The non-fungible token (NFT) market is booming right now. Future forecasts predict that it would only get hotter. The advent of the Metaverse has opened the way for luxury brands to reach out to their consumers. As the production of NFTs begins to create new avenues of fashion consumption and exhibition, more premium brands are jumping on board. The early movers have proved the concept and new brands are investing in their new digital collectibles.
The Origins
The Metaverse is an environment where people can interact with each other and with digital objects through personalized avatars. It is a groundbreaking concept that has gained adoption. Analysts and experts believe it still has room to grow. More people continue to move online, driving the demand for digital fashion and goods higher. The spaces available presently create opportunities for luxury brands to benefit from digital collectibles and the rise of social gaming.
We started with Web 1.0 which allowed people to simply connect to information sources. A static website doing nothing but display information sufficed. Web 2.0 was the iteration of social media and facilitated a new wave of connection. Web 3.0 is a complete transformation. With web 3.0 comes new concepts such as decentralization and token economy. Within this new digital world, people would experience immersion in virtual reality.
Mega Opportunities for Premium Brands
Personal avatars that users create would put on clothing, and use items that depict their personal expression. This would be just the same way they would in real life. This brings exciting opportunities for premium brands whereby the consumers identify with their brands.
A good example of this is ROBLOX. Within this gaming and creation system, one out of five players change their avatars on a daily basis. Just the same way a person gets dressed every day. They buy gears and other accessories for their Avatar. Other platforms like Fortnite already provide insight into what it would look like for the metaverse to have malls. The digital line of Fortnite fashion apparel can be purchased with in-game currency.
Gaming experts predict that digital asset investments can bring in additional revenue to the luxury goods market.
Comparing Revenues of Physical and Virtual Channels
Even though real-life still maintains a capital on luxury brands, since most consumers wear physical clothing, the success of the likes of Gucci is a precursor of what is achievable. Brands that are not accustomed to selling digital expressions of their goods would devise different ways to tap into NFTs.
Since the time luxury brands have made an initial move, it has been a huge success. Experts are of the opinion that by the time the Metaverse has fully developed, brands that fit into the category of soft luxury would have a profitable position within the market.
On the other hand, premium watches and jewelry brands could find it more difficult to get the same level of success that they have in the physical world. Furthermore, metaphors can help brands to expand their audience. Looking at the current demography of ROBLOX players majority of them are teenagers. 70% of sales in the fashion industry is contributed by women. As a result, metaverse luxury brands have the opportunity to attract more customers of a new age group that would not have been possible in the past. This further increases the attractiveness of an immersive internet. As the internet becomes more robust, it would support more experiences and possibilities.
