Metaverse & NFTs | The next big revolution in fashion
This article was originally written by Demi Karanikolaou in Greek for Harper’s Bazaar Greece. You can find it here.
Just up to fairly recently, humanity lived in what we called “real life”, our idea of a purely physical universe. However, the introduction of digital technologies and the internet caused a revolution that changed our lives forever. In 2021, video calls, online shopping and other digital experiences have become completely normalised. Technological innovation keeps progressing and shaking everything that we know, bringing one question to everyone’s mind: What is the next big thing? Digital AR sneakers. NFTs selling for millions. Digital couture. We can all feel it. The next Big Bang is coming and it has a name: the Metaverse. The Metaverse is defined as a digital space where users (or rather their avatars) will be able to experience a full new universe and feel fully embodied in it. Users will be able to walk around, experience things in 3D, interact with each other in real time and even sit down for a meeting in a virtual restaurant. Already, everyone who has tried Facebook’s Oculus Virtual Reality headset can agree that the experience feels like actually being present inside the virtual space of the game. According to Mark Zuckerberg, the idea behind a big Metaverse is that it would provide the same feeling of the internet, but this time a user will feel like they are inside of it, embodied, rather than just looking at a 2D screen. This new virtual world opens an extremely interesting conversation for the luxury industry. We are indeed heading towards a world where digital closets will be the next big thing for fashion and users will be able to own multiple digital pieces that they will wear on their avatars not only in games but via artificial and virtual reality. Platforms like Roblox and Fortnight have already started what is to become the next revolution.
This rapid development of digital innovation, Covid, the focus on online commerce and surge of cryptocurrencies, have pushed more companies to take risks and explore radically new ideas. Looking for people at their new meeting points, brands entered platforms like Twitch or Spotify. As the world is shifting into a future where humans will experience life in both real life and the Metaverse, digital goods will be of equal importance as physical. For now, big heritage luxury brands have already turned many heads by adopting NFTs (Non Fungible Tokens), the blockchain-backed digital assets that seem to be getting engraved into the future of our industry. NFTs represent a new type of unique asset, one that uses blockchain technology to showcase the ownership and history of different digital goods. Their uniqueness means that each one is distinguishable from any other token and their “value” is only set by market demand with no equivalent. It is this rarity,uniqueness and exclusivity that links NFTs with the luxury industry.. According to recent studies, younger affluent customers no longer purchase just to express their wealth. For people spending a big part of their lives online, new priorities have been set, including purely digital goods, limited edition products, sustainability and other knowledge related characteristics. The abundance of online replicated content has made rare products & symbols much more visible and accessible to the public, something that can also been solved by NFTs.
Having initially been viewed by the public as a quirky form of meta-art, NFTs are starting to prove their multiple capabilities and usages in the industry. Their unbreakable blockchain technology can store all information, allowing for online assets to have verifiable scarcity and ownership that cannot be manipulated. They are in fact already winning the attention of young high income individuals by being able to serve the new characteristics that they are seeking from luxury products. It is the same demographic that is also be driving the boom in the resale industry, which is expected to reach $84 billion by 2030. A big issue for online second hand luxury purchases has been the uncertainty of authenticity. Historically, sophisticated counterfeiters have copied real life luxury products with relative ease. However, NFTs cannot be manipulated or duplicated, which is why new impressive startups have spotted a big opportunity in them as the ultimate certificate of authenticity, pairing any physical product in the future with it’s digital twin to ensure it’s identity. This would not not only be advantageous to the brand and it’s the designers who could protect their creative ideas but also to the end consumer. As an example, not only would registered events in an NFTs blockchain prove correct maintenance of a luxury watch (making it 30% more expensive on the resale market) but NFTs would also provide more safety. Indeed, a customer could lock the physical watch in a safe at home while vacationing and still be able to wear the NFT version of their watch through augmented reality on social media or the metaverse. For brands, NFT blockchain could also send a percentage of every sale of their products through a third party reseller back to them.
However, seeing NFTs strictly as a digital twin to a real life item is taking away from the enormous possibilities and value they have by themselves as purely digital assets. “Our main mission is to help luxury brands transition into the metaverse” Olivier Moingeon of Exclusible told me over a video call interview. Exclusible, the first NFT marketplace specifically for luxury brands, that recently got an influx of 2.2 Million to kickstart their grand vision, seems to be aiming at perfecting the digital products themselves, focusing on the value of the digital good instead of viewing it as an add on. Olivier added: “Luxury Brands have long mastered the art of creating desirability. NFTs offer the opportunity to push the boundaries of creativity. The brands and designers who can create value and substance in a purely digital world, and develop meaningful connections with these communities, will have a strong head start in the nascent economy of the Metaverse. At Exclusible we help brands crack that code”
Luxury brand storytelling has notoriously been very delicate and opposed to change. This might need to change since the metaverse and the new trends of the industry, such as sustainability, personalization and gamification, are shifting our future. Using NFTs, companies can be as transparent as ever with their digital storytelling, informing customers of every step of an item’s lifecycle and it’s entire supply chain. Digital certificates can assure transparency and ethical trade as well as express a company’s modern progressive values. Personalization, the need of creating custom touches or entire products per customer can also be aided by NFT technology, since blockchain can keep reassuring the product’s uniqueness. The recently unveiled Genesi couture collection by Dolce & Gabbana is providing one of a kind Couture dresses with their digital NFT equivalent which not only reassures uniqueness but can also be worn by a digital avatar. Indeed the increasing importance of the metaverse and the gaming industry itself (set to reach $40bn by 2024) means that luxury brands are already experimenting with formats such as gamified e-shopping experiences (Eg: Kenzo), NFT digital goods that can be worn by game characters (eg: Burberry gaming skins) or luxury digital goods that can be worn digitally through avatars and AR filters.
In the area of brand communications and experience NFTs could help brands communicate with customers despite strict data protection and privacy regulations. Even if they can’t reach out to the actual customer, companies can always directly message the NFT piece itself and as a result “reach” the person who owns it. Bypassing any personal data, this practice can be extremely useful in the near future for brands that will finally be able to communicate with their audience and build not only their loyalty part of the funnel but also increase awareness and consideration, by creating more affordable versions of their luxury products strictly as NFTs, reaching younger demographics.
Between the steady rise of the metaverse and the many uses of digital goods in our daily lives, we can all feel that a big shift has started to happen. The customers of tomorrow expect a digital reality to be part of their normal life and are already comfortable with concepts that seemed unrealistic up to now. Recently, prominent closures of brands that were slow to evolve, keep reminding everyone of the grim estimations that up to 50 percent of today’s luxury brands will not survive into the next decade. We could not have a clearer indication that in order to survive the luxury industry needs to promptly prepare for the future ahead of time and face the new digital needs. Thankfully, in 2021 organisations can still benefit from an early adopter advantage. Venturing into new spaces or using new tools is always a big business decision and a risk. But it is exactly this ability to take risks and explore new territories that will separate the brands of tomorrow from those that will eventually become the past.
