Metaverse, NFT, blockchain and fashion
Considerations on some of the trendiest trends around
NFT, Metaverse, Gaming and so on: last months a huge amount of articles, analysis, insights, interviews literally submerged the web. A wave we are all contributing to and that can be perfectly summarised by the picture below.
This is the volume of worldwide searches for the word “metaverse” in the last 12 months.
Impressive.
Then, after months reading and documenting around, I decided add my contribute to that infamous wave :)
1. ON METAVERSE
What we mean by Metaverse? For sure you have already come across several definitions in your researches. I would start with the one by Matthew Ball (I strongly recommend his “The Metaverse Primer”):
- It just continues indefinitely and exists for everyone in real time.
- Everyone can be a part of the Metaverse and participate in a specific event/place/activity together, at the same time and with individual agency
- It’s a full economy — individuals and businesses will be able to create, own, invest, sell, and be rewarded for an incredibly wide range of “work” that produces “value” that is recognized by others
- Be an experience that spans both the digital and physical worlds, private and public networks/experiences, and open and closed platforms
- Offer unprecedented interoperability of data, digital items/assets, content, and so on across each of these experiences.
So metaverse means a lot of things, not only avatars and virtual reality.
Nevertheless, it took years for this new concept to spread out and enter into marketing departments around the world, fashion included.
Why now?
(i) One factor was the Covid-19 Pandemic, which accelerated long-term trends: brands were forced to rethink quickly how to connect to their audiences in lack of any physical space, bringing tools that were already in use in different niches — like Unreal engine for 3D rendering and gaming, VR, blockchain and NFT — to mainstream.
(ii) The other, if not the key element, regards the attitude of a new generation which will soon become the largest cohort of consumers. Gen-Z (people born between 1997 and 2012) has grown up in a mobile world (the iPhone launched in 2007), never experienced a not-connected world, thus challenging brands to adapt to a completely new audience whose purchase decisions differ significantly from the previous generations.
Out of all the distinctive elements of Gen-Z, worths mentioning that they are avid video gamers (81% in the last 6 months, with an average time of 7h and 20 min per week), have a weaker relationship with the concept of property compared to the previous generations, privilege access to services over product ownership, and prefer to build and connect into micro-communities, around “digital campfires” (on Discord, but also on Roblox, Fortnite etc).
Understanding Generation Z is crucial and gives us clear indications on the features of the metaverse. In my opinion, one of the most important elements here in play deals with the concept of identity.
2. ON IDENTITIES
Compared to the previous generation, Gen-Z has a much more multifaceted relationship with the perception of the self. Identity is constantly redefined on the basis of situations and stimuli from the surrounding environment.
Reports say they feel truly themselves only with close friends (hence perhaps the need for the digital campfires mentioned above) while 1 in 3 declare their online identity represents their most authentic self (versus 1 in 5 of Millennials and 1 in 10 of Generation X): this generation tends to blur the division between online and offline, implementing a continuous bounce between these dimensions in identity building.
3. FROM MEDIUM TO -VERSE
The digital world transformed from being a simple intermediary between two extremes of the physical world, to being a place, a starting and final point.
If previously the product or the experience were physical, addressed to real people and the digital element was just a facilitator to convey the message more easily, now even the original product can be digital, to be used by a digital avatar (in case of VR) or by real people (in the case of AR): digital is no longer just a medium, but also a place.
As a place, it therefore becomes a world. A world not new if we just look at its external form (remember Second Life?) but completely reshaped by the traits of Gen-Z.
Worth noting that in games such as Roblox, Minecraft, and Fortnite, Gen-Z is shifting their focus away from the act of playing the game itself and more towards the social and community aspects. They go beyond the intrinsic nature of these games (based mainly upon competition), and somehow transform games in spaces for socialisation and spending time with friends, following news trends, and consuming news and event media through apps, websites, and podcasts.
Furthermore, for this generation the augmented reality space becomes more about the live experience of these worlds and how they interact, which includes playing, viewing, and socialising in equal degrees.
4. ON GAMING
Digital from medium becomes a world, a world to explore and build. How does this exploration happen? The answer looks quite easy: through gaming.
Following Huizinga (Homo Ludicus, 1938), it’s exactly through the practice of playing that human beings create not only their world, but their own culture. What does new culture mean in this case? It means new reference points, new social structures and a new language.
The videogame world has become the ultimate tool of self-expression for Gen-Z, and brands are no new to forms of experimentation and hybridization with fashion.
From Louis Vuitton that as early as 2016 used a Final Fantasy character for its campaign, down to Balenciaga that replaced its FW21 fashion show with a video game and then released a collection on Fortnite, to Valentino on Animal Crossing, to Burberry and Dolce&Gabbana (just to name a few): campaigns and marketing activities are piling up day after day.
Worths mentioning MM6 in partnership with Kara Chung (player of Animal Crossing and owner of a popular instagram account where she shares outfits), on the creation of several outfits: working with influencers could be a good entry point for brands as gamers may feel less the “top down” approach luxury brands usually use in their marketing operations. Furthermore, brands could benefit from the experience of users renowned by the community, especially if they approach this world for the first time.
On the other hand, the risk of choosing a name not in line with brand’s perception may generate a distortion between physical and digital, especially for an audience used to perceive these 2 worlds as a whole.
And exactly because of this continuum, it is even more interesting to see the birth of digital-only fashion houses like THE FABRICANT or RTFKT.
After all, why would I need a real dress if I can have it in all my digital representations?
5. ON VIRTUAL REALITY & AUGMENTED REALITY
If gaming is how we explore the metaverse, Virtual and Augmented Reality are the doors through which we (should) go in and out. Even if from the technological point of view we need further improvements (VR in video-games is not widespread yet and AR experience have some optical difficulties to really make the difference), the path looks well defined.
