Emma Sheppard is a journalist specialising in business, technology, family and social affairs. As well as Canvas8, her work has appeared in The Guardian, Wired, BBC Worldwide, The Independent and more.

Once a signifier of luxury or novelty, custom products and services are now within reach of the everyday consumer, thanks to the rise of artificial intelligence, algorithm-led platforms, and the COVID-era digitisation boom. Today, everyone wants to be the main character of their brand experience. 

Personal Worlds

At London Fashion Week in 2022, Roksanda surprised audiences by launching a sculptural gown as a shoppable NFT, created in collaboration with Clearpay and the Institute of Digital Fashion. 

Charged Retail

 The garment was available in three tiers of rarity and functionality, priced from $34 to $6,800. Roksanda CEO Jamie Gill said the idea appealed as a way to democratise fashion, as well as engage with a Gen-Z audience. “Ultimately it comes down to approaching the metaverse in an authentic way… with accessibility and creativity in mind,” says Nick Molnar, co-founder and CEO of Clearpay. 

Glossy

Roksanda isn’t the only fashion brand attracted to the potential of the metaverse and NFTs. In partnership with The Dematerialised, an experiential marketplace for digital fashion NFTs, Karl Lagerfeld recently released an NFT in the form of digital figurines inspired by the late designer on what would have been Lagerfeld’s birthday. It was the fashion house’s first exploration into the world of blockchain technology, but the higher-priced digital pieces, at €177, sold out after just 33 seconds. “Every time we launch with luxury brands like Karl Lagerfeld, we get people buying their first-ever NFT, and they’re very excited,” says Karinna Grant, co-founder of The Dematerialised. 

Jing Daily

 “Almost 90% of our collections sell out within the first two hours, some of them within the first 15 minutes.” 

Interview with Karinna Grant conducted by the author

Grant says she was “already mesmerised by the potential of digital fashion” when she met her co-founder Marjorie Hernandez, who also co-founded the Lukso blockchain platform, the technology behind The Dematerialised’s NFTs. “Digital fashion is limitless and creative and I could own or access something that I never could in real life,” Grant says. “The NFT part reduces the risk that I’m buying something fake, or tells me the money is actually going to the person who created it. That transparency and sovereignty was very appealing, as well as the cultural zeitgeist.” 

 Grant and Hernandez’s aim with The Dematerialised was to create a new reality for fashion, one that was more empathetic, visceral, and transparent. “We have the opportunity to create new fashion systems,” Grant says. “The physical fashion system is not in a healthy place from a human or environmental perspective. And there are a number of things that digital fashion and NFTs can offer as an alternative, more integrated way to experience, create, and consume fashion.” Canvas8 sat down with Karinna Grant to talk about how brands can build momentum towards a new digital fashion ecosystem for all.

When The Dematerialised launched in December 2020, Grant and Hernandez knew a large number of its users would be new to Web 3.0 and the world of NFTs. Their intention was to build a caring community that supported, nurtured, and educated its customers, to encourage behaviour change. That approach has helped them secure collaborations with brands too. As well as Lagerfeld, they’ve worked with Bad Binch, MCQ, RTFKT, The Fabricant, and more. “Understanding the triggers for different human behaviours is good practice for communicating with people in general but specifically when you’re trying to encourage people to behave in a new way,” Grant says. “Emphatic approaches seem to be more successful.” 

This required shifts to the language used on the site and a move away from the release hype that NFTs are typically known for. “We didn’t want to say buy or shop, we wanted to use invest,” Grant says. “Although NFTs are all about manufacturing scarcity in some way, I didn’t want it to be as overt. And I think maybe drop culture itself is a bit at a saturation point as well.” 

 That’s a mentality championed by one of The Dematerialised advisors, Ana Andjelic, who argues for the use of ‘drip’ rather than ‘drop’ to signify new releases. “Drips reward long game over short-term gains,” Andjelic writes in

. “Drips galvanise communities, incentivise collaboration and membership, and decrease competition. Drips are the opposite of the winner-takes-all; they are decentralised and governed by activity in their communities… They are a new cultural, social, and economic paradigm.” 

