From big tech boardrooms to podcasts and tweets, the Metaverse hype is everywhere. However, as with many new technologies, excitement about the anticipated future impact often outshines them indeed readiness for mainstream acceptance.
But even with all the fanfare, it’s foolish to dismiss Web3 and the metaverse outright. Within the next decade, new technologies could transform life as we know it. In the same way, television and the internet will transform the democratized access to information and entertainment, the blockchain and the metaverse will change the way we shop, play and shape our digital identities.
Whether physical or digital, fashion is a core layer of our being. It serves as one of the purest forms of self-expression while also functioning as a direct extension of our emotions and beliefs. As humans, we care deeply about our appearance, and as we spend more time in virtual environments, the same behavior is expected to continue. By 2030, Morgan Stanley estimates that the digital fashion market alone could be worth $50 billion.
While this forecast is ambitious and far from a guarantee, industry leaders have recognized the potential and are already starting to invest heavily in the trend:
With this in mind, there is a compelling case that the winners of this emerging sector could be solid investments for years to come. But before we even think about investing, it’s important to cover the basics of digital fashion.
What is digital fashion?
Digital fashion is 3D virtual clothing designed for both humans and digital avatars. Instead of fabrics and textiles, digital garments are created using special 3D computer programs such as Blender and CLO3D.
Compared to traditional clothing manufacturing, digital fashion is inexpensive and highly sustainable. More importantly, there are no creative limitations or production limitations. This is where the true beauty of digital fashion shines. The only limits are our imagination. We are not to need to be the same people online as in real life. We can be whoever we want.
Corresponding Jackson BridgesNFT Project Advisor and Showcase Guide at Alterrage, digital fashion enables a new medium for individual expression.
“In the Metaverse, we can determine our own identity in comparison to the physical world, where we cannot choose our own race, gender, or cultural background. Digital fashion builds on this idea by enhancing self-expression outside of the confines of the physical world and through the use of technologies such as augmented and virtual reality. The ability to express yourself with limitless creative freedom opens doors to a true expression of one’s identity,” he said in an interview with Kiplinger.
To date, digital fashion is most prevalent in gaming, where gamers pay billions of dollars a year to outfit their digital avatars with the latest cosmetic skins. Epic Games, the company behind Fortnite, sold 3.3 million units of its NFL partnership skins, raking in a whopping $50 million in just a few weeks.
How to wear digital clothing and accessories in the physical world?
Outside of gaming, digital clothing is the most practical way for shoppers to showcase their digital style. By changing photos and using advanced technologies like augmented reality and artificial intelligence, consumers can actually do this wear their digital garments.
For digital native clothing retailers like DRESSX, digital clothing is built into their business model. Customers who purchase digital garments from DressX can upload a photo to the platform to be digitally dressed in their new look. For social media influencers, who often spend thousands of dollars on an outfit only to return it shortly after a photo is taken, wearing digital fashion offers a much more efficient and cost-effective alternative.
Snapchat (SNAP), a leading provider of augmented reality technology, has offered a variety of AR filters since its inception. Snap has also partnered with companies like Prada and Ulta (ULTA) to offer customers virtual try-on experiences that have resulted in significant increases in sales.
To encourage more retailers to adopt AR-powered e-commerce, Snapchat has made its proprietary technology free to use. Now retailers can seamlessly integrate Snap’s AR fitting technology and Camera Kit into their own mobile apps and websites.
Why is digital fashion important?
To fully appreciate the importance of digital fashion, you must first understand the desire for digital identity and ownership. Among the digitally native generations, there is a strong demand for digital property and the ability to express our identity as we do in real life.
Based on a report by BoF Insights, approximately 70% of US general consumers (Gen Z through Gen X) rate their digital identity as important. And they’re voting with their wallets, with 50% interested in buying a digital asset (gaming skin, digital fashion, avatar, and/or NFT) in the next 12 months.
While it’s still incredibly early days, digital fashion is positioned to be a significant revenue driver for apparel retailers. Over the last year, brands like Gucci, Tommy Hilfiger, and Dolce & Gabbana have invested millions of dollars opening Metaverse virtual stores, where they have sold a mix of digital fashion NFTs and NFTs redeemable for physical goods. The virtual stores also allow customers to shop from the e-commerce collections on-site.
As explained by Nico Faraa Web3 retail strategist and founder of Chief Metaverse Officer, virtual stores in the Metaverse are not replacing traditional retail channels, but instead serve as a much-needed complement.
“Just as retailers need a physical or e-commerce store (Web 1.0) and a social media page (Web 2.0), they should have a Metaverse presence (Web 3.0). Virtual stores in the Metaverse are more efficient, immersive and accessible than any other retail experience.”
Like all new tech trends, there will be companies investing in the hype for PR and a quick buck. But there will be others who will make digital fashion a central part of their future retail strategy. Whether the winners will be legacy fashion and tech companies, digitally native retailers, or a combination of both, only time will tell. But when industry players of this caliber are all taking action, it’s generally worth paying attention to.
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