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January 03, 2023 5 min read
Have you ever wondered how the world has become a global village after the discovery of the internet? The Internet has made easy the use of social media that has allowed people to engage with one another quickly. After its great success, now Web 3.0 is here to create a completely new virtual world, known as the Metaverse. According to experts, people will be able to get more than just basic knowledge and build mutual connections in this new digital setting; and will experience a real virtual reality immersion.
According to research, now the "Users' avatars will dress in clothes and possibly also watches and do tasks to represent people in an immersive experience, just as we do in the real world – which has opened up a huge potential for luxury brands.
So how are luxury companies trying to enter the world of a metaverse to reach a new audience? Let's find out about it!
Generally, the Metaverse comprises two words: Meta, which means "beyond," and verse, which comes from the term "universe." The Metaverse is the new world where the digital and physical worlds gradually collide. It's a fully interactive environment with 3D Virtual Spaces that work just like real life. Epic Games has just announced the completion of a $1 billion investment to support its long-term metaverse goal.
There is still a need for an actual explanation of the Metaverse that truly defines what it is all about. However, this does not stop famous companies such as luxury fashion companies from entering this exciting new market.
How are luxury brands seizing the opportunity?
According to Mark Zuckerberg,
"Avatars will be as popular as profile images, but instead of a static image, they'll be live 3D representations of you, your expressions, and movements that will enable interactions possible." You'll most likely have a photorealistic avatar for business, a stylized one for socializing, and perhaps even a fantasy avatar for gaming. You'll have a virtual wardrobe of outfits for various events, made by various designers and sourced from various applications and experiences."
Metaverses world is dominated by gaming, and high-end companies have already entered this massive industry. They present their newest inventions on gaming avatars via digital clothes and accessories.
Since the epidemic, several well-known luxury companies have started cooperating with the gaming sector more frequently. Last year, Valentino presented its 2020 Spring & Summer Collection in Nintendo's "Animal Crossing: New Horizons" game. Gucci also designed and produced four sportswear lines for the Tennis Clash characters.
Most virtual luxury products have already been sold in limited quantities, and customers have received an NFT (non-fungible token) as proof of ownership.
Users will transport attire, accessories, and home décor from one platform to another (for example, from Fortnite's gaming world to Meta's reality) in the Metaverse.
Morgan Stanley analysts estimate that the market for virtual luxury items might be worth $50 billion by 2030.
Despite metaverse uniqueness, several top companies support its development. This is because a Metaverse mimics a real-life community, and companies may tailor it to fit their image. Many experts hope this will become a new way to interact with Gen Z.
Why do luxury brands need the Metaverse Market?
Many luxury companies were afraid of anything that reflected the digital or internet revolution in the past. Until the epidemic, this industry stuck to its strict norms and dealt with customers directly. However, when the health crisis worsened, they were forced to modify their strategies. These brands have accepted the latest digital advance and have left old traditions after seeing the current metaverse success.
Gucci and Vans, for example, have already established their virtual worlds. In addition, Rimowa, a luggage company owned by LVMH, is preparing to auction its first-ever NFT items in the Metaverse.
The Metaverse provides growing opportunities to embrace in the future decade, according to Mario Ortelli, the Managing Partner at Ortelli&Co and Luxury Society Columnist. How luxury businesses establish and operate in the digital realm now may define their future success in the years ahead; therefore, we should start interacting and gaining experience with it now...
DWISS is the first company introducing a genuine watch collection as NFT that will later became available in the metaverse, where users will be able to wear their DWISS watches in their avatars, what was Swiss made watches from the microbrand company will now be also Meta made.
Physical and Online presence
Nowadays, everyone needs to have two distinct public personas: physical and online. While every top business tends to have a physical presence, some of them do not give importance to their online presence. On the other hand, online identities will be equally significant as real-life personas in metaverses. As a result, businesses will be encouraged to develop digital accessories and clothes.
New emerging market
Generation Z is currently in charge of the Metaverse's creation and growth. These digital natives, who are fascinated by virtual worlds, are most likely to indulge in high-end digital fashion in Metaverses. Luxury companies need to keep a careful eye on this new customer realm and tailor their tactics appropriately to compete in the modern virtual world.
Balenciaga, one of the top fashion houses located in France, debuted their 2021 Fall & Winter Collection in the video game "Afterworld: The Age of Tomorrow." It used gaming as a platform to promote new one-time-use fashion goods.
It is interesting to note that no raw resources are used to produce luxury items for the Metaverse world; therefore, labor is minimal. That means that practically all earnings will come from selling virtual garments and accessories. Designers also have a lot of creative freedom when it comes to designing virtual items because the restriction imposed by the commercial industry doesn't apply to virtual products.
Limited carbon footprints
The luxury garment industry is under great pressure to reduce its carbon impact and implement sustainable practices. Luxury businesses may continue to create their legacies while adhering to green living principles by using Metaverses. They can produce as many digital gears as they like while causing minimal environmental damage.
Fear of missing out
Although the internet's metaverse vision still looks imaginary, companies ranging from Ferrari to Nike to DWISS are already pouring in to experiment and working on developing a following, partly out of fear of missing out.
Fake products are still a serious challenge for high-end fashion houses. This problem can easily be overcome in Metaverses. Luxury companies can follow their items and find out if any fakes products are circulating by trading them as NFTs. It is interesting to note that fake items cannot be sold in Metaverses since ownership data are preserved in Ethereum.
When it comes to the question of the future of brands in the Metaverse, it's clear that they're serious about it. Many modern brands place a high priority on digitization. Even before the product or service is launched, they develop a digital brand. Luxury companies need to compete in the new digital setting, with the Metaverse playing an important role. To generate new experiences, they must begin building NFTs and digital products. They must perceive the Metaverse as an opportunity to reach out to a new audience and grow their businesses.
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