fashion metaverse handbag the chainsaw

What’s Going On in the Metaverse Fashion Industry?

Disclaimer This article is for general information purposes only and isn’t intended to be financial product advice. You should always obtain your own independent advice before making any financial decisions. The Chainsaw and its contributors aren’t liable for any decisions based on this content.

There’s no denying that the pandemic forced more people to turn to online shopping over the past couple of years, with Digital Commerce 360 estimating that it contributed an extra US$218 billion to this market. 

And while digital retail does quite a good job as far as the sale of electronics, cosmetics and general household items go, it largely misses the mark when it comes to fashion. This is mostly because people still prefer trying on clothes before purchasing them.

That said, with the idea of the metaverse fast gaining traction, many experts believe that the aforementioned trend may soon change. However, before proceeding any further, it may be best to describe what the metaverse is. Simply put, the metaverse represents a future-ready iteration of the internet, offering elements of virtual and augmented reality (VR/AR) that are capable of delivering a highly immersive experience. 

While conservative estimates suggest that the metaverse market could reach US$426.9 billion by 2027, expanding at a healthy 42.6% year-on-year, others — such as one from multinational investment bank Citi — claim that this space could be valued at a staggering US$13 trillion by 2030.

Here’s why the metaverse is appealing to the fashion industry

Try before you buy, redefined

From the outside looking in, there are many reasons why the metaverse has started to gain so much ground within the realm of fashion retail. For starters, by using avatars – i.e. lifelike 3D approximations of a person — shoppers can go to ‘virtual dressing rooms’ and try out pretty much any number of items as they please. In fact, many companies have devised technological frameworks that allow users to see what different clothes will look like on them from any angle, under different environmental settings (such as low/bright lighting). 

For example, Reactive Reality, a virtual fitting room platform provider, has released an offering called PICTOFiT. It’s a virtual try-on solution for fashion brands and retailers who want to offer unique and scalable e-commerce and omnichannel experiences. The service has already been adopted by many mainstream entities, including HugoBoss, VictoryMax, Shopify, and Microsoft.

Another key advantage of the metaverse within the context of fashion retail is that it allows labels to access volumes of empirical data as and when their clients try on different clothes and apparel. This can allow them to assess which items are most popular with people with a specific body type. This enables them to tailor their recommendation algorithms much more efficiently as well as maximise their conversion rates.

Sourcing and traceability

By linking non-fungible tokens (NFTs) and other Web3 offerings to clothing items, it is possible to track the entire lifecycle of the product, from its sourcing to production to transportation, with the touch of a button. This can be especially useful for those buyers looking to purchase products that have been made using sustainable resources and ethically sourced labour. 

A unique use case of tracking and tracing the history of fashion can be found in a phygital (the merging of physical and digital) project by Ooli Shannon de Villèle. The metaverse fashion experiment is built around the concept of providing an additional opportunity for on-chain value creation through usage provenance beyond supply chain transparency and unique ownership: historical storytelling. 

Individuals can track the stories attached to clothing — creating records of clothing as artefacts that have the power to reinvent commerce. One can imagine tracking the story of a jacket worn by Elvis or the story behind a wine stain on a dress of Marilyn Monroe. 

In this regard, @Ooliverse, a fashion designer who is “fashioning a revolution for collective action”, is harnessing the power of various crypto-enabled technologies made by @m81_x0.

Minimising waste and overproduction

Ample data suggests that the metaverse enables retailers to minimise their cost overheads and generated waste — specifically those emanating from returns and excessive production — by a huge margin. To this point, studies have shown that by replacing physical samples of clothes with digital ones during the design and production phase, one can help reduce a fashion brand’s carbon footprint by an estimated 30 percent.  

Digital fashion is gaining traction globally

The idea of the metaverse merging with the fashion industry has gained so much ground recently that earlier this year, the world bore witness to the first-ever Metaverse Fashion Week. Hosted in the popular metaverse platform ‘Decentraland,’ attendees were allowed to try out clothes in an AR/VR setting and have them shipped to their physical addresses. Some labels that participated in the event included Tommy Hilfiger, DKNY and Dolce & Gabbana (D&G). 

Many more such events have either recently concluded or are slated to take place soon. For example, earlier this week, Jean Paul Gaultier’s protégé and rising star Victor Weinsanto unveiled a total of eight virtual designs for popular K-Pop girl group Lightsum. The entire collection has been released as digital wearables by Web3 outfit BNV (Brand New Vision) and will be made available in the form of NFTs. Owners will be provided with real-world perks such as access to exclusive shows and concerts by the band, personal greeting videos and previews from Weinsanto.

It is also worth noting that since the start of the year, a growing list of mainstream entities have continued to enter the Web3 arena, with Adidas, Nike, and Gucci reporting sales of NFT-based clothing items worth US$137.5 million. Similarly, D&G recently unveiled its digital ‘Glass Suit,’ for which it was able to fetch a staggering US$1 million. Furthermore, D&G’s highly popular NFT collection has been able to muster a cool US$6 million while Gucci’s Queen Bee Dionysus virtual bag recently sold for US$4,000, much more than the valuation of its physical counterpart. Finally, last year Louis Vuitton released a metaverse-styled gaming title that allowed players to collect 30 NFTs, each of them affording owners access to various exclusive events and private parties. 

Furthermore, Balenciaga also entered into a long-term partnership with Epic Games, the video game publisher behind the popular video game Fortnite. As part of the deal, Balenciaga will now sell high-fashion skins to players, which can later be resold across different marketplaces. Ralph Lauren has also come together with South Korean social media app Zepeto to release a virtual fashion collection for players. In addition, French fashion company Hermès filed a trademark application to protect its brand in relation to NFTs and the metaverse.

Gucci, Burberry and Louis Vuitton too have reportedly allocated sizeable sums of money to utilise metaverse-enabled technologies in an effort to expand their overall market reach and garner greater brand recognition. These developments come at a time when analysts for investment bank Morgan Stanley estimate that the digital fashion industry could rise up to a cumulative value of US$50 billion in the next 8 years. Similarly, market intelligence firm CB Insights sees the virtual fashion market becoming a US$3T industry in the mid-to-long term.

Is the End Nigh for Retail Stores?

While physical stores can allow users to try out garments in the flesh, they often get left behind when it comes to speed and convenience. This is because online shopping allows users to browse through and try out hundreds of items in a near-instant manner. 

However, with the introduction of technologies like the ‘magic mirror’, it is now possible for users to access the entire inventory of the retailer instantaneously. This can help bring the power of online shopping into the real world, allowing users to try out clothing items that may be out of stock or situated only in specific stores due to space and real estate constraints. 

What lies ahead?

Whether one likes it or not, the future of the fashion industry is undoubtedly going to be driven by elements of physical retail alongside various AR/VR-driven technologies. This can not only provide shoppers with a range of new experiences but also help the industry — widely considered to be extremely wasteful and polluting, contributing 10% of the world’s carbon emissions – become more sustainable. 

Therefore, as we head into a future driven by decentralised, Web3 platforms, it will be quite intriguing to see how the fashion industry continues to adapt to this new technological paradigm and evolve from here on out.