The metaverse is on everyone’s lips! It could be described as a three-dimensional version of the Internet, as an interactive, creative, digital environment in which people work, play, make contacts and shop. While this is still very much in the future, interest in the potential of the virtual parallel world is huge. For brands and the fashion industry, the metaverse offers new opportunities to appeal to Generation Z and other young consumers with an affinity for technology. Young people from Generation Z in particular, who were born between 1997 and 2012, spend a lot of time online and are investigating the possibilities of the metaverse. On behalf of the trade magazine TextilWirtschaft, the market research company YouGov carried out a study to ascertain the extent to which the market is open to virtual shopping. The result: 10 per cent of those surveyed would like to shop in the metaverse. The greatest interest came from the 18- to 24-year-old age group, followed by 35- to 44-year-olds.
But how will Internet 3.0 shopping take place? Essentially, there are two business models: you either sell physical items of clothing – like in an online shop, or you offer digital items in the form of non-fungible tokens (NFTs). NFTs are unique digital (asset) items whose authenticity and owner can be unambiguously verified thanks to hugely complex blockchain technology and that are bought, sold and exchanged in the metaverse, often with cryptocurrency. Or to put it more simply: NFTs are extraordinary collector’s items. Even though this may all sound fantastic in the double sense of the word: a lot of money can be earned in the metaverse. According to Morgan Stanley, digital demand for fashion and luxury brands will grow from its current low level and provide the industry with additional turnover of 50 billion dollars by 2030.
It is therefore no surprise that numerous luxury, lifestyle and sports brands are already present in the metaverse and are offering their products there: Adidas, Balenciaga, Hugo Boss, Dolce & Gabbana, Gucci, Tommy Hilfiger, Ralph Lauren and Nike, to name just a few. For example, “Nikeland” in the Roblox universe offers its users digital sports and gaming ideas, enabling them to kit out their avatars with Nike equipment. In the survival game Fortnite, avatars wear outfits from Balenciaga. Gucci has succeeded in selling the digital Dionysus bag in the metaverse for around 800 US dollars more than the real-life item.
In spring, the first Fashion Week was held in the metaverse: runway shows, after-parties, immersive experiences, shopping, panel discussions and much more could be experienced by visitors on Decentraland. With over 60 participating brands, artists and designers, it was a milestone in the global fashion industry.
Facebook founder Mark Zuckerberg is working flat out to implement his metaverse. In May this year, the first Meta Store opened in California. It aims to show people what is possible with the right hardware and simultaneously provides a glimpse into the future when the metaverse is brought to life. In the Meta Store it is possible to establish a connection to the metaverse and to gain an impression of how we will act in the virtual world in future. At the end of August, he presented an image of his metaverse to the public at the launch of his 3D world “Horizon Worlds” in France and Spain. However, the response was crushing and he promised to make improvements.
What does this development mean for brick-and-mortar retail? The attention that brands are already attracting in the metaverse will have a positive effect on brick-and-mortar shops. Should virtual fashion establish itself permanently, both worlds can exist alongside one another. After all, brick-and-mortar retail will retain its unique benefits, already evident in comparison with traditional online shopping: the look and feel of items of clothing can only be experienced in person. A study by international consulting firm pwc determined that 18- to 24-year-olds visit brick-and-mortar shops most frequently. Around 60 per cent of Generation Z state that they make purchases in retail stores at least once a week. It is important to them that they are able to quickly and easily orientate themselves in the shop, that fast and simple payment methods are on offer, and that there is free Wi-Fi with an uncomplicated login process. In addition, there is the personal contact between sales staff and customers, which – I am utterly convinced – no avatar can replace.