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Is Digital Fashion Still in Fashion?

In the last couple of years, crypto crashed, NFTs fell off a cliff and metaverse-mania fizzled. We asked those working at the forefront of digital fashion about its future.

digital fashion

Photo: Courtesy H&M

A few years before the pandemic, the future of fashion began to feel very close. There was Lil Miquela (rings a bell right?), a CGI influencer created in 2016 as an Instagram account that grew to over a million followers in under two years. In 2018, Scandinavian retailer Carlings released a digital clothing collection in partnership with Virtue Worldwide that sold out in a week. By 2022, Gucci, Balmain and Prada had sold digital or phygital fashion as NFTs, and there was a pretty well-attended Metaverse Fashion Week.

But that same year, crypto crashed. NFTs fell off a cliff. At the moment, it feels like the metaverse has been slightly forgotten and everyone’s worrying about AI taking their jobs. How has this downswing affected fashion’s pixelated dreams? Is digital fashion still in fashion? And what do brands need to do in order to engage with the space in a genuine manner? We asked those working at the forefront of the digital fashion industry to lay it out.

Leanne Elliott-Young, CEO and co-founder of the Institute of Digital Fashion

digital fashion

Photo: Leanne Elliot-Young

Digital fashion is a great solution when it comes to some of fashion’s sustainability and diversity issues. The beauty of a digital asset is in its endless possibilities — both in the hands of the creative as well as the audience. I think initially we were all excited about it because it looked like a direct answer to physical fashion’s pain points. We had a vision that technology would come on leaps and bounds.

But then what’s happened post-Covid is that actually everyone is so rejoiced that we aren’t locked down, that the idea of metaverse spaces elicits a knee-jerk reaction. Everyone’s moving away from it.

But digital fashion is not a trend — it’s a tool. It can add layers. If you’re just making a twin of something that’s physical, you’ve already failed. No one’s going to feel it the same way. It has nothing to do with the vernacular of physical fashion, which is so steeped in craft and artistry. And it can’t express or play with the real possibilities of digital because it’s a twin.

Everyone’s like, ‘Oh, digital fashion is dead.’ But if you look at all the amazing statistics on Roblox or Fortnite — in 2023, Fortnite got $204 million in developer payouts, a 300 per cent increase from the year before — that is a really interesting point for the trajectory of digital fashion. It’s always been within gaming and now we see physical and luxury fashion stepping into that space.

And that’s another opportunity for us to create change: how can the creators get paid more? Historically in fashion, there’s been this really top-heavy payment structure where you work for accolades and internships. Whereas UGC (user-generated content) is a massive part of gaming, where people are earning real wages when creating. Gen Z and Gen Alpha understand creativity in this really nuanced way, which is about co-creation. And the bigger brands and luxury fashion houses are so scared of co-creation that I think they’re at risk of missing out.

Matt Powell, retail analyst at BCE Consulting

Matt Powell, retail analyst. Photo: Matt Powell

The big driver behind NFTs was the idea that everybody was going to get rich. And of course everybody can’t get rich. So I think very quickly people lost interest because there was just so much counterfeit going on and people weren’t making any money. In addition to that, we learnt that maintaining an NFT uses a tremendous amount of energy.

I don’t think any brand or retailer really figured out how to monetise them and how to make that connection between the physical and the digital product. So it’s played itself out. There’s certainly not the interest that there was a few years ago.

Brands and retailers want to get closer to their consumer; to understand them better. They want to develop a one-on-one relationship with them. And so they’ve got to figure out ways to do that. But I have not heard of any new big idea, like NFTs was, that is going to drive the marketplace at this point.

Mason Rothschild, founder of digital creative agency Gasoline

Mason Rothschild, founder of digital creative agency, Gasoline. Photo: Antoine Spignardo

Right now, people are really picking and choosing carefully where they’re spending their money and their purchasing power as consumers. It has become clear that the idea of a Web3 utopia hasn’t quite caught on the way people had hoped.

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