Through these touch points we realise phygital at its fullest: a spectrum starting from the physical world to the digital one. It’s not an in/out thing, we’ve some degrees: for instance we use digital-only clothing on our avatar, but also on our real body by posting on our social media.
Beside the fore-mentioned The Fabricant or RTFKT, worth mentioning DRESS X, the first multi-brand retailer for digital-only clothing: what if in the next years brands’ customers will requests digital-only outfits after VR in-store experiences?
When physical and digital compenetrate, brands are pushed to explore and rethink their presence in order to deal with a continuum that starts from their brick-and-mortar stores to Roblox avatars or a Fortnite concert, passing through AR filters, digital-only marketplaces and virtual reality.
6. ON BLOCKCHAIN
Metaverse and blockchain are different concepts that intertwine when we talk about Non-Fungible Tokens applied to digital artworks sale.
Blockchain technology is among us since years, (some say back to 1991, other consider 2008, the bitcoin birth date), as well as one of its most interesting products, the non-fungible token, dated 2014.
Non-fungible tokens in their simplest form are contracts able to attest, among other things, the ownership of any form of digital assets.
Welcome scarcity on digital.
Even if they are not primarily related to art, it’s art that made them so famous.
Just to make an example outside that field: Twitter founder Jack Dorsey sold ownership of his first tweet.
These “contracts” are recorded on a blockchain, which provides transparency due to its decentralized nature, while payment is made through cryptocurrencies into the same network.
When it comes to NFT and blockchain, it is necessary to skim the large amount of noise generated by headlines and news in order to go a bit deeper into this matter.
We mentioned that NFT is not limited to the artworks or digital objects purchases: for fashion its potential scope is much wider and may touch extremely important aspects of a brand such as traceability, authenticity, sustainability (the latter point worths a side note*).
By using non-fungible tokens it’s possible to certificate the origin of a garment, its authenticity, to guarantee which materials were used, all through a technology (the blockchain) that puts transparency and trustability at first place.
These elements turns to be pivotal not only for the business (for second hand market or to fighting fakes, just to name a few) but also for brand positioning since the Gen-Z is extremely keen to these messages for any purchase decision.
Luxury giants have already moved along this path with AURA CONSORTIUM, a project whose goal is to create a shared technological scaffold that all the brands taking part to this can use to guarantee traceability and transparency of their garments.
In short, we build trust: we’re working on the fundamentals of brand building.
Interesting to understand if marketing and “product-related” trends will converge: the purchase of a physical outfit come along with with all the informations from the supply chain can be extended “by default” by adding a digital version to be used in metaverse? Furthermore, can capsule collections dedicated to the metaverse allow customers to access to “physical” brand experiences?
Options are endless, and Dolce & Gabbana marked the way on this.
Further question: how would you work on customer loyalty using these tools?
No doubts these technologies still have limits, nevertheless we underestimate their potential if we relegate to a single company department: what we see is that they’re more like a common thread crossing the whole brand, from product to design, sales, retail and marketing.
7. CONCLUSIONS
As said, all this has its own limits, we listed below some:
- Impossibility to switch among metaverses: we need something like a “metaverse passport” that allows me to easily jump among digital worlds. Platforms are endless inside, but locked-in from the outside. As a matter of fact, we should solve this on social media too.
- Impossibility of unified payments on different blockchains, since each one uses its own cryptocurrency.
- High volatility for NFT, probably due to the strong speculation in this moment.
We are at the dawn of a world whose borders are still not clearly defined: as Benedict Evans noted, we’re now in the exactly situation experienced in the early 90s when we were in front of words like interactive TV, hypertext, broadband, multimedia, and video-games: we could imagine a hyper-connected user even if we still couldn’t figure out how to link all those concepts.
In the same way now we see many new and exciting elements coming to life, we can barely see the general meaning of what is happening but we still don’t know how all the pieces of the puzzle can come together: which of them will find a clear fit and which ones will be dismissed.
In this current state, brands on metaverse are just looking to make press headlines with first/early-mover media innovations and reach a subset of the Gen Z/young Millennial audience. In a perpetual test and learn phase, they’re waiting to understand the real path this universe will follow.
Will we need a Chief Metaverse Officer, as recently wrote Vogue? Hard to say at this stage, but if metaverse will prove to be here to stay, brands will need to start working on more integrated approach in order to include this new dimension into all the touchpoints of the customer journey and into all the stages of the marketing funnel.
*The problem comes since the blockchain in most cases is designed to privilege security by using a PoW protocol, which turns to be really energy-intensive thus raising concerns about its environmental impact. Using a high impact blockchain to certify a low impact garment sounds quite weird. Luckily recently greener and less energy intensive protocols are born such as PoA or PoP.
8. RESOURCES
ON GEN Z
HARVARD BUSINESS REVIEW — Where brands are reaching gen Z
MCKINSEY — ‘True Gen’: Generation Z and its implications for companies
INSIDER INTELLIGENCE — Generation Z News: Latest characteristics, research, and facts
ON METAVERSE:
MATTHEW BALL — The Metaverse Primer
BEN EVANS — Metaverse! MEtaverse? Metaverse!!
BRANDS AND METAVERSE:
DOLCE&GABBANA NFT AUCTION ON UNXD
LOUIS VUITTON ON LEAGUE ON LEGEND
THE FABRICANT — DIGITAL FASHION HOUSE
ON FASHION AND METAVERSE
BOF — THE LIMITS OF VIRTUAL FASHION
VOGUE BUSINESS — The Fashion EXECs Guide to Metaverse
HIGHSNOBIETY — Gaming Is Pushing Fashion Into an Identity Crisis
GLOSSY — How fashion brands are navigating NFTs and what’s next for the metaverse
