Authored by Lokesh Rao, CEO and co-founder of Trace Network Labs
The world of technology is constantly in a state of flux. To some, the metaverse is considered to be the next evolution of how we use the internet and how we interact, work and play online.
The term metaverse has been making several rounds in the video game world as more and more video gaming platforms adopt virtual reality environments that allow simultaneous interactions from multiple users. In some ways, this is considered the next step in how we interact on various platforms.
What is the metaverse?
Recent advancements in metaverse talks include Facebook's groundbreaking announcement to change the company's name to Meta in what is set to be a major rebrand that will direct the company's focus towards the metaverse.
While unveiling the company's new name, Mark Zuckerberg said that "the existing brand could not possibly represent everything that we're doing today, let alone in the future."
He further added that the company aims to continue to be seen as a "metaverse company."
Already, plans are underway to hire 10,000 in the EU to work on developing a metaverse for Facebook.
Despite the growing interest from giant tech firms such as Facebook in the metaverse, the term's origins date back further than the social media giant.
Neal Stephenson's 1992 techno-thriller novel 'Snow Crash' first mentioned the term metaverse. The book, which garnered a cult-like following since its release, introduced the idea of a metaverse as a type of virtual reality web where people can connect amongst each other and with their virtual environment using avatars.
Given that we are currently in a web 2.0 generation of the internet, the metaverse is considered an upgrade to a web 3.0 internet experience where decentralized yet interoperable applications are the norm and users can jump from one platform to the other using digitally universal identities. The metaverse is expected to be a world where users have true ownership of the digital items, reputations and tools they gather online with ownership registered with immutable decentralized ledger technologies.
As it stands, Facebook is not the only player dabbling with the idea of a metaverse. Several big-name companies across varying industries are looking to become key players in this growing market with ongoing developments on VR platforms.
The metaverse in the fashion industry
In the fashion industry, the metaverse has become a costly playground, with the world's largest, most profitable luxury brands rushing to quickly seize ground in the metaverse. This is seen in the increased uptake of VR films by fashion designers such as Denni Francisco.
Francisco's use of a digital medium to display her collection (originally a workaround lockdowns and travel bans) is increasingly becoming a global trend. Larger players such as Toni Maticevski are taking on a more pragmatic approach using augmented and virtual reality, by letting fashion enthusiasts try on different designs in virtual reality.
Apart from individual artists embracing virtual reality to showcase their talent, enormous luxury conglomerates such as Balenciaga, Kering, Burberry and Louis Vuitton are adopting technologies that enable a metaverse-like experience.
Kering, LVMH and Richemont, for instance, have taken to virtual reality showrooms and trade shows, while Dior and Gucci have partnered with the parent company of Snapchat to create AR sneakers for users.
What's more, Balenciaga is working with Epic Games (makers of Fortnite) to create virtual wearable accessories and weaponry that players could buy in the Fortnite metaverse.
Simply put, the implications of the metaverse for brands and independent fashion designers in a Web 3.0 internet are huge. In addition to the metaverse, NFTs (non-fungible tokens) in a Web 3.0 metaverse experience are capable of enabling people to completely immerse themselves in the artistic culture espoused by the fashion industry while having true ownership of the fashion and luxury items they purchase.
Brands and independent fashion designers will also have more accessible monetization methods and better control of their products.
For these and multiple reasons, here is a breakdown of why traditional fashion brands ought to consider the benefits that come with the metaverse and NFTs as the internet evolves into a Web 3.0 experience.
True ownership of both physical and digital fashion items
If you are already familiar with blockchain technology and non-fungible tokens, then you know just how revolutionary NFTs can be for the fashion business. So far, NFTs are all the rage in the digital art scene, with skyrocketing biding prices on NFT auction markets such as OpenSea.
In a metaverse situation, however, NFTs can completely change how people interact with fashion brands and bring about the true ownership of digital fashion items.
Thanks to NFTs, fashion brands will be able to display clothes in a metaverse that can be bought from within the metaverse or traded with other users on a decentralized virtual marketplace. Given that NFTs are traceable and unique on the blockchain, the issue of fake fashion items will be a thing of the past as every digital wearable item will be verifiable on the blockchain.
A new revenue stream for fashion brands
By using NFT in a metaverse, fashion brands will have access to a new revenue stream. Instead of only selling physical products and charging people for every visit to the virtual showroom, fashion brands will be able to make money by selling their virtual items and clothing on a decentralized market. They will also be able to reach out to a larger pool of fashion enthusiasts who will be able to partake without being in physical proximity to the brand. For instance, a fashion enthusiast in a remote part of the world will still be able to enjoy the showrooms and virtual wearable items the fashion brand produces. Distinguished brands will also be able to stand out more with unique editions of fashion and luxury products in the virtual world as well as in the real world. Fashion brands and fashion designers will also receive royalties for secondary trades of their products throughout a Web 3.0 internet.
An environmentally friendly industry
As Gen Zers become more conscious of the environment, the traceability inherent in NFTs will enable fashion brands to give their conscious customers confirmation of environmentally friendly products.
NFTs, therefore, become an easy way for brands to show their customers they are working towards sustainable goals and practices. More importantly, consumers will be able to verify whether a product is truly sustainable or not by checking the NFT's authenticity and origin on the blockchain.
A personalized touch
Fashion brands and independent designers in a Web 3.0 world will be able to connect better with their customers by offering them a more personalized and immersive experience. Customers who are digital natives, as well as millennials and Gen Zers, prefer to associate themselves with brands that offer unique experiences which can't be found anywhere else.
In an NFT-driven virtual world, brands and designers will be able to offer personalized experiences and special editions in an one-on-one manner. Established fashion brands will be able to offer customized clothes for their customers, while smaller brands and independent designers will still stand out by offering limited edition designs. The metaverse through NFTs will continually push the fashion industry into what is known as "the experience economy" where the key value proposition is based on offering experiences to customers as opposed to physical products.
NFTs and Web 3.0 metaverse world allow fashion brands cheaper and creative ways to market their products as they won't have to worry about shipping physical inventory and setting up physical shops or showrooms. Fashion brands will be able to create truly unique shopping and entertainment experiences for their customers.
How fashion brands can prepare for the metaverse
Given the above advantages that NFTs and a Web 3.0 metaverse will offer fashion brands, businesses in the fashion industry need to start preparing themselves now before they risk losing their competitive edge by the time the virtual world becomes a reality.
In the gaming world as well as the digital art space, NFTs are all the rage, with a wave of excitement about the metaverse becoming the talk of the town in both sectors. The fashion industry is no stranger to embracing new frontiers, and the metaverse is poised to become the next big thing for fashion brands that will get their feet wet with NFTs and other Web 3.0 infrastructure now.
About the author:
Lokesh Rao is the CEO and CoFounder of Trace Network Labs and has been working for over 12 years in the enterprise technology space helping fashion companies acquire and implement technology. He has been actively building solutions for enterprises using DLT and Blockchain technology since 2017. With Trace network Labs, the vision is to build a technology platform that will enable Luxury lifestyle brands to launch multichain & multiverse products for the ‘digital twin’ a.k.a. Avatars in the metaverse.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.