Elite fashion brands continue to expand in the Metaverse

In my girlfriend’s world, people pay $500 for t-shirts and $2,500 for trench coats. She works at the headquarters of Burberry, the British luxury fashion brand. But for a few months now, the 166-year-old fashion house has been sending company-wide emails about a new kind of fashion line: web3 wearables.

Last August, Burberry released portable NFTs for a crypto video game called Blankos’ Block Party. The NFT Sharky B’s, sold with a jetpack, armbands and pool shoes, generated sales of approximately $375,000. Now brands like Gucci, Louis Vuitton, Nike and Adidas also want to dress this booming market.

With virtual goods generating about $110 billion in revenue in 2021 and Fortnite developer Epic Games making $50 million from a single set of skins, fashion companies are looking to get involved. Every brand wants to dress up the virtual inhabitants of the metaverse – who, even if the crypto market craters are, will be the next generation of customers for decades to come.

It’s only a matter of time before technology becomes mainstream, predicts Dani Loftusdigital fashion editor and member of RedDAO, a DAO that invests in fashion NFTs. “In the next five years you will wear digital fashion. On your in-game avatar, on zoom or on your social media,” she wrote in a Mirror post.

So what does this new fashion world look like? After talking to professors, founders, and Instagram influencers, I learned that brands compete for dominance in two key opportunities.

mainly online

The first is usually online NFTs (P-URLs) – think NFT characters like Bored Apes or Cool Cats wearing Gucci clothes in 2D NFT artwork, or digital skins for characters in blockchain video games – like Decentraland who see Metaverse Fashion Week in March, featuring brands such as Dolce & Gabbana, Tommy Hilfiger and Etro. It was completely virtual and hosted after parties, immersive experiences and, of course, shopping.

There’s a lot of money in this space – OpenSea, the NFT marketplace, rocketed to a valuation of $13.3 billion after a $300 million round of financing in January. With collections like Dolce & Gabbana bringing in the equivalent of $5.7 million in sales, metaverse fashion is in demand whether you realize it or not.

This explains why, in December 2021, Nike acquired RTFKT, a startup that ditched 3D sneakers as NFTs and has been partnering with CryptoPunks ever since. Cryptokicks, the first major collaboration between RTFKT and Nike, has a rock bottom price of 1.88 ETH.

“As fashion NFTs grow in popularity, it will be the norm in the future to launch pure NFT fashion collections independently of physical product launches,” Professor Vincent Quan of the Fashion Institute of Technology told The Defiant.

In March, Gucci released Grail Gucci 10KTFun Collecte NFT, which glues Gucci apparel to renowned NFT collections such as Bored Ape Yacht Club, World of Women, and Cryptoadz. The collection has a floor price of 0.8 ETH and a total traded volume of 3.5K ETH.

Real world experiences

The second possibility is called Primary In Real Life (P-IRL): where web3 interacts with the real world of fashion and merchandise.

Some major brands accept crypto in their physical stores. In April, LVMH-owned streetwear brand Off-White began accepting crypto payments at its flagship stores in Paris, Milan and London. Gucci has followed suit and will begin accepting crypto in some of its stores by the end of May.

Then there are tokenized websites that sell physical goods to certain customers. the Cryptoon Goonz NFT Collection launched a token store in December via Shopify – meaning the real clothes were only available to holders of the Cryptoon Goonz NFTs.

“We are seeing the emergence of a new class of brands that are using NFTs to unlock whole new trading experiences and build strong communities,” tweeted Robleh Jama, Shopify’s chief product officer. At South by Southwest, Shopify partnered with the NFT Doodles Collection host a coin-operated merchandise store IRL.

Origin

Other companies use NFTs to verify that, for example, the Louis Vuitton handbag you bought cheap on the street is legit. ORIGINE, a Swiss company that authenticates luxury goods with NFTs, has launched NFTs to authenticate luxury goods, such as watches. “Swiss watches keep up with the times, but the watch industry is always lagging behind,” mused ORIGYN board advisor Alexandre Friedmann from his office in Switzerland.

While the watch industry may be a moment behind, ORIGYN’s technology seems to be from the future. For ORIGYN partnership with watch marketplace Watchbox, it will send customers boxes of cameras that take high-definition photos of the watch. Because every watch – even within the same line – is unique due to imperfections, the data in each photo will be unique. “It’s like a fingerprint,” Friedman says.

While many watchmakers have relied on their history and reputation to drive sales, Friedman says they are now looking to the future. Watchmakers need to capture the younger crowd – which has been lost to smartwatches – and NFTs are one way to do that.

Metaverse Track Takeaways

The metaverse offers brands the opportunity to generate revenue streams through new products. But will consumers continue to buy only digital clothing during a recession, as the 2008-09 recession shaved 8-9% of the value of the luxury goods market?

My guess is on P-IRL routes, which offer consumers real clothes while holding crypto – since you can’t wear digital clothes outside, it’s easy to imagine a metaverse mode market disappearing when the wallet is pulled .

Still, high-end fashion is an old industry and probably not going anywhere anytime soon. No one ever needed a $2,000 Louis Vuitton handbag or a $500 t-shirt to get started, and digital outfits aren’t vital to your survival, either. But fashion—especially luxury—has always been for purposes other than survival, such as self-expression and status.

Laugh all you want, but I’ll be using crypto the next time I pass by the Gucci store – I might even buy my girlfriend a dress with my NFT winnings!

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