Keywords

1 Introduction

Much has been said in recent months about the new virtual world termed the Metaverse. The more sceptical warn that it is only an incipient concept and that the excessive volume of media noise surrounding it is due to the impact of the renaming of Facebook to Meta, the announcement of which by its CEO, Mark Zuckerberg, was part of a strategy to deal with the colossal reputational crisis then faced by the world’s most important social network. The more enthusiastic, on the other hand, argue that virtual worlds already exist, in which users spend hundreds of hours enjoying live concerts and online games and that, although we are still, at present, at the beginnings of this 3D interactive digital space, the Metaverse could be a trillion-dollar market by the end of this decade (CB Insights, 2022).

Some 87% of social media users are still unaware of the meaning of the Metaverse (DataReportal, 2022). However, two decades ago only a minority believed that the Internet would become the essential tool it is today. In any event, the Meta metaverse attracted three hundred thousand users in just three months (Galeano, 2022), and the virtual reality, augmented reality and extended reality market is now worth thirty billion dollars, and the value of the Metaverse industry is projected to reach eight hundred billion dollars in 2025 (Fernández, 2022).

The term itself is so new that it does not even appear in the dictionary of the Royal Spanish Academy. The Cambridge dictionary defines it as a virtual world in which human beings, as do avatars, interact with each other in a three-dimensional space that imitates reality. For Zuckerberg, it is a virtual reality structure destined to supplant the Internet, which merges virtual and real life and creates endless new playgrounds in which almost anything imaginable can be done (Zuckerberg, 2021). Among the academic definitions we can highlight Mark W. Bell’s description of the virtual world: “a synchronous and persistent network of people, represented as avatars, facilitated by networked computers” (Bell, 2008, p.2) and the most recent definition provided by Carina Girvan:

“Shared, simulated spaces which are inhabited and shaped by their inhabitants who are represented as avatars. These avatars mediate our experience of this space as we move, interact with objects and interact with others, with whom we construct a shared understanding of the world at that time” (Girvan, 2018, p. 1099).

There are many definitions, but all describe a hyper-interactive and persistent digital environment in which users live an immersive experience in real time, where almost any physical world activity can be replicated (work, play, attending concerts, buying a house, visiting a store), but in a virtual way, because the inhabitants of this new world interact with their environments through a digital identity that represents them: the avatar, or their virtual alter ego.

The Metaverse concept is so broad that it can be extended to social media, augmented reality, virtual commerce (v-commerce), video games and non-fungible tokens (hereinafter NFT), which means that many brands began to explore these spaces even before the term itself became popular. Prada, Farfetch and Mango have experimented with augmented reality in their online fashion sales; Zara, Balenciaga and Ralph Lauren have created virtual worlds; and Gucci, Nike and Dolce & Gabbana have sold NFTs. However, beyond the buying and selling of digital fashion items, the Metaverse is also a new channel that offers different shopping experiences, new client services, events and presentations of collections in virtual fashion shows.

In any case, until now the Metaverse is still a vision, not a specific technology. This creates an ambiguity that, for many companies, can be a challenge when it comes to deciding how to take advantage of the potential opportunities it presents. To date, just a few sectors form the vanguard, for example, video games, which have led the way and attracted a large public following, followed by other industries such as music, real estate, beauty and fashion, on which the present work focuses.

2 Navigating Towards the Metaverse: The Archaeology of Virtual Worlds

“This is the Oasis. A whole virtual universe. You can do anything, be anyone, without going anywhere at all” (Ready player one, Steven Spielberg, 2018). Not long ago, it was only possible to experience this oasis in fictional scenarios, such as in the novel Ready player one (Ernest Cline, 2011), or in the movie that brought the story to the screens. On October 28, 2021, Facebook, the social network that in the previous fifteen years had changed global personal and business interactions, and that had the highest number of active users in the world (more than 2,900 million, according to DataReportal 2022), changed its name to “Meta”. According to Zuckerberg, the new name reflects an aspiration to transform and orientate the company towards the Metaverse, to lead the way towards the virtual worlds that, in his opinion, will dominate the technology by the end of this decade (Zuckerberg, 2021).

