The NFT market is booming right now, and estimates indicate that it will continue to do so in the future. Metaverse’s invention paves the door for NFT luxury businesses to achieve $56 billion in revenue by 2030. As the creation of NFTs continues to develop new forms of fashion consumption, an increasing number of luxury brands are getting on board, investing in their own digital collectibles businesses. The demand for digital fashion and commodities will skyrocket in the coming years as more areas of people’s life go online.
The Metaverse, a pioneering idea presently being created and implemented, is a virtual realm where individuals may interact with one another and digital things through customizable avatars. However, there is still a long way to go. Nonetheless, the venues now available to us present chances for luxury companies to gain from digital collectibles and the emergence of social gaming within this short period.
People were able to connect to information during the start of the internet, known as Web 1.0. Web 2.0 was a social media iteration that enabled a new generation of individuals to engage with one another. Web 3.0 is now poised to create a completely new virtual world, dubbed the Metaverse. People will seek more than just knowledge and connections in this new digital environment; they will seek a true virtual reality immersion.
Huge opportunities for luxury brands in NFT and Metaverse
Users’ avatars will wear outfits and use things as expressions of individualization and personal expression in an immersive experience, just as they would in the real world – this opens up a huge potential for luxury brands. As an example, seasoned analysts have suggested the worldwide platform Roblox. One out of every five participants in this game and the creative system will change their avatar every day, similar to how a human gets dressed in the morning. Other platforms, such as Fortnite, have previously demonstrated what a mall in the Metaverse may look like by constructing a Retail Row and then a Mega Mall.
Balenciaga: A French luxury brand, created a digital range of Fortnite fashion clothes in September 2021, which could be purchased for $8 using in-game cash. The social gaming area of digital asset investments, according to crypto-gaming specialists, might contribute $10–$20 million to the luxury goods industry.
Gucci: FromMay 17 through May 31, 2021, the Roblox platform sponsored a virtual exhibition for premium fashion brand Gucci. Roblox players could buy digital replicas of actual Gucci merchandise for a minimal sum of in-game cash. However, when the exhibition ran out of digital assets to offer, gamers began auctioning off the branded NFT objects, causing their prices to skyrocket. For example, one of the pieces, a virtual duplicate of the very desired Dionysus handbag, went for $4,100 at auction, $700 more than the real-life original’s selling price.
Karl Lagerfeld: Another intriguing venture for luxury NFTs occurred in September 2021, when world-renowned designer Karl Lagerfeld published 777 NFTs on THE DEMATERIALIZED, a digital fashion marketplace, to be sold for 77 euros (about $87) apiece. With players’ keen expectations, Lagerfeld’s products sold out in a matter of seconds, generating interest in a new luxury goods market sector. Whether those purchases were driven by the excitement of a new and creative product or by individuals realizing how powerful digital real estate can be in creating possibilities, the outcomes of that successful launch far surpassed expectations.
Burberry: Burberry has collaborated with a game developer for the first time to create its own NFTs. After the success of its game, B Bounce debuted in 2019; the brand went into the digital world by collaborating with Mythical Games’ Blankos Block Party on a charming shark Blanko that can be acquired, updated, and sold in-game. The Burberry NFT, unlike Ethereum, does not function on the energy-intensive Proof of Work crypto paradigm but rather on a proprietary EOSIO blockchain protocol that uses a significantly less energy-intensive Proof of Authority methodology.
Nike x RTFKT: The new Nike sneakers may be tried on, but they cannot be worn in real life. On Dec 14, 2021, the sneaker behemoth entered the virtual NFT realm by purchasing the digital shoe brand RTKFT. RTKFT was formed in 2020 by Benoit Pagotto, Chris Le, and Steven Vasilev to blur the barriers between sports, gaming, and sportswear. In early 2021, RTFKT joined up with “Fewocious,” a prominent crypto artist, and sold 600 pairs of shoes in just seven minutes, grossing USD 3.1 million. On Snapchat, RTKFT held a virtual “try on” session for the sneakers, following which bidders could participate in the digital auction. The victors received tangible shoes, but digital shoes remain the most prized possession. Since RTKFT studios announced their affiliation with Nike Inc., their popularity has skyrocketed. Many of their virtual sneakers have striking resemblances to Nike signatures like the Air Jordan 1 and Air Force 1 and are influenced by them.
Sotheby’s, the prestigious auction company, immortalizes its online presence by introducing an NFT-only marketplace. The famed auctioneer hopes to profit from the increased interest and investment in the digital art area by being the first high-end auction company to build this space.
Sites like The Dematerialised are now completely dedicated to the trade of digital fashion NFTs that will never be used in the real world. The marketplace, which follows a similar real-world hype model, exclusively sells limited-edition things like bags and shoes, with just one brand or computer-designed object available at any one moment.
NFTs provide a unique avenue for other firms, such as Rebecca Minkoff, to experiment with avatars, increase brand interaction with a younger demographic, and commit to charities relevant to the company, such as The Female Founder Collective. “We have always been at the confluence of fashion and technology,” Rebecca Minkoff stated after her phygital presentation during NYFW. NFTs were the natural next step in that process for us. As individuals continue to experiment with clothing themselves and their avatars and having more experiences online, we wanted to investigate the notion of not just a 2D picture, but also digital commerce.”
Because luxury fashion brands still rely on the materiality of clothing to connect with their clients in our real world, the success of Karl Lagerfeld, Gucci, and Balenciaga are merely instances of what could be. Because so many of their attributes rely on physical materials, brands that aren’t used to selling digital items will have a distinct relationship with NFTs and the industry change.
Users following the rise of NFTs and the shift to digital assets may be wondering what all the commotion is about, why everyone is so eager to cash in on this market, and how the fashion industry might fit into this digital world. The Metaverse is working to fix this dilemma, and we’re already seeing creative solutions to the problem.
How the Metaverse will shape the future of luxury brands
While luxury businesses have made an early impression, analysts predict that following the Metaverse’s full emergence, brands that fall into the “soft luxury” category (which includes ready-made clothing, leather products, footwear, and so on) will be in the best position to benefit. On the other hand, the “hard luxury” sector, such as high-end watches and jewels, may find it far more difficult to attain the same degree of success as in the real world.
The Metaverse may also assist firms in reaching out to new audiences. For example, the present Roblox player population is primarily made up of teens, but women account for 70% of all sales in the fashion business. However, within the Metaverse, luxury companies will have the potential to appeal to clients of a whole new age group with whom they would not normally interact as consumers, thereby enhancing the appeal of a more engaging and embodied internet.
Because the Metaverse is founded on a decentralized virtual realm, many creative individuals will have a lot of chances to flourish inside various meta-universes, and luxury will undoubtedly find a home. On the other hand, the luxury brand representative must consider the prospect of being outperformed in their industry and craft with the development of attractive items and the arts in general. Because the laws and economic environment in this fascinating new digital frontier are still being defined, everyone has a unique opportunity to succeed.
The Metaverse is, without a doubt, here to stay. While the digital universe is still expanding and evolving, it has already been ingrained in many aspects of our life. Despite the fear of the unknown that a whole new world can conjure up, the real world has its own set of dangers and uncertainties to overcome. However, this new digital realm can open up opportunities that allow many people to breathe a sigh of relief when they realize that the virtual world is not going anywhere and that we are becoming more and more a part of it every day.
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