A new market study published by Global Industry Analysts Inc., (GIA) (a market research company) called Metaverse – Global Market Trajectory & Analytics, reveals that the global market for metaverse estimated at US $ 194.4 billion in 2022, is projected to reach US $ 758.6 billion by 2026. In this report, we aim to highlight the various opportunities for retailers, as the metaverse gains prominence, and how the ‘meta-economy’ will unlock new product opportunities, commerce capabilities and distribution channels in the near future.
In today’s day and age, if you have not heard of the word ‘metaverse’ at least once, then you probably belong to the minority population of the world.
But all that is changing, thanks to giant tech players immersing themselves into the space.
In October last year, Facebook made headlines when it changed its name to Meta, directly mirroring its intention to evolve from a social media company into a metaverse company – a clear signal into the future. In just a matter of weeks, Microsoft announced its own metaverse in November.
Titled Mesh, the space is part of the company’s plan to occupy a huge chunk of the pie called the virtual workplace.
But it does not stop here.
What started off with the tech space has quickly filtered through various industries – fashion being one of them.
Brands are already experimenting with the virtual world as a key communication and engagement channel in terms of new collection drops, store openings, in-game purchases, et al.
Nike has filed patents for digital goods, such as its impending ‘crypto picks’ or digital sneakers that are intended to be sold as NFTs. The sportswear giant will also be launching a Metaverse Studio and is already recruiting for its ‘meta-force’ or the metaverse workforce.
Interestingly, a new market study published by Global Industry Analysts Inc., (GIA) (a market research company) called Metaverse – Global Market Trajectory & Analytics, reveals that the global market for metaverse estimated at US $ 194.4 billion in 2022, is projected to reach US $ 758.6 billion by 2026.
The metaverse is essentially an integration of immersive presence in a virtually interactive self-sufficient ecosystem of mobile networks, augmented reality, social media, gaming, virtual reality, e-commerce, cryptocurrency and work environments.
The report highlights that this virtual universe is being envisioned as the future of the internet, involving the convergence of augmented reality (AR), virtual reality (VR) and physical worlds in a shared digital space.
In this regard, a transition to metaverse is imminent.
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Several components and facets of this open-source platform have advanced to a stage where they can be seamlessly integrated to explore the possibility of creating a parallel virtual world.
Furthermore, NFTs and online events are booming – creating a universe of opportunities for the metaverse and related technologies.
The global market for metaverse is and estimated at US $ 194.4 billion in 2022, is projected to reach US $ 758.6 billion by 2026 – Metaverse – Global Market Trajectory & Analytics report
In the case of designers and fashion brands, the metaverse is free from the two-dimensional barrier of the physical world, offering unlimited potential for creators and commercial businesses. As users look to establish their digital identities, fashion will play a key role in this space.
In this report, we aim to highlight the various opportunities for retailers, as the metaverse gains prominence, and how the ‘meta-economy’ will unlock new product opportunities, commerce capabilities and distribution channels in the near future.
Leveraging the rising trend of NFTs
The term NFTs might still sound puzzling to many readers. In a nutshell, NFTs or non-fungible tokens are virtual, non-exchangeable proofs of ownership for digital items. These can be, for example in the fashion context, avatars or digital outfits that you can wear in games, but also virtual works of art or pieces of music.
NFTs are anchored in a blockchain system, which records who the owner of the digital asset is and where sales transactions are registered. They can be bought with cryptocurrencies, such as bitcoins, and also with dollars or euros.
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The first NFT dress, designed by Dutch company The Fabricant, was sold in 2019 for the equivalent of €8,120. After what was assumed to be a cool-off in the second half of 2021, Q3 saw NFT trading volumes rise by 704%decentralized (US $ 10.67 billion) from the previous quarter.
NFTs have opened the gateway to crypto’s place in the wider consumer narrative, with one-of-a-kind digital collectibles representing a unique asset.
Today, they have come to define the cultural landscape, with everything from decentralized domain names and virtual gaming items to tweets and memes being minted and sold.
As confidence around NFTs grows and digital tokens integrate into mainstream culture, new opportunities to combat counterfeits and build lasting engagement are emerging in the form of digital souvenirs, tokens-with-purchase and digital collectibles that brands can share with their clients.