However, it is not a new term created by Meta. It appeared for the first time in the cyberpunk novel Snow crash (Neal Stephenson, 1992), as a description of an imaginary world where avatars of human beings interact in an alternative 3D environment to escape a dystopian reality. The term Metaverse is nothing more than a new way of describing the cyberspace referenced in the foundational novel Neuromante (William Gibson, 1984), a place inhabited by identities that exist only within the computer network. The main novelty of the book Snow Crash was its use of the term “avatar” (the earthly incarnation of a god in Hindu mythology) as a graphic representation of a digital identity associated with a user within a virtual world. The term avatar quickly spread in the realm of multi-user role-playing games (known as MUD, multi-user domains or Multi-User Dungeon, this in reference to the popular Dungeons & Dragons role-playing game). Thereafter, we had the first nonfiction experiment, Second Life, in 2003, a virtual community that didn’t quite work, because the technology wasn’t ready and, possibly, neither was the public. Thanks to the success (largely in the media) of Second Life, knowledge and use of avatars became widespread, and what was born as a science-fiction concept became a reality experienced by millions of people around the world (Márquez, 2008).

Over time, digital environments have transformed from linear, transaction-focused spaces to multidimensional, experiential, collaborative virtual worlds. We now have many metaverses/virtual worlds, but they are not yet connected. When today’s “protometaverses” evolve, social interactions will take place in a network of open, connected digital worlds, which will change the way we relate, work, shop and live. Unlike the oasis’s centralised metaverse, the major technology players believe that the Metaverse should be an open and interoperable ecosystem, and not be monopolised by only a few companies. Where Zuckerberg spoke of “the economy we will build together” (Zuckerberg, 2021), Roblox co-founder Neil Rimer claims that “the energy around the Metaverse will come from users, not the company” (Sun, 2021); and the CEO of Epic Games, Tim Sweeney, emphasised the human component of a Metaverse that cannot come from any one industry giant, “but the crystallization of the co-creation of millions of people” (ibid), in the form of content, game programming and virtual fashion designs.

The Metaverse is not only interesting as a concept. It is also an important creator of economic value. The so-called “metaeconomy” has continued to grow in recent years to offer new product/service possibilities, new distribution channels and new ways of communicating and connecting with users. Rockstar Games has made hundreds of millions of dollars in microtransactions from Grand Theft Auto (GTA) since its launch in 2013. Minecraft is not only the best-selling video games of all time (more than two hundred million copies), but a transmedia empire that ranges from movies to merchandise. In 2019 alone, the jewel in Epic Games’ crown, Fortnite, earned eighteen hundred million dollars in revenue, mostly through battle passes and cosmetic items. Animal Crossing: New Horizons, sold more than twenty-two million copies in 2020. Games are the spearhead of digital universes, but analysts believe this is only the beginning of the next generation of the Internet. Almost any service that can be monetised in the physical world can generate revenue in the Metaverse, which will become the gateway to the majority of digital experiences and will be a key component of all physical experiences and the next great work platform (Ball, 2020).

3 Experiencing Fashion in the Metaverse

The so-called Generation Z spent an average of eight hours a day in front of screens in 2020 (Global Web Index, 2021). When the global lockdown caused by COVID-19 ended most social contacts, digital universes experienced unprecedented growth. Young people spent months living in metaverses. They were taught on Zoom, Teams and Blackboard. They connected with their friends on Instagram and TikTok. They played Fortnite, League of Legends and Minecraft. The pandemic accelerated pre-existing trends: as personal interactions and business transactions increasingly take place in dematerialised spaces, more and more people are participating in these “digital bonfires” (Wilson, 2020), around which they can connect with others who share their values, hold conversations and co-create.

These virtual worlds, simulations of the real world, have inspired their users to build digital identities in the form of avatars that walk along streets, in paradise islands, offices, neighbourhoods, nightclubs and shops, where they meet and socialise with other avatars, work, play and shop. Since the beginning of the digital age, users have entered environments such as Second Life, in which "anonymity gives people the opportunity to express multiple and often unexplored aspects of the self, play with their identities and try new identities" (Turckle, 1997, p. 19).

These virtual alter egos allow users to self-express in terms of race, gender, body image, abilities and, of course, virtual fashion. As such, these alter egos play pivotal roles in our digital lives and how we represent ourselves in them. They are, arguably, as important as our appearance in our analogue lives; intangible fashion fulfils the same function as physical fashion and increases people’s capacity for self-expression through the language of fashion.

When we imagine a virtual world, a universe immediately comes to mind in which fashion becomes the ideal vehicle through which to unleash creativity. As physical fashion has, digital fashion can perform multiple functions in the Metaverse, becoming a non-verbal language that operates both in the personal and public sphere. Fashion allows us to increase our self-esteem and express our identities, and demonstrate in various contexts our ideas, values, status and preferences of all kinds, through subtle coded, or obvious, messages. Of course, fashion can simply help us look good while wearing the latest trends, but digital fashion can also satisfy our personal and symbolic needs in new environments of virtual coexistence. Thus, it is not surprising that fashion has been one of the first sectors to enthusiastically embrace the potential of the Metaverse. On the one hand, a new generation of creatives are exploring the limits of digital fashion design. On the other, brands see this emerging space as an opportunity to connect on an alternative, deeper level with their customers and to unlock new value propositions.

