The Digital Closet: Fashion Brands Exploring NFTs and the Metaverse

When most of the world shut down because of the global pandemic, footfall in retail stores plummeted, meaning brand and consumer relationships were permanently forced online. This directed brands to accelerate their online experience and experiment with new technology to connect with their customers.

Lots of companies used technologies like augmented reality, virtual worlds, video games and interactive shopping experiences to reach out to their consumers, and even fashion shows were beamed right into the homes of clients through elaborate interactive live video streams. Alongside this, NFTs allowed brands to connect with their consumers, giving them something to own in the virtual world and in turn, the battle for space in everyone's digital closet began.

One of the first notable instances was when Italian fashion house Gucci sold a digital version of its Dionysus bag on the video game Roblox for $4,100 dollars, which surprisingly enough is more expensive than its physical counterpart. Since then, digital assets have begun growing rapidly, and luxury brands are looking to capitalise on this growth as they fight for market share.

Video games are now offering a unique way to allow companies to expose themselves to new generations of future customers. Nothing exemplifies this more than Spanish fashion house Balenciaga and its infamous Fortnite drop that first launched in September. The digital garments (which are based on a real-life collection) took advantage of Fornite's large player base, allowing players to show off their style to fellow competitors.

Things didn’t stop there though, Balenciaga then went on to create their own game to showcase its new fall collection. Titled ‘Afterworld The Age of Tomorrow’, players could explore a unique world and experience the collection up close. In the same vein, Louis Vuitton released ‘Louis The Game’, an IOS and android game permitting players to play as the character Vivienne, an avatar who travels through a world collecting items and unlocking postcards.

If that wasn’t enough, players could even collect unique NFTs by Beeple. This strategic partnership allowed Louis Vuitton to exploit the huge buzz around Beeple, an artist whose NFTs are now setting record prices at auction. So, it’s clear that the future of the retail experience lies in engaging new consumers and expanding the brand experience online, and what better way for brands to do so than working with a constantly growing and multi-billion-dollar enterprise like the video games industry.

With all that said, It’s not just luxury brands exploring this space. adidas dropped a mysterious POAP (Proof of Attendance Protocol) on its app ‘adidas Confirmed’. For the unaware, POAP’s are unique NFTs designed to keep a reliable record of real-life experiences, such as completing tasks or attending events. It’s not clear what adidas intends to do with the POAP’s but it does offer a unique way of identifying its most loyal followers.

More recently, the German brand teased another partnership, this time with Sandbox. Sandbox allows you to purchase virtual land, hold events and games and even monetise the real estate. It is known that adidas purchased a large plot of land in Sandbox but so far we don’t know what the brand plans to do with it, however, that didn’t stop the Sandbox token from shooting up an enormous 40% when the news hit. To add even more anticipation and mystery, adidas tweeted that it has partnered with CoinBase. Is this ‘Probably nothing’? Or are they going to be part of CoinBase’s expansion from cryptocurrency into the world of NFTs?

Not to be outdone by their rivals, Nike has let out a lot of hints that they might be betting big on the metaverse in the future. Reports this month indicated that Nike is getting ready to step into the digital world after they registered a number of different trademarks relating to “downloadable digital goods”, including the swoosh and their iconic “Just Do It” slogan. In addition, job listings for ‘metaverse’ roles have been surfacing recently adding further fuel to the rumours they will be getting more involved in the virtual realm.

Nike aren’t newbies though, just like Gucci and many others it has used Roblox the online game platform for exposure. As you can imagine, players can wear Nike apparel including sneakers and baseball caps to wear during play. Nike has a good track history and no doubt its future plans will involve the metaverse and NFTs, but so far it hasn't gone full crypto-mad like rivals adidas.

NFTs may also allow collectors provenance of real physical assets. Each purchase could be provided with a non-fungible token that would record the transaction on the blockchain giving proof of ownership. These efforts arrive as luxury brands collaborate together to try and combat counterfeit goods.

For instance, Aura dubbed the world's first ‘luxury blockchain’ is a first of its kind joint-venture between Prada, Cartier and LVMH. According to a press release by LVMH, the state of the art technology aims to match ‘product ID to client ID...through a chain of secure, non-reproducible digital blocks’. This will enable consumers to access the full history of a product, its previous ownership, materials and complete journey. In recent years, a brand's sustainability credentials have become increasingly important in the fight against climate change.

We’re seeing a huge pivot within the fashion industry to embrace the digital renaissance of the blockchain and the metaverse. In the future, we may have a digital closet, or a collection of digital clothes to allow us to explore the virtual space. The metaverse offers creators limitless scope for artistry and expression not possible in the physical world. NFTs allow this creativity to not just be monetised, but for its originality to be protected. All of which begs the question, who’s going to do what next?