FEATURE
METAVERSE
HOW THE FASHION INDUSTRY CAN GET INTO A METAVERSE MINDSET
By McKinsey & Company
Shoppers , particularly those in Gen Z , are spending more time online and exploring the possibilities of the metaverse . Here ’ s what fashion and luxury players need to know about this emerging frontier .
There ’ s a lot of buzz surrounding the metaverse – which could be loosely defined as hyper-interactive , creative digital environments where people work , play , socialize , and shop . While the metaverse itself remains in its infancy , there ’ s plenty of interest in its potential . For brands , and for the broader fashion industry , it could well offer new opportunities to engage Gen Z and other tech-savvy , young consumers .
What do they need to know to tap in ? And what role will nonfungible tokens ( NFTs ), gaming , and virtual fashion play in the future of shopping ?
These questions are the focus of one chapter from The State of Fashion 2022 , the latest industry report from McKinsey , in partnership with the Business of Fashion ( BoF ).
Key findings :
Interactive , creative digital spaces are a natural evolution of how people use technology , and they reflect the ever-growing amount of time consumers spend online . Gen Z spent an average of eight hours per day on screens in 2020 .
Personal expression is important to Gen Z , and fashion is one of the top three categories on which Zers seek to splurge or treat themselves . Does that carry over into the digital realm ?
It could . “ There are more and more ‘ second worlds ’ where you can express yourself ,” says Gucci chief marketing officer Robert Triefus . “[ But ] there is probably an underestimation of the value being attached to individuals who want to express themselves in a virtual world with a virtual product , [ through ] a virtual persona .”
His company made forays into the space with its Gucci Garden in Roblox gaming metaverse – and saw 19 million visitors to it . Other fashion players are eyeing the $ 176 billion gaming industry , which attracts more than three billion players globally each year , especially given the appeal of engaging with and building communities in games and other virtual worlds .
Indeed , gaming is increasingly an extension of the real world , and with the pandemic supercharging participation , it has become a prime target for fashion brands . Ralph Lauren , for instance , partnered with South Korean social network app Zepeto to create a virtual fashion collection where users could dress their avatars in exclusive products or appearance-altering “ skins ”.
For some consumers , digital fashion is a natural extension of applying social media filters on platforms such as Instagram and Snapchat , says Simon Windsor , cofounder and joint managing director at Dimension Studio , an agency that worked with Balenciaga on its video game . “ We ’ re just at the tipping point of this new era … . it starts to change the meaning of fashion itself .”
Artificial intelligence and augmented reality could open up opportunities for new business models that leverage virtual fashion . Technology that allows for 360-degree views has already been used to present seasonal collections through online showrooms , and avatars of models have walked 3-D virtual runways .
Nonfungible tokens , or NFTs , are one aspect of virtual environments that have seen an explosion of interest . NFTs are unique crypto assets whose authenticity and ownership are verified on blockchains and are bought , sold , and exchanged in the metaverse , often with cryptocurrency . In 2021 , an NFT created by digital artist Mike Winkelmann – also known as Beeple- was sold at Christie ’ s auction house for a record-breaking $ 69.3 million .
Proponents argue that NFTs are potentially revolutionary : “ This is fundamentally going to change digital ownership , creative structures , the creative economy , how we view money even ,” said Karinna Nobbs , co-chief executive and chief experience officer of NFT marketplace The Dematerialised . “ This is bigger than the internet .”
For the fashion world , NFTs can be used to authenticate products or serve as collectible pieces in their own right . And in the past year , there was a wave of engagement , particularly among luxury players and via the gaming universe . Louis Vuitton launched a video game with collectible NFTs , partially designed by Beeple , for its 200th anniversary .
With no shortage of marketing hype , there are indications that digital fashion assets can generate significant revenue streams . Still , monetization opportunities are likely to be contingent on the psychology of scarcity and limited editions driving NFT mania – together with the security of authentication and the potential for community building that they provide .
There ’ s also a reason to exercise caution , with an eye to the environmental impact of the blockchain technologies that underlie NFTs , as well as cybersecurity concerns . For instance , a cyberattack on the artist Banksy ’ s website caused a collector to pay upward of $ 330,000 for a counterfeit NFT .
At a minimum , fashion ’ s foray into the metaverse suggests promising new routes for consumer engagement . And while no one can predict exactly how this rapidly growing digital universe will shape up , the opportunities it presents are exciting – for luxury brands , retailers , and consumers themselves .
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