The Sociology of Business

That’s much more in line with the ethos behind Web 3.0, Grant says. “It’s way more collaborative than ever before. You see almost direct competitors sharing information, figuring out solutions, creating open-source ideas… we are really trying to put the power back in the hands of the end consumer.” This has impacted The Dematerialised’s approach to customer service and user experience too. “If something goes wrong, we explain it. The customer feels valued, listened to, and understood. We’re trying to make that much more of a two-way process than a broadcast process,” she says, adding that is helping to drive the movement from niche to mainstream. 

Forbes

One third of consumers have already purchased digital fashion

The fashion industry as a whole has been fairly slow to digitise, thanks in part to a long traditional history. But early movers such as DressX, The Fabricant, and Carlings, which won the Cannes Lions award for the world’s first digital clothing collection, have helped raise awareness of the potential of digital fashion among more mainstream brands. 

Campaign

In 2021, Gucci’s first-ever NFT sold for $25,000 worth of ethereum at the auction house Christie’s; Dolce & Gabbana auctioned off a nine-piece NFT collection for a record $6 million; and sportswear giants Nike and Adidas are also getting in on the action. 

Gotham Magazine

The New York Times

Dazed Digital

 Others are showing their intent to move into this space in the future. Hermès is suing the NFT creator Mason Rothschild for trademark infringement for his MetaBirkin collection, for example, arguing that without the court’s action, MetaBirkins could “ultimately preempt Hermès’ ability to offer products and services in virtual marketplaces”. 

Business of Fashion

 Even Selfridges has announced it will sell

Gamers have been buying digital assets for years, Grant says, and indeed many fashion brand’s first forays into this world have been via one of the gaming platforms. Gucci, Ralph Lauren, Tommy Hilfiger, and Nike have all designed digital products for Roblox, while Moncier and Balenciaga have created avatars for Fortnight, and Burberry is experimenting with in-game NFTs to offer skins to virtual avatars too. 

Robb Report

Harvard Business Review

One in five daily active Roblox users updated their avatars on any given day, including the body, face, and accessories. 

Vogue

 “Gamers have been interested in and continue to be interested in curating their identities [online] – you don’t want to have a Noob skin in a game.” Grant says. “It’s still quite a creator-led movement. 3D artists and 3D designers who have both created and consumed are big advocates of this space.” 

 The popularity of virtual influencers, such as 

, has also made digital fashion more of a palatable idea.

“One of the most welcome shifts is that now not every article that talks about digital fashion refers to it as the emperor’s new clothes,” Grant says. “That happened for maybe the first two years. What we’ve started to see more recently is traction around digital-to-digital.” And while a lot of The Dematerialised’s community are crypto natives, Grant believes the traditional fashion customer can also be convinced, given the right technology. “The segment that I’m most interested in converting is someone who does get turned on by the hyper physicality of stores and fabrics,” Grant says. “If we’re able to show these types of consumers a different way to experience something they haven’t before, that to me is true innovation.” 

Karl Lagerfeld recently released an NFT in the form of digital figurines 

In fact, 82% of consumers have already purchased some kind of virtual item and one third have purchased digital fashion (almost half are not crypto users). 

 Bloomberg believes the metaverse represents an $800 billion market opportunity for brands venturing out into new revenue streams, such as direct-to-avatar business models. 

Wunderman Thompson

 Balenciaga has even created its own business division dedicated to virtual goods in the metaverse. 

Grant still thinks the sector is 12 to 18 months away from mass adoption. “The technology’s not going fast enough for us. It’s still niche and super early. But there’s going to be a hockey stick kind of incline and it’s going to happen super fast. Things like cloth simulation being better, augmented reality try-on being more realistic, higher polygon counts… The ideal world would be an open metaverse with interoperability,” she says. “So you buy one pair of Nike sneakers or a certain branded pair of jeans. And then you can take it to different places. We’re nowhere near that from an infrastructure perspective at the moment.” 

 Although, two thirds of people think digital fashion will be mainstream within five years, and many expect half of their wardrobe to be digital over the same timeframe. 

