Shoppers, especially members of Generation Z, are increasingly venturing into the Metaverse in search of the next “thing.” What lessons do the luxury goods sector and the fashion industry need to learn about the latest frontier?
The Metaverse, often known as the “virtual communities that include places to work, play, meet people, and shop in one cohesive experience” is the subject of much discussion and speculation. Even though the real Metaverse is still young, many people are intrigued by the possibilities it may one day provide. Brands and the greater fashion industry may find new ways to connect with millennials and Gen Zers who are skilled with technology.
How much prodding is needed before they start paying attention? Also, how will NFTs, games, and virtual clothing fit into the retail landscape of the future?
These are some of the topics explored in McKinsey and the Business of Fashion’s (BoF) latest industry research, The State of Fashion 2022. We will look at how to adopt a Metaverse frame of mind and how it might open up new ways for innovation, social cohesion, and economic growth.
The increasing length of time individuals spend online is reflected in the rise of interactive and creative digital venues. The average time spent by Generation Z in front of electronic media has reached 8 hours daily.
Gen Z values individuality, it should come as no surprise that clothes are one of their top three self-indulgence spending categories. Does it extend to the virtual world as well?
It’s possible. Robert Triefus, chief marketing officer at Gucci, has seen an increase in the number of “second worlds” where individuals are free to share their thoughts and feelings. People who want to make a product that exists only in cyberspace and use it to show who they are in a computer-generated environment might not give their efforts enough credit.
His firm ventured into the sector with the Gucci Garden, a virtual attraction within the Roblox online community that attracted 19 million users. There are a number of fashion companies interested in the gaming sector, which is worth an estimated $176 billion. This is because many people like interacting with one another in online games or other virtual environments.
In fact, gaming is becoming more and more like actual life, and the epidemic has only boosted its popularity because it’s a prime market for clothing producers to target. As just one example, Ralph Lauren worked with Zepet, a social networking app developed in South Korea, to make a virtual fashion line. In-game characters might be customized using player-created skins and apparel.
Simon Windsor, Dimension Studio’s co-founder, and co-managing director, is in charge of the studio that collaborated with Balenciaga on their video game, believes that for certain customers, using Snapchat and Instagram filters is a natural progression into the world of digital fashion. We are at the very beginning of a whole new age. It’s beginning to alter the whole definition of the term “fashion.”
The convergence of AI and AR may pave the way for new fashion-based business models. Seasonal collections have previously been shown in virtual showrooms with full panoramic views, and model avatars have walked a 3-D digital catwalk.
There has been a huge uptick in people’s fascination with one facet of virtual worlds: NFTs, or non-fungible tokens. NFTs are one-of-a-kind crypto assets that may be purchased, sold, and traded in the virtual economy. Their validity and ownership can be independently validated on blockchains. Beeple (Mike Winkelmann, a digital artist) created an NFT sold in 2021 at Christie’s for a then-record $69.3 million.
NFT supporters say the technology might usher in a new era of prosperity. Karinna Nobbs is the Chief Experience Officer and Co-CEO of NFT Marketplace – The Dematerialized. She said this will change how we think about digital ownership, creative structures, the creative economy, and even money. This is greater than the scope of the internet.
NFTs have several uses in the fashion industry, including establishing product authenticity and even becoming valuable collectibles as separate entities. The engagement has increased over the previous year, especially from high-rolling players and the gaming community. Beeple was commissioned by Louis Vuitton to assist in creating a video game celebrating the brand’s 200th anniversary that would include collectible NFTs.
There is increasing evidence to suggest that financing fashion-related digital assets might be quite profitable. Still, the security of identity and the chance to build a community that NFTs offer, along with the psychology of scarcity that drives the NFT craze, are likely to be necessary for monetization opportunities.
There are worries about how blockchain technology, which is at the heart of NFTs, will affect the environment. There are also worries about how it will affect cybersecurity. For instance, due to a hack on Banksy’s website, a collector paid almost $330,000 for a fake NFT.
The fashion industry’s entrance into the virtual world hints at, at the very least, intriguing new channels for customer connection. The future of the digital world is uncertain. The potential it holds, though, is thrilling for all parties, from luxury businesses and merchants to consumers.
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