How to Win Big in The New Era of Virtual Fashion?
Virtual fashion seems to be all the rage right now, however there is a way to ensure the quickest ROI when brands are jumping onboard this trend. #fashion #retail #metaverse #vr #virtualreality
Virtual fashion is a new trend that is gaining strong traction in the metaverse. Although the population of virtual people in the metaverse is not yet in the tens of millions or hundreds of millions, there are already many fashion brands such as Nike, Adidas, Gucci, Balenciaga, and Ralph Lauren that are moving into the metaverse in advance. There are even some metaverse brands that are trying to mass produce virtual fashion items for platforms such as Roblox and Fortnite.
In a 2022 metaverse fashion trends report created by Roblox and The New School Parsons, it was found that as GenZs are spending more time socializing, creating, and expressing themselves in immersive social spaces, the demand for digital fashion, its widespread impact, and as a result, its prestige, are on the rise.
Credit : Adidas
Half of those surveyed on Roblox platform said that they are changing their avatar’s clothing at least every week, and for 2 in 5 self expression (via clothing and accessories) in the digital world is already MORE important than expressing themselves in the physical world. Nearly 3 in 4 of respondents say that they will spend money on digital fashion, with over 1 in 4 having spent from $20 to $100 or more on a single virtual item. Two thirds are excited to wear brand name virtual items on Roblox.
Big brands’ logic of securing and occupying an early space for themselves in the metaverse is not wrong. In recent years, Nike, Adidas, Gucci, and other big brands have jumped into virtual fashion and released clothes and shoes only wearable in their new experimental virtual worlds or virtual games. These types of announcements have made a huge splash in the media, built buzzwords around these fashion brands’ participation in the metaverse and perhaps even positively boosted the sentiment around their stock prices. However, this strategy is not necessarily the best ROI for these brands, considering everything else in the equation.
.Swoosh, Nike’s official Web3 marketplace platform. Credit : .Swoosh
It is operationally very challenging if not impossible for big brands with a completely different business model to build a successful brand new metaverse social media platform. Look at Meta and their failure so far with Horizon Worlds, despite pouring billions of dollars into their virtual reality efforts. Hence, most of these fashion brand metaverse initiatives remain a gimmick that would be soon forgotten in the next news cycle.
Credit : Balenciaga
How many genuine metaverse social media platforms have really gained traction besides Roblox? However, despite turning over revenue of billions of dollars, Roblox is still yet to prove profitability. The company suffered a net loss close to 300 million USD by the last quarter of 2022. Is it going to be a good strategy for all the household fashion brands to launch on these platforms?
In my assessment, the right way to participate in virtual fashion should be to onboard Web2 and Web2.5 virtual human IPs a.k.a virtual idols for endorsement partnerships. For example, if Nike or Adidas were to issue a pair of shoes in the metaverse, what should their marketing strategy be to attract more people? The answer is to find a suitable virtual human IP, such as virtual influencer, Xu Anyi who already has a large number of fans on popular Web2.5 social media platform TikTok.
Xu Anyi is one of the top virtual streamers on Chinese TikTok, Douyin, who use our iMetaStar hardware and software solution to appear on the internet as animated characters. He can earn up to 200 000 USD monthly, and you can be rest assured that if he comes out online promoting a virtual good, that good will be sold within minutes.
Xu Anyi. Credit : STEPVR
Emotional link is still the biggest cue to connect real human customers to the metaverse world. Our virtual avatars do very well as live streamers because they manage to create memorable emotional bonds with their fans, using hyper-realistic, well-crafted, 3D model animated avatars that appeal very much to the imagination of the internet users.
Hence, rather than rushing to launch their very own metaverse social media platform on which users can buy their virtual fashion goods, I would encourage big fashion brands to latch onto existing Web2 or Web2.5 social media platforms and existing virtual idols who have proven real cash profitability and market demand to promote these virtual fashion goods. After capturing real buyers of their virtual goods, it would be also easier for these fashion brands to entice them to join their Web3 platforms.
In conclusion, we should still apply the same business logic of the traditional fashion industry to the virtual fashion industry. We need strong virtual and digital ecosystems with concrete avatar identities that have complex political, social and economic relationships with each other. Such ecosystems would justify a demand for items bearing prestige value such as NFT skins and digital clothing, not unlike what is happening in our real physical world.
Once the number of virtual humans in the virtual world reaches 10 000 and more, there will certainly be virtual fashion brands specialising in supplying virtual clothes and shoes and eventually they will join forces to create metaverse malls and e-commerce shopping platforms. As long as the virtual population keeps growing, the demand for virtual fashion will continue to grow as well, as simple as that.