Modern Fashion Industry And The Metaverse World - A Match Made In Heaven

The metaverse will become an important subsection of the fashion industry as more brands become aware of the synergy and mutually beneficial value propositions on offer.

Unless you’ve been hiding under a rock for the past two years, it would be hard to dispute that since 2021, Web3 has been dominated by interest and investment in the metaverse. 

Popularized through the pioneering work of Decentraland and The Sandbox, the metaverse has combined with the technological, tokenomics, and communitarian value offerings of Web3, which has since resulted in the release of many compelling value propositions.

This has included projects relating to virtual real estate, NFT marketplaces, gaming, and art (to name a few), and given how the global metaverse market could soar to as much as $5 trillion by 2030, it comes of no surprise that mainstream brands are now seeking to capitalize on this burgeoning market. 

At the present moment, metaverse gaming has captured the lion's share of Web3 investment, and whilst gaming is indeed a truly compelling use case for metaverse integration, it is important to acknowledge that there are other fascinating use cases that deserve attention. 

One truly exciting use case is the fashion industry, which besides having one of the world’s largest consumer bases, arguably has more synergy with the metaverse than most other industries. Therefore, if merged effectively, the sky’s the limit for what the fashion industry can accomplish within a metaverse setting.

Clear Synergy 

At first glance, the fashion industry may appear worlds apart from the metaverse in terms of attributes and priorities, yet when taking a closer look, one would realize that this couldn’t be further from the truth. 

Firstly, both are built upon innovation and trend-setting for the purpose of generating and retaining loyal customers/users; without which, both would cease to exist. So in the same way that brands like Nike invest heavily in market research to determine the next big sporting trends, metaverse projects like Bloktopia are constantly hiring engineers and marketing professionals to further improve the utility and engagement of their virtual worlds.

There is then the overlapping theme of ownership to consider. 

Much like fashion apparel, owning virtual assets can often be driven by a desire to own something that is unique, expensive, and which elevates one’s social status for all to see. The rationale behind owning a CryptoPunk NFT, therefore, isn’t that much different to why some people spend thousands of dollars on Hermès Birkin bags. But whilst there are some interesting similarities between the two, it is their unique and complementary value propositions which is where the real synergy lies. 

As a result of Web3 projects incorporating blockchain technology and tokenomics within the metaverse, users can now buy and create digital assets, use them for various functions, and also monetize them. Furthermore, because all assets and transactions can be tracked and authenticated on-chain, this means they can’t be copied, and ownership is guaranteed for all to see.

On the other hand, the fashion industry has many globally recognized brands with huge consumer bases, and before the Covid-19 pandemic, brought in revenue that was estimated to be around $2.5 trillion according to a report by McKinsey. 

And herein lies the growth potential. 

Through integrating with the metaverse, fashion brands can leverage their established reputations and massive consumer bases in order to generate additional revenue through the creation of digital apparel, which in a metaverse setting, can offer up an array of new possibilities when it comes to utility, marketing and market research.

This includes being able to merge real-world clothing with a digital match (known as phygitals) for both authentication and engagement purposes, and can also be used as a sampling tool to test the waters in the virtual world. Moreover, because all transactions can be tracked on-chain, fashion brands can now track the types and amount of items their customers hold, and for how long. This enables brands to do much more targeted marketing.

Additionally, given how public relations is an indispensable part of maintaining a brand’s reputation, incorporating the metaverse also has the potential to appeal to a Gen Z and Millennial audience, who are far more primed for a virtual future than any other generation and thus make an ideal target audience.

The possibilities are endless. 

It is why the likes of Nike, Adidas, D&G, and Gucci have already started their own metaverse journeys, and research firm Technavio estimates that the fashion metaverse will be worth $6.61B in 2026, and predicts that market growth will increase by 30.5% year-over-year.

Therefore, besides the clear synergy between the two, it is evident that fashion brands that are slow or unwilling to enter into the metaverse, risk being left behind as the world becomes more digitalized.

However, whilst the advantages of being a first mover need no explanation, it is advisable that brands avoid rushing into the metaverse without having first spent time researching what is still a nascent value proposition, and take time to identify the optimal way in which to best navigate the metaverse.

What the Future Holds

The opportunity is clear for all to see  - the metaverse will change how people view fashion, and the incorporation of Web3 infrastructure will enable fruitful opportunities that were not previously available. 

Fashion brands now have the opportunity to tap into a new market made up of young and tech-savvy individuals who will be the breadwinners of tomorrow, whilst simultaneously enjoying beneficial utilities revolving around reach, community engagement, and loyalty; all with low barriers to entry. 

This in turn has immense value for Web3 projects, which can benefit from tapping into the fashion industry’s large consumer base and name recognition, which are two fundamental ingredients for attaining the mass adoption that has long escaped Web3.  

Yet like any nascent industry, there will be an onus on getting it right, and in order to reduce the likelihood of underwhelming results, brands should resist the urge to rush into the metaverse, and should instead take their time to identify the best technology, tokenomics, and partners with which to elevate their offerings to the next level.  

In doing so, the fashion industry will be much better situated to capitalize on the inevitable technological shift that will redefine the very foundations of commerce and human interaction in years to come.