Can NFT Wearables Revolutionise the Fashion Industry?
Metaverse Fashion is already here, and it’s here to stay. With the first Metaverse Fashion Week behind us, fashion brands’ entry into Web 3.0 and their utilisation of NFT technology to create digital clothing seem to be the beginning of something bigger. The question is, can blockchain technology and the use of NFTs transform the fashion industry?
MVFW in Decentraland.
The first-ever Metaverse Fashion Week took place last month in Decentraland, a browser-based 3D virtual world that utilises the Ethereum blockchain. Selfridges kicked off the show by opening the simulated gates to its DCL store. The four-day event was filled with virtual runway shows, after-parties, and panel talks about the future of metaverse commerce. Shopping experiences included luxury names like D&G, Etro, Cavalli, Ellie Saab, and Tommy Hilfiger, in addition to digital brands like The Fabricant, Kid Super, and the now-infamous Fewocious.[1] I, a self-proclaimed noob, was also there, observing from a distance. There were moments of disbelief as I contemplated being in a digital fashion show surrounded by well-dressed stylish avatars, in my default Decentraland clothing that I got for free.
My first visit to Decentraland was last October. After I connected my wallet, Decentraland brought me to the avatar creation page where I had major flashbacks of playing The Sims on a desktop computer as a 10-year-old. Creating characters was always my favourite part. As I contemplated the clothing options I was given, a friendly reminder appeared that read, “Except for the default set of wearables you get when you start out, each wearable model has a limited supply. The latest ones can get to be super valuable. You can buy and sell them in the Marketplace.” I vaguely remembered reading about wearable NFTs and shrugged. Decentraland had given me enough free clothes to create a good outfit in a game. “Why would anyone spend money on fake outfits?” I mused.
Walking the red carpet at MVFW.
My opinion changed quickly. As I spent more time in Decentraland, running into people wearing the same clothes as I started to get on my nerves. I noticed what other people were wearing more, particularly if I found the outfit unique, and a social stratification started to emerge. I was regarding people wearing the default clothes as tourists (that, unfortunately, included me) and people with cool clothes as natives of Decentraland. If I were in a crowded space surrounded by well-dressed people, I felt out of place. A shift was happening in my perception. My digital avatar was becoming an extension of me, and I was developing an urge to use clothes as a form of self-expression, just like in real life!
It turns out I’m not alone, and this is a well-known phenomenon among gaming-savvy youth. In a Harrods magazine article, Cathy Hackl, a consultant and formal journalist specializing in augmented and virtual realities, says, for her children, “The way their avatar looks in games is just as important as how they look when they go to school.”[2] It’s no wonder luxury and fashion brands are entering the virtual world. Demand in Web 3.0 happens organically when one spends enough social time in the virtual space.
Selfridges at MVFW.
The fashion industry’s entry into the NFT world began last year in March 2021, when design studio RTFKT collaborated with Fewocious, an 18-year-old digital artist, to create a limited edition of 621 sneakers. Each digital sneaker was priced between $3,000 and $10,000 and the sale totalled $3.1M. Since then, luxury players like Gucci and Burberry entered the field by creating digital clothes for gaming avatars.[3] At the end of 2021, Nike acquired RTFKT with the hopes of serving “athletes and creators at the intersection of sport, creativity, gaming, and culture.”[4] Whether or not Nike will succeed remains to be seen, but some synergies between the fashion world and the promises of the metaverse are obvious. One of the ways the fashion industry can utilise NFT clothing is by matching real-life garments. Imagine what it would mean to get a digital version of a high-end coat for your avatar after purchasing the material version. As gaming aficionados and metaverse-curious enthusiasts become more aware of their outfits, this could be a great strategy to entice people who otherwise would not be interested in making a purchase from traditional fashion brands.
Another utilitarian function the blockchain technology provides in the space is combating counterfeiting of luxury goods, similar to the provenance benefits the technology proposes to the art world. Fake luxury goods account for 60-70% of the total global trade in counterfeit goods sold annually[5] and NFTs’ promise of recording ownership in a unidirectional way on the blockchain can simplify the process of differentiating between real garments and fakes.
Dolce & Gabbana’s first runway show at MVFW. Image courtesy of Martin Shibuya.
Perhaps the most exciting part about fashion NFTs is their ability to go beyond the physical. With no necessity to abide by physical rules, looks that could never exist in real life can come forward. I certainly got a glimpse of that during the virtual fashion week, with people flapping wings on their backs or having fire instead of hair, and a Dolce & Gabbana catwalk with cats walking the runway instead of models!
With this shift happening, two important reflections arise around digital fashion, the first being dematerialisation and sustainability. As digital fashion does not require a material counterpart, fashion’s relation to and dependency on the textile industry can transform. Companies like The Dematerialized and XR Couture were early to make this connection. XR Couture’s founder Subham Jain says the company’s journey started when he realized the unsustainable textile practices of the fashion industry. Combining his past love for gaming, his family’s textile background, and his architecture degree, Subham wanted to explore what 3D digital fashion could mean for the industry. XR Couture now enables brands and designers to enter the Metaverse and helps transform their collections into digital wearables. They also create digital outfits outside the blockchain technology, for people who want to use them in their photographs. Jain argues that this helps people use fashion as a form of self-expression while countering material waste resulting from fast fashion. But while dematerialisation promises more sustainable fashion practices relating to material use, long-term concerns around carbon emissions of the blockchain technology—which results from mining cryptocurrencies and minting NFTS—practices are still there.
