The digital future of fashion
With the growing popularity of the Metaverse, the digital fashion industry is becoming a global empire, involving both major luxury brands and retail consumers.
NFTs are a virtual product that the user can own like any other collectible good. It is a real asset in the sense that it can be used like any other good and can also be transferred. NFTs are on the way to a reality that is increasingly blurring the lines between what we call the “real world” and the Internet or digital universe. Originally, NFTs were just claims, but now it is increasingly common for them to have utility.
This whole new universe of digital goods is backed by blockchain technology making them a rising value, in some cases, highly sought after. By applying blockchain technology, collectors of art (fashion, music, artwork, memes) can now have virtual ownership of any creation.
Luxury brands such as Gucci, Balenciaga or Louis Vuitton are betting on the digital world of NFT crypto assets and some of them have even presented their new collection in video game format. Louis Vuitton has created a collection for “League of Legends”, Balenciaga for “Fortnite” and Adidas, for “The Sandbox”. Other companies have also introduced their brands to the Metaverse with the creation of NFTs, such as Nike, which bought RTFK Studios, a $33 million company dedicated to the creation of NFTs. One of the milestones of this company is to have sold more than 600 pairs of virtual trainers in just 10 minutes, raising more than 3.1 million dollars. Zara also launched its first virtual clothing collection on a platform called Zepeto. On the other hand, Adidas has also launched a limited edition NFT collection consisting of physical and virtual clothing.
Digital fashion is not only a tool to promote the brand, but also a way to make money.
Digital clothing and the future of fashion
To talk about the future of fashion, it must be said that digital fashion has gone from being a niche market to a very lucrative business in a very short period and this is also due to the change of name from Facebook to Meta, according to data from the consultancy firm Bain & Co. in 2020, products to customize avatars in video games were sold for a value of 50,000 million euros. This figure is expected to triple by 2022. And considering that these products do not need raw materials, the profit margin is much higher.
Within the sector, Adidas and H&M have opened virtual shops on platforms such as Creek and Roblox. And another of the great advances that characterize this future of fashion is that there are already fashion weeks hosted in the Metaverse in which the best known is the Decentraland, this is a virtual universe that works by plots that are bought with cryptocurrencies and in which brands will sell their digital products.
How much do these clothes and accessories cost?
The prices of virtual clothes, like real clothes, are totally different. A curious case is The Dematerialised, which has partnered with Rebeca Minkoff to launch a limited edition of intangible bags priced at €100. Within minutes of its launch, it sold out and now some of its models have appeared on NFT sales websites, with prices of more than €1,000.
Adidas has taken the step into the Metaverse by launching “Into the Metaverse”, in collaboration with Bored Ape Yacht Club, Gmoney and PUNKS comics, and has done so with a collection of 30,000 limited edition NFT. The price of their release is O.2ETH (approximately 600 euros). The purchase of one of these units will give you access to a collection of exclusive physical clothing from the collaboration available in 2022.
Brands launch exclusive series that many customers buy as mere collectors’ items and most of the time, speculation.
The luxury sector is present in Roblox, Gucci has been launching projects for some time where you can buy and customize trainers called Virtual 25 for around 10 euros. In this case, it is not a NFT, as they do not have the function of customizing them and therefore, outside this virtual world, they have no value, but that does not mean that some Gucci garments have often reached several thousand euros in resale, when their original price was less than 20 euros. In fact, it has been seen on several occasions that a digital handbag ended up far exceeding the price of the original.
Another of the platforms that could be categorized as Metaverse is The Sandbox, which is attracting brands, and this is the place where Adidas has made a bid to gain a foothold. The brand bought 144 pitches for around 400 ETH to create its own space in this virtual world.
How to ” go shopping ” in the Metaverse?
Nowadays these purchases can only be made through virtual wallets in which cryptocurrencies are held. The most used is ethereum, whose price per unit is approximately 2,500 euros. When you buy an NFT through one of these virtual wallets, you keep the unique property of that virtual design, so what increases its price is the number of copies that have been issued. There are also ‘Marketplaces’ where you can buy a second-hand NFT. This makes them speculative goods.
Letslaw is a law firm specialized in New Technologies and data protection law. We will be happy to answer all your questions about cryptocurrencies and Blockchain technology.
Letslaw es una firma de abogados internacionales especializada en el derecho de los negocios.