Metaverse: Future of Fashion?

By: Reagan Dunnam & B. Ellie Jin

The metaverse and NFTs are subjects that are dominating social and economic spheres right now, and the vision for the future weaves these developments together with industry. The metaverse is a digital society that binds the physical landscape with virtual or augmented reality. It is referred to as “the next version of the internet” and allows users to participate as “avatars” in games or experiences such as concerts, shopping, or socializing (Debter, 2021). The metaverse is cited as bringing work, play, shopping, and experiences into one online, virtual society with its own economy consisting of cryptocurrency and NFTs. However, it is still in its earliest stages. The end goal is one wholly unified metaverse that brings together everyone in the world to a digital society. Right now, there are a few platforms that have aspects of the metaverse. Roblox and Fortnite are two huge players in the development of the metaverse; these metaverse-type gaming platforms allow users to participate as avatars, controlling their character to build worlds, play games, interact, and experience activities such as concerts or shopping.

NFTs, or non-fungible tokens, are virtual pieces of property or images that are embedded on blockchain, which provides details of authenticity and ownership. These digital assets can be pieces of art, decorations or apparel for avatars, or digital renderings of physical products, such as Rebecca Minkoff’s NFTs of pieces from her fashion shows. They can only be accessed in the metaverse, since they are not physical products, but they can be bought and sold further after the initial purchase. How will this developing technology and growing phenomenon impact the fashion and apparel industry?

With the shift of consumer purchases to a more experiential economy, metaverse shopping could be a profitable replacement for traditional brick and mortar stores. The target consumers for companies aiming for the metaverse are primarily in Generation Z. This age segment spends the most time in virtual spaces, such as social media and metaverse-leaning games. Additionally, the increasingly popular and accessible virtual reality capabilities will provide the space for this generation to participate in virtual fashion ventures. According to McKinsey & Company, members of this generation “spent an average of eight hours per day on screens in 2020” (BoF Team, & McKinsey & Company, 2021). This number is increasing, especially due to the COVID-19 pandemic that has led to a growing number of the community remaining in their homes. The pandemic, coupled with the screen time of Generation Z, provides the perfect opportunity for a virtual marketplace filled with fashion and NFTs.

With social distancing reducing the amount of in-person interactions, the need to express oneself is ever-present. While most consumers are adopting the “athleisure” trend while in quarantine, working remotely, or attending school online, virtual fashion provides the creative outlet that has become an inherent need of human expression. 

The gaming industry already boasts over three billion international players and is valued at $176 billion. This contributes to the understanding that this already-profitable industry can be made even more lucrative through fashion in the form of virtual shows, products, or NFTs.

Many luxury brands, such as Ralph Lauren, Gucci, and Balenciaga, are already testing the waters of this potential market which begs the question: will the presence of primarily luxury brands be a barrier to entry for smaller brands, thus blocking the variety and options that users in the metaverse have to choose? Furthermore, while some products bring in thousands, or even millions, others are priced much lower. Will the presence of luxury brands in this platform at more affordable prices cheapen the real-world products?

Ralph Lauren’s entry into the metaverse has involved the brand in many virtual or augmented reality applications, such as Bitmoji avatar outfits and e-sport clothing. Roblox is a huge metaverse-type game right now, and Ralph Lauren jumped on the opportunity to participate. The brand opened virtual stores in the Roblox universe and sells virtual avatar clothing pieces at less than $5. Balenciaga is participating in Fortnite, another game that provides users with “skins” for their avatars. The Balenciaga skins alter the avatar’s looks and are sold for about $8. These brands are looking to attract the new generation of consumers that spend almost as much time in the digital world as the physical world (Debter, 2021).

In terms of environmental impact, what can brands do to offset the energy consumption that occurs to fuel creation of digital assets, trading, and the perpetuity of the metaverse? If the metaverse is truly to become a unified, digital society in the future, who makes the laws? What will be done to increase cybersecurity in terms of both the consumer’s monetary security and the manufacturers’ fight against counterfeit virtual products? 

We are still a ways away from a wholly unified metaverse; the implications for industry are simply going to have to be discovered through experimentation. However, online trading resources and metaverse-type games, such as Roblox or Fortnite, are working to lay the groundwork for the navigation of this digital society.

Sources Cited

BoF Team, & McKinsey & Company. (2021, December 20). The Year Ahead: Building Brands with a metaverse state of mind. The Business of Fashion. Retrieved January 25, 2022, from https://www.businessoffashion.com/articles/technology/the-state-of-fashion-2022-bof-mckinsey-metaverse-virtual-nft-gaming/ 

Debter, L. (2022, January 4). Fashion and the metaverse: Why Ralph Lauren wants to sell you digital clothing. Forbes. Retrieved February 3, 2022, from https://www.forbes.com/sites/laurendebter/2021/12/25/fashion-and-the-metaverse-why-ralph-lauren-wants-to-sell-you-digital-clothing/?sh=63ab2611be89