The Apparel Digest Report
COVID-19 hastened the process of digitalization, which ultimately resulted in the development of the Metaverse. Virtual fashion and gaming are becoming increasingly popular strategies for fashion companies to attract younger customers. Within the gaming industry, luxury businesses are offering digital fashion goods related to fashion. The use of avatars and virtual wardrobes will become widespread, necessitating the modification of business models employed by fashion enterprises. Over the course of the past several years, we have witnessed a level of digitalization that has never been seen before, with the COVID-19 outbreak serving as the major engine.
Economies and all industries were compelled to hunt for rapid and alternative solutions to change their businesses to comply with the restrictions imposed by the government as a result of this completely unforeseen event. The impacts of the pandemic have been one of the most significant challenges for the fashion industry, which was previously based on direct physical contact when it was first established.
The virus remained in the environment for a couple of weeks, which resulted in the shutdown of manufacturing facilities. Additionally, fast fashion and luxury labels were forced to terminate employees and postpone fashion presentations and other events linked to the infection. The retail sales experienced a severe decline as a direct consequence of these stringent limitations. As a result, the digital platform became the new life for consumers.
The decade that followed COVID accelerated the development of digital space and resulted in the creation of the Metaverse. In this real-time virtual environment, fashion enterprises have a plethora of options to communicate with younger consumers who are very coveted. This world also offers new opportunities for creative expression, community building, and commercial activity.
In this ever-changing environment, there are a plethora of chances for virtual fashion. These opportunities include gaming interfaces, digital photography, augmented reality films, and even non-fungible tokens (NFTs). This opens up an attractive opportunity for the sector to expand its customer base and increase its income generating capacity. It will be necessary for fashion designers and businesses to cultivate the capacity to weave together the real and the imagined to successfully move into the future.
The metaverse is not a new occurrence, as indicated by research that was carried out in the year 2020 by Pilar Gonzalez from the Politecnico di Milano educational institution. According to the paper, the concept of a virtual world was first conceived in the 1980s and 1990s, but it did not acquire significant traction for a considerable amount of time. In his novel Snow Crash, published in 1992, Neal Stephenson introduced the concept of the “metaverse” for the very first time. In this book, he described a three-dimensional virtual world that was inhabited by avatars of real people. As computing and graphics continued to progress during the 1980s and 1990s, it resulted in the creation of a number of different types of video games, including simulators, shooting games, fantasy role-playing games, and other digital virtual worlds. This creates the basis around which the metaverse of today is built.
There are further examples from the 2000s that may be used to describe social 3D places. Some examples in this category include video games such as Club Penguin and The Sims 2. Using a penguin avatar, users of Club Penguin were able to personalize their virtual “houses” or “igloos,” chat with their friends, and play online games for cash. Those who played The Sims had the ability to create avatars, houses, communities, and a parallel virtual existence for themselves.
The present fascination of luxury companies with video games may also be explained by the fact that ninety percent of members of Generation Z consider themselves to be gamers. Providing seamless, tailored, and immersive experiences through gaming, such as customized online and offline shopping expeditions, is one of the ways that these firms are aiming to connect with this demographic. These days, games are a well-liked method of marketing and reaching out to younger people. Not only do games provide fashion companies with the opportunity to create new and unique experiences, but they also allow them to form tighter ties with their customers.
The way video games are currently influencing the fashion business is something that cannot be completely ignored. Marc Jacobs, Burberry, Dior, and Guerlain are just a handful of the fashion giants that have previously joined the industry. Nearly all fashion brands have already entered the market. A few of these fashion houses are presently displaying their most recent collections within video games, while others are collaborating closely with the most prominent corporations in the industry to provide players the opportunity to dress their avatars in outfits that are from the most recent collections. There was a total of $3.1 million worth of digital trainers that were sold by the online shop RTFKT in just seven minutes in the year 2021. Total sales were 600 pairs.
According to the report presented by Gonzalez, the size of the global fashion market is currently estimated to be close to $3 trillion. Even though digital fashion is still a relatively new business area, it is rapidly gaining market share. This is since games such as Fortnite generate a significant portion of their annual income of $2.4 billion through the sale of Avatar skins. You should be interested in the metaverse because skins, which are individualized add-ons that allow you to modify the appearance of an avatar (think clothing, accessories, and so on), are one of the most promising opportunities for in-game revenue. Luxury and mass merchants should be interested in the metaverse.
Through the establishment of a concrete resale economy, the metaverse has provided users of all ages with the potential to produce revenue. Taking the digital Gucci bag on Roblox as an example, which was resold for more than $4,115 (which is more than the actual version) after the Gucci Garden experience, exemplifies the potentially endless possibilities for companies to generate revenue in the metaverse.
As time goes on, there will be an increasing number of avatars that are on the go. These are going to be three-dimensional depictions of humans, including their behaviours and attitudes. The use of avatars is expected to become as widespread as the use of profile images in the present day. People will have a virtual wardrobe of clothing that have been designed by a variety of designers to suit a wide range of activities and circumstances, according to the predictions of experts.
“Direct-to-Avatar (D2A) refers to an emerging business model to sell things directly to avatars—or digital identities—bypassing any supply chain management such as drop shipping and logistics of how to get a physical object to a consumer’s door,” says Ryan Gill, co-founder, and CEO of Crucible. “D2A” is an acronym for “direct-to-avatar.”1 D2A brands are made available in social or competitive virtual environments, such as games or open worlds, where users can project themselves as an avatar into the real world.
In the previous year, Ralph Lauren presented a digital clothing collection consisting of fifty pieces that could be purchased through social media. At the same time, American Eagle made the announcement that they will be launching a digital clothing collection for Bitmoji avatars. Gucci and The North Face have introduced a collection of Pokémon GO avatars that are a collaborative effort. In addition, Gucci has developed virtual trainers that can only be worn using augmented reality technology.
Therefore, the metaverse offers a variety of opportunities, and the approach that a firm takes to reap the benefits of it does not necessarily have to be the same for every business. The most successful approach will be determined by several elements, one of which is the size of the brand as well as its overall objective.
The strategy may go in a different direction based on the degree of immersion as well as the platform that is being utilized. Regardless of the approach, all fashion companies are required to begin the process of formulating strategies to adapt their business models to accommodate these new realities. Considering that younger people spend the bulk of their daily lives in digital and virtual environments, this is going to be an extremely important consideration for marketers that are intending to target them.
