Key notes from New Frontiers in Fashion and Technology dedicat | MetaSavvy

Key notes from New Frontiers in Fashion and Technology dedicated to metaverse & fashion [CONTINUATION].

Some companies are using augmented
reality (AR), to enable users to alter photos and videos, and are creating digital skins to change
the appearance of a user’s avatar. For example, digital fashion start-up DressX, which sells virtual clothing that can be added to a photo and posted on social media, has partnered with brands such as H&M to launch digital collections. Meanwhile, users on online gaming platforms such as Roblox update their avatars with new skins regularly.

Furthermore, if brands choose to partner with virtual platforms, in gaming or otherwise, the top-line opportunity may be dampened by high take rates, which could reach as high as 50% commission on revenues.

Much of the frenzy about blockchain-based NFTs has been centred around digital art collectibles, which are in some cases bought and traded for inordinate sums, driving news headlines as some observers scratch their heads. The compound annual growth rate of the value of the NFT market skyrocketed 750% between 2018 and 2021, from $41 million to $24.9 billion.

But the rapid rate of growth in NFT sales
is already starting to moderate. Indeed, the daily trading volume on NFT marketplace OpenSea fell by 80% between February and March 2022.

The potential revenue generation of in-game outfits and accessories can be significant. Gucci sold a virtual version of its Dionysus bag for the equivalent of $6 on Roblox, which later led to bids of more than $4,000 per bag when resold on the secondhand market.

The long-term business opportunity for fashion brands to engage with NFTs will likely serve more pragmatic purposes by using NFTs as loyalty tokens. Gucci, Adidas and The Hundreds, among others, have used NFTs to offer benefits like early access to new NFT drops and physical products, essentially serving as a membership programme. In a sense, these NFTs are digital collectibles, since users cannot yet wear them in virtual worlds, though they could use them for social media profiles. Brands are starting to add more utility to collectible NFTs, which could make buying one more worthwhile to consumers and translate into a long-term opportunity for brands.

Business of Fashion