Who would have thought that the first e-mail sent over the Internet would soon become a full-fledged universe where people could freely interact with each other? The evolution of the Internet, from Web 1.0, consists of static websites and personal sites with very little user interaction or content generation. Then came Web 2.0, commonly referred to as the “Social Web”. User-generated content surged and a community of internet users was born. Social media reigns supreme in the internet age.
Our society is on the verge of a new beginning, Web 3.0, where an entirely new world is being created. Tech folks call it the Metaverse, and its emergence even prompted Facebook to change its name to “Meta.” There are good points for brands to join the web because they can connect with a giant pool of people. Fashion brands, however, have not been receptive to this idea of selling their products online, as it can be seen as undermining their brand.
While it is in the brand’s interest to protect its prestige, what these brands lose is another avenue of profit. At the height of the pandemic, luxury brands closed physical stores, which essentially cut off any brand’s profit flow. For brands that have dedicated resources to creating a user-friendly website where customers can easily complete their purchase, this has certainly helped cushion the impact of closed stores.
Invest in the virtual world
Fashion brands are investing in the virtual world, realizing the importance of staying one step ahead and not wanting to lose first mover advantage. The recently concluded Metaverse Fashion Week, hosted on browser-based platform Decentraland, is evidence of increased interest in digital apparel. According to a Nasdaq report, it cites Morgan Stanley sources estimating that the virtual fashion market will be valued at US$55 billion by 2030. It’s proving to be a lucrative business that can reap long-term profits. as society becomes more entrenched in the metaverse.
The Metaverse is a whole new universe waiting to be explored; its potential is enormous. Just like in the real world we would need clothes, our realistic avatars also need clothes when traversing cyberspace. Digital fashion is not a new concept as it has already appeared in the gaming world as “skins”. But taking the idea to the next level are the luxury fashion brands, which Balenciaga embodies. The Paris-based fashion house has teamed up with video game giant Quinzaine to create dresses for users’ online characters.
In addition to creating clothes online that users can wear virtually, fashion brands are building their worlds within the metaverse. Luxury fashion brands like Gucci and Louis Vuitton have already started expanding their reach into the online world. The former held a virtual exhibition in the online game Roblox to mark its centenary. Players can explore the universe designed by Alessandro Michele of Gucci, such as his signature designs for the brand, and also purchase rare collectibles. At Louis Vuitton, the brand celebrated its 200th anniversary with a mobile game that lets users hunt hidden NFTs by artist Beeple.
Creating a brand universe will support creative brand strategies, enable immersive consumer experiences and generate excitement among highly sought-after consumer groups. Another critical point to note is the creative freedom that brands (especially designers) can achieve is the erasure of the constraints of the physical world. It is said to be less disruptive to the environment and to help conserve our limited natural resources. Additionally, brands do not have to deal with supply chain issues.
Luxury fashion brands must seize the opportunity
According to Caroline Rush, CEO of the British Fashion Council, she said in an interview with Forbes that around 10-15% of our wardrobes could go digital in the future. This growing market will see even more competitors as our lives become more integrated into the virtual world. The youngest cohort in the world are digital natives who are comfortable spending real money on items that only exist in the digital realm. This group of consumers will constitute an important part of the market in the coming years.
In a special report from fashion company and McKinsey, State of Fashion 2022, the publication highlighted what fashion brands need to do to succeed in this highly competitive field. “Brands will need a strategic mindset and a willingness to develop partnerships and leverage a variety of talents to deliver high-quality content, either internally or through collaborations with third parties. In an arena characterized by high hype, it will pay to seek out business cases that generate excitement but stay on brand.”
“Doing this may require adopting a new focus on ROI, focusing on less measurable benefits such as brand awareness and marketing impact, as well as goal setting. flexibility calibrated to potential, rather than focusing exclusively on the bottom line. Flexibility will be essential and brands should remain cautious in deploying their capital. However, risks should not deter them from engaging in this universe. growing digital.
For now, the sky is the limit for fashion brands interested in the metaverse, and as mentioned earlier, the world will only become more integrated with the online universe. This means that demand for virtual fashion is here to stay, but currently brands should also be cautious as they venture into the metaverse at this nascent stage.
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