More brands are getting their heads around ROI, Grant says, plus there are sustainability benefits that fit in well with ESG objectives. “One of the attractive things about digital is the scaling or the multiplicity of that piece is instantaneous. And it obviously has a lower kind of impact from a production perspective on the environment… One question we don’t have an answer to yet is the impact on the physical sale. If brands invest a lot in creating a digital revenue stream from digital assets, will people stop buying physical pieces and just buy digital? I think we’re too early in the scene to predict that. But anecdotally, we know our customers have more items in their digital wardrobe than they do in their physical wardrobes, and they’re much more adventurous [there] than in real life.” 

Gucci, Ralph Lauren, and Nike have all designed digital products for Roblox

The Metaverse and NFTs provide an opportunity to connect with new audiences in a new ecosystem, and build brand loyalty in an accessible way. It doesn’t always have to be high fashion either – the top-selling Roblox digital fashion items in 2021 were casualwear, like T-shirts and face masks (although experts predict we’ll see new categories of clothing emerging, rather than just recreating what we wear IRL). 

 Younger generations really get the potential of this, Grant says. “There are certain brands we’ve been talking to for a year and a half. Quite often what makes them flip is they go home and ask their child, should I do this project? And the child says yes of course.” Beyond just collaborating on existing platforms, interest in branded metaverse worlds is also high – 41% of Gen Zers and 38% of Gen Yers said they’d be interested in exploring them. 

Web 3.0 and the metaverse also allows brands to add new digital layers to their physical shopping experiences. Nike, for example, added a Roblox element to its NYC flagship store, Fred Segal has added digital skins, crypto art, and NFTs alongside its physical items, and RTFKT and PlattformE offer options for NFT holders to get physical versions of their digitally owned products via 3D printing. 

 The potential for a more interactive and personalised shopping experience is likely to go down well with shoppers – 64% of consumers say the ability to personalise an item would positively influence their purchase decision. 

 Grant says the possibilities are endless. “I think it’s crazy that more brands aren’t utilising the AR markets via Instagram or even web-based AR. I would love to be at a fashion show and hold my phone up to one of the garments to see the sketch from the artist who made the piece for example. Just thinking of the different layers of an onion and using AR as a way to unlock that. It's a missed opportunity for storytelling that people aren't really grasping. Or opening up a brand’s archive – there are certain things in history that I would like to try on or own digitally that I could never wear or afford to purchase physically. That kind of access element is really interesting and a way to develop new relationships, as well as providing a revenue stream the brand or creator can be in control of, which is quite rare,” says Grant. 

Momentum is building around digital fashion, but the more brands that experiment in this space, the more customers will be open to experimenting too. Grant sees interoperability being a key factor in adoption, and it’s coming. “We’re going to have more places to wear [digital fashion],” she says. “There will be more digital environments that are easy to get into, more enjoyable cultural points where we can merge music, fashion, art, all in one place. There’s going to be a convergence of that. More brands experimenting in this space will mean more choice and more people saying ‘oh that’s cool, I love that brand, I’ll try it with them’.” It’s set to be a lucrative opportunity – up to $20 million worth of NFTs are sold each week, and two thirds (70%) of people say they’re prepared to pay the same or more for a virtual fashion item (compared to the physical version). 

EarthWeb

 “There is a first-mover advantage right now too, as there are so few fashion brand NFTs in the marketplace,” Grant says. 

 of consumers have already purchased some kind of virtual item

 of Gen Yers say they’d be interested in exploring branded digital worlds

active Roblox users updated their avatars daily, including the body, face, and accessories

The Dematerialised has prioritised nurturing and human connection to help its users engage with new tech

NFTs, the metaverse, and digital fashion are moving beyond gaming spaces into the mainstream

Interoperability issues and technological restraints means there is work to be done before mass metaverse adoption

Karinna Grant is the co-founder of The Dematerialised and a fashion digital strategist, teaching at London College of Fashion and ESCP Europe Business School, among others.

Global

Fashion and Style

Technology

The digital fashion ecosystem is growing exponentially, but what opportunities does the metaverse and NFTs offer for brands? Canvas8 spoke to fashion digital strategist Karinna Grant from The Dematerialised about building an alternative way to experience, create, and consume fashion.

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