Fashion labels are using the metaverse to expand their brands across the world
High street brands and luxury fashion houses have both jumped headfirst into NFTs over the past six months. Just this year, adidas, Nike and Gucci have generated NFT sales of $137.5 million. Dolce & Gabbana’s digital auction brought in $6 million alone. These numbers may not amount to much for
Why has the fashion industry gone all-in on NFTs? At first, the two spheres don’t seem to overlap naturally. Fashion is made up of embodied things, like clothing, catwalks and supermodels. NFTs, on the other hand, are stored electronically, on a blockchain made up of a million computers that talk to each via satellites and cables.
But then you hear about celebrities buying virtual islands for $2.9 million and you realize the market for extravagant displays of wealth is not bounded by the mere physical world. The social norms that govern the lives of people on web2 – flexing, self-marketing and gorging on attention – will still exist as we move to web3.
And this is where fashion brands come in. From Gucci and Louis Vuitton to Nike and adidas, there’s a burgeoning market for NFT icons and wearables. But is this market built on speculation and bound to crumble when people move onto the next thing? Or is there a different future that fashion labels are already planning for?
Follow the money
A useful way of looking at fashion NFTs is to consider them not as digital wearables but as another marketing stream which brands can use to put their products in front of a paying audience.
Adidas recently entered the metaverse by joining up with The Sandbox. The clothing apparel company has its own area on the platform called the AdiVerse. The label launched its NFT collection in December last year and quickly minted all 30,000 of them. It’s now possible to buy one on OpenSea for $3,100 (1.125 ETH).
Taking a look at the smart contract data, we can see that since the NFT launched in the week beginning December 13th 2021, its overall trading volume is just over $93 million. The chart below shows that well over 50% of that volume came in the first two weeks after launch. But even last week, around $1.6 million changed hands in trading for this NFT.
In September 2021, Italian fashion house Dolce & Gabbana teamed up with UNXD and sold its NFT collection at auction for just under $6 million. The Glass Suit, designed by Domenico Dolce and Stefano Gabbana themselves, brought in over $1 million (351.384 ETH). It’s the most expensive suit Dolce & Gabbana has ever sold and the internet penned a thousands column inches about it.
Last December, Nike bought NFT studio RTFKT. This February, the partnership released a series called MNLTH. As part of this series, a mysterious branded box was airdropped to holders of Clone X NFTs. Clone X is an NFT collection by RTFKT and Taskashi Murakami, a Japanese contemporary artist. The airdropped box, with its unknown contents, is currently on sale on OpenSea for $12,325 (4.5 ETH). Fans eagerly discuss what could be inside. And all the while, Nike receives free marketing.
One more collection that highlights the vast sums of money fashions brands currently generate with NFTs is the Gucci x SUPERPLASTIC collaboration. Branded SUPERGUCCI, the partnership minted ‘a three-part series of ultra-limited NFTs’. The partnership produced 500 of them and the teddy bear-like figures have a floor price of 6.75 ETH ($18,487) on the secondary market. People holding the NFT on May 25th for the hour 4:20 – 5:20 PM ET will receive a real, physical handmade ceramic sculpture. This is a good example of the embodied and digital worlds crossing over and something that more companies might look to use for marketing purposes.
It’s pertinent that the four examples above are partnerships. They’re collaborations between a new, dynamic studio and an established corporation looking to superimpose its product onto something that signifies youth and ingenuity. In the end though, they’re big brands using their vast resources to sell sneakers to kids.
Where will this lead?
Ultimately, this question will be answered when we know if wearable and fashion NFTs are anything more than the latest hype. They’re popular at the moment, and therefore expensive. But when the next flexing opportunity hits the market, what will be the future for NFTs in the fashion industry?
Once place to look is the gaming world where avatar skins are big business. Fortnite inadvertently revealed that it made $50 million from just one range of NFL-branded skins. League of Legends, which makes a lot of its money selling in-game assets, skins and gift bags, made a reported $1.75 billion in 2020. With the online gaming community reaching 3.24 billion people in 2021, the market is there for boutique and established NFT fashion designers to move into.
The main way, though, that fashion brands will take advantage of the metaverse is by being a prominent and pervasive presence inside it. The industry has always been about advertising. And soon, there will be no better way of advertising than a direct line to our minds via VR goggles and the singularity-bridging Neuralink brain chips. NFTs are just one small step in the marketing plan.