POAPs as Digital Souvenirs
Proof of attendance protocol tokens or POAPs are digital souvenirs that are essentially free NFT ‘badges’ available on the xDai chain, a greener sidechain of Ethereum. There are multiple versions, but POAP is the most trusted protocol amongst Web3 communities.
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In recent times, POAPs are becoming increasingly popular amongst event holders and in Web3 communities.
Initially designed so that users can bookmark life events (like a Facebook for blockchain), the worth of POAPs can also be explored in a commercial setting.
In the past, brands such as ATARI, virtual concerts (such as Decentraland Metaverse Music Festival) and satellite events such as NFT NYC, have leveraged the power of such souvenirs, where local venues and vendors created a POAP ‘treasure hunt’ that led to raffles and drove offline and online business.
What will POAPs mean for fashion and retail?
POAP tokens build on familiar retail strategies, wherein they can be utilized as a gift-with-purchase for limited edition product drops, special edition product releases or can even be gifted to attendees of virtual and IRL events, such as sales, conferences, concerts, talks, activations and in-store events specific to a brand.
When a brand or host makes a POAP, they are able to freely promote their event on the POAP calendar, which can be accessed by the public and the POAP community.
Digital tokens link to a database, create brand loyalty and capture data points. For brands, POAPs can fast-track community engagement, as POAP allows for a range of integrated services such as private members-only chat rooms and raffles or competitions.
Gaming and the limits of fashion
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The amalgamation of the world of gaming and fashion, offers unlimited opportunities for creativity to brands and retailers, which is set to surpass the physical limits of the fashion industry.
“They’re trying to mirror, or make a simulacrum of what we already have in the real world, and bring it into the game. But the space of the metaverse allows you to change physics. You don’t have the same kind of constraints,” William Easton, from Future Games, said on the live webinar The Metaverse: where fashion and gaming collide hosted by TDFGA in partnership with Parsons N Ventures.
Daniella Loftus, from This Outfit, Does Not Exist, added: “In the physical world, I might wear an avant-garde dress, but it is tied to my physical form. I’ve been born with a set of determined biological characteristics.” Even wearing physical garments to cover or hide certain characteristics, we are still tied to that. As Loftus concluded, “In the virtual world, your avatar is constructed by you, it can look how you want it to, it can express anything that you feel needs to be expressed.”
The unlimited opportunities of the metaverse can be explored by fashion and gaming designers when working in collaboration.
In this regard, fashion doesn’t have to be part of the game it could be using the tools the gaming industry created to create other experiences.
Gaming can be viewed as one part, but gaming engines interconnected with good avatars and really good fashion is where the future should be.
We are at the very beginning of the discussion about the endless creative opportunities for designers and fashion professionals in the metaverse.
Decentralized commerce
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If the decentralized finance boom resulted in consumers seeking a more fair and cooperative alternative to traditional structures, then decentralized commerce is where this viewpoint meets trade.
In traditional forms of e-commerce, buyers and sellers will often need to pay third-party intermediaries or arbitrators to manage risk and trust. These intermediaries could be Amazon, Etsy, Meta (Facebook), eBay, PayPal, Shopify or any other such e-commerce giant that performs a sales exchange while offering a guarantee of security.
At the same time, these intermediaries do not come without their share of downsides. Many big players have a stranglehold on market pricing, distribution networks, payment options and supply chains. And additionally, vendors face fees, product category restrictions and branding visibility, and autonomy issues.
Furthermore, ethical considerations may also emerge as a problem.
In this regard, decentralized commerce proposes a solution.
Although still in its initial stages, it will address the above through multiple avenues of accountability, stakes and commitment, i.e., traceable blockchain tech, AI, opt-in data sharing and smart contracts that form mutual security between seller and buyer, all of which will be hidden from the user in the backend.
That being said, what are some of the skills designers should develop to be ready to leap into the metaverse? To this, Sean Chiles, Co-founder of The Digital Fashion Group, aptly said, “in addition to the digital mindset, fashion designers have to be able to translate the emotions that arise when researching the zeitgeist, and working with physical elements such as fabrics, technical trimmings, etc. This is the connection to the physical. Learning to work with it and blend the real with the unreal, is the primary skill I think that fashion designers need to know how to transition into a new digital reality for the future.”