanna and Raghavendra Rathore.
In 2021, Rathore, in association with FDCI x Lakme Fashion Week, launched his fourpiece NFTs pertaining to his work and brand. With this, he became the first Indian designer to raise charity funds through NFTs. "Having studied robotics, NFTs and the metaverse seems like a natural extension for the brand. NFTs open a new world of consumers to brands, and may change the way we look at fashion by giving access to consumers to retain lifetime ownership of traceable, authenticated assets, and a secondary market for creators and consumers, uncommon in the luxury and fashion industry," says Rathore. One of the most promising areas of fashion NFTs are virtual stores and verses.
Papa Don't Preach by Shubhika became the first Indian label to display its clothing collection and accessories on a Metaverse platform as a part of the World Economic Forum's 'Cohesive and Sustainable World in the Digital Era' theme. "It allows me to express and use materials, things, shapes, and forms that I can't really use in reality unless I have an order. And I can invest that kind of money in 3D printing it or doing something like that." Shubhika Sharma, Founder, Papa Don't Preach.
Recently, French clothing brand Lacoste unveiled its first-ever virtual store in association with Emperia. The list includes the likes of Burberry, Ralph Lauren, and Tommy Hilfiger. In October 2022, Flipkart launched its own verse, the Flipverse, where the platform will provide users with a virtual shopping experience. Not behind, rival Amazon also provided a gamification experience for its users under its #AmazonMetaWorld.
There are several players in the market which are building and providing established and startup companies to launch metaverse experiences related to its brand. Trace Network Labs is one such key player in the Indian market. It aims at conducting events, setting up lounges, creating shopping and social districts, to enable the creation and minting of Metaverse Experiences along with integration of web3.0 wallets. "This new approach to retail shopping opens the door to new markets, product lines and business models and can contribute to better, long-term investments. Not to mention, this experience provides an immersive customer experience that increases customer loyalty, revenue, and overall global market impact," shared Lokesh Rao, co-founder and CEO, Trace Network Labs.
Investment bank Morgan Stanley predicts that digital fashion could help the industry's sales to jump by $50 billion by 2030. SkyQuest Technology estimates the NFT market to reach $122.43 billion by 2028 whereas Verified Market Research looks at $239 billion by 2030. As we move towards a more sustainable approach and lifestyle, we realize fashion pieces are one of the biggest polluters in the world. By going digital and virtual, brands will be able to clock in bigger margins on its products, would not be wounded in low-wage controversies, and would let go of warehouse and storage expenses.
Entering the Metaverse is one way of keeping the legacy alive for brands along with making a shift to a sustainable strategy. As we move towards a more sustainable approach and lifestyle, we realize fashion pieces are one of the biggest polluters in the world. The infamous 'duty drawback' law makes several lux brands burn its unsold merchandise. Burberry single-handedly destroyed $37 million worth of products in 2018. By going digital and virtual, brands will be able to clock in bigger margins on its products, would not be wounded in low-wage controversies, and would let go of warehouse and storage expenses.