The second is the tension between inclusivity and exclusivity that exists in the Metaverse. As the luxury fashion sector thrives on perceived scarcity, “NFTs’ scarcity and ability to accrue value can bring digital fashion closer to real fashion.”[6] Like Decentraland let me know when I was choosing my outfit, all NFT Wearables, except the default ones, have a limited supply and belong to a rarity hierarchy. At the top of the hierarchy is Unique Wearables, consisting of just one edition, then comes Mythic Wearables with 10 editions, and Legendary with 100 editions. These are followed by categories called Epic and Rare.[7]
Decentraland Docs, Wearable Editor User Guide.
While this creates a synergy between NFTs and luxury fashion, there is a big difference. The access to these editions, which have traditionally been elitist and exclusive in luxury spaces, are democratised in Web 3.0. In fact, the Metaverse Fashion Week’s tagline was “Everyone is a VIP in the Metaverse,” promoting access to traditionally exclusive parties and clothing made available to all in DCL. As an industry that thrives on exclusivity and the limiting of access, watching how luxury brands navigate this space will be intriguing.
Another point on inclusivity concerns the gender disparity that exists in crypto-related spaces. Currently, only 15% of bitcoin investors are women,[8] with that number increasing to 16% when it comes to NFT creators.[9] 77% of the money made from NFT sales goes to male creators.[10] A similar gender disparity seems to exist in the wearables space of Web 3.0. Wearables designer Maryana Ryumshin says that she quickly realised the lack of wearables designed for females when she entered the space at the end of 2021. She says what was available just a couple of months ago were either too expensive or not stylistically enticing. Upon realising this supply issue, Maryana decided to create a line of affordable elegant dresses for female avatars. Since then, the supply has caught up. Looking at the marketplace now reveals an abundance of creative options with a big range of prices. However, according to Maryana, demand is still an issue, and female clothes do not go as quickly as their male counterparts. When asked if this is because women are not interested in buying wearables or there simply aren’t enough females in Decentraland, she responds, “I don’t know.” Then she adds, “But it is obvious creating wearables is a long-term game.”
POV of a user in Decentraland on Rarible Street.
Taking these considerations into account, it seems the Decentraland Fashion space will be one that shifts quickly. The technology still has some catching up to do and the Fashion Week experience was by no means bug-free, but the city’s design is welcoming for beginners and easy to navigate, with neighbourhoods with specific focuses spread around the city–Sotheby’s has a space in Voltaire, a hip art neighbourhood near the Museum District. The Fashion Week revealed a new neighbourhood called Luxury District, where many stores are open for business in an open mall-like setting. Rarible Street is a common shopping destination with stores laid on both sides of the street.
A Morgan Stanley report foresees that 10% of revenue in the luxury goods market is likely to come from metaverse gaming and NFTs by 2030.[11] I agree with this possibility. In all honesty, since last year’s NFT boom, my internal dialogue has constantly shifted from, “Why would anyone do that?!” to “I want to learn more” to “I need that!” and the wearable NFT space is just another example. I saw a cool jacket in a virtual store the other day. Who knows, maybe I’ll go buy that and finally look like I belong.
Sources
[1]Lim, Jeremy. “Decentraland announces line-up for fashion week.” The Industry.Fashion, February 28, 2022.https://www.theindustry.fashion/decentraland-announces-lineup-for-metaverse-fashion-week/
[2] Artridge, John. “The Rise & Rise of the NFT.” Harrods Man, Autumn/Winter 2021.
[3] Artridge, John. “The Rise & Rise of the NFT.” Harrods Man, Autumn/Winter 2021.
[4] Nike, Inc. “Nike, Inc. Acquires RTFKT.” Press Release. Nike News, December 13, 2021. https://news.nike.com/news/nike-acquires-rtfkt
[5] Yang, Cindy, Kelly Bonner, Fiona Rodgers, and Michelle Ray-Jones. “Blockchain ad NFTs are smart, but can they revolutionize fashion?” The Fashion Law, January 13, 2022. https://www.thefashionlaw.com/blockchain-and-nfts-are-smart-but-can-they-revolutionize-fashion/
[6] Tong, Anna. “Luxury fashion brands poised to join the NFT Party.” Vogue Business, April 5, 2021. https://www.voguebusiness.com/technology/luxury-fashion-brands-poised-to-join-the-nft-party
[7] Decentraland Docs. “Wearable Editor User Guide.” https://docs.decentraland.org/decentraland/wearables-editor-user-guide/
[8] Gottsegen, Will. “The Bitcoin Trading Gender Disparity Is Still Massive: Study” Decrypt, February 2, 2021. https://decrypt.co/56811/bitcoin-trading-gender-women-study
[9] Kirimi, Arnold. “NFTs liberate the imagination: The gender gap needs to be addressed.” Coin Telegraph, March 16, 2022. https://cointelegraph.com/news/nfts-liberate-imagination-the-gender-gap-that-needs-to-be-addressed
[10]Gottsegen, Will. “At Least 77% of NFT Art Sales Going to Male Creators: Study” Coin Desk, Nov 11, 2021. https://www.coindesk.com/business/2021/11/10/at-least-77-of-nft-art-sales-going-to-male-creators-study/
[11] Goldstein, Steve. “Luxury in the metaverse? Morgan Stanley says it could become a €50 billion market.” Market Watch, November 16, 2021. marketwatch.com/story/luxury-in-the-metaverse-morgan-stanley-says-it-could-become-a-50-billion-market-11637058661
Zeynep Kecelioglu
Contributing Writer, MADE IN BED