4 Strategies of the Pioneering Fashion Brands in the Metaverse

4.1 Dressing the Avatar: The Gamification of Fashion

In 2021 video games generated one hundred and seventy-six billion dollars and had more than three billion players worldwide (Newzoo, 2022). Since the 2000 launch of the The Sims social simulation game, the industry has worked to develop avatars who are aspirational representations of what players want to be, that is, they can go beyond the limits imposed by the physical world. But avatars are incomplete without clothes; their outfits make a big difference. Thus, one of video game creators’ main monetisation approaches is the sale of so-called “skins”, in the form of fashion items and accessories that are placed on the avatars so they can look unique. This does not change the characters’ gameplay or skills, but it provides aesthetic differentiation. The main protagonists in this market are gamers, mostly millennials and members of Generation Z, who have grown up blurring the boundaries between analogue reality and a virtual fantasy world they inhabit like a second home.

Gamers use avatars as an extension of themselves and spend much of their budget for games on fashion items. The skins market will reach fifty billion dollars in 2022 (Juniper Research, 2018) and, within the digital universe of luxury brands, games are the category with the most growth potential: according to estimates made by the consulting firm Morgan Stanley, the video game business will add between ten and twenty billion dollars to the target luxury market in the next ten years, which would represent 40% of the total turnover of the Metaverse in 2030 (Morgan Stanley, 2021, cited in Carmona, 2021).

Fashion brands were pioneers in understanding the business opportunity presented by video games for reaching younger audiences and expanding their market base. The first steps were taken in the form of collaborations with highly successful franchises, such as the 2012 hook-up of Prada and Final Fantasy to dress the game’s characters on the occasion of the saga’s 25th anniversary. Four years later, the popular heroine of the same video game, Lightning, was the star of Louis Vuitton’s Series 4 campaign. In 2019, Louis Vuitton joined forces with Riot Games to design a novel capsule collection for the popular League of Legends (also known by the acronym LoL) game, which boasts a base of one hundred and eighty million active players. The collaboration included a prestige skin developed by creative director Nicolas Ghesquière for the character Qiyana, and a trunk for the Summoner’s Cup, the trophy for the winner of the world championship. Again, in 2019, the Moschino X The Sims collection was presented, limited edition garments and accessories that could be purchased both virtually and physically. This popular game has become a catwalk on which Mugler, Marine Serre, Telfar and Gucci, among others, have paraded.

Games are a totally new revenue channel for brands and, in the absence of shows and physical events, collaborations multiplied during the pandemic. In 2020, Gucci partnered with Roblox, The Sims, Genies, Tennis Clash and League of Legends, among others. Marc Jacobs, Tommy Hilfiger and Valentino also collaborated with Animal Crossing to present their collections in the form of free, downloadable files. In 2021, the definitive consolidation of fashion gamification was confirmed. Grand Theft Auto (also known by the acronym GTA) dressed three of its characters in garments designed by the MISBHV brand, the first fashion firm to appear in this popular action-adventure game. The North Face and Gucci designed t-shirts, caps and backpacks for Pokémon GO, which could be obtained for free by accessing a code that was available for a limited time. This same year saw the launch of Fortnite x Balenciaga, a phygital collection, virtual garments that transformed as players progressed in the game and that could be purchased in the company’s stores.

For some brands, video games have become an alternative to traditional fashion shows for presenting their collections. It is foreseeable that we will see more and more gaming first launches, which will then expand into the physical world. Balenciaga presented its Fall 2021 collection in its own interactive video game, Afterworld: The Age of Tomorrow. GCDS hosted the first digital fashion show to present its spring 2021 designs; this included a virtual reality catwalk, a front row featuring famous avatars and video games that could be played following the presentation.

This symbiotic relationship only gets stronger. Given the success of these collaborations, the fashion gamble on the gamer universe has gone to the next level, and some brands have even launched their own video games. In 2019, Burberry launched its online game B Bounce, Gucci added its Gucci Arcade app, a series of games inspired by classics of the 70s and 80s, and Louis Vuitton presented Endless Runner, inspired by Virgil Abloh’s autumn/fall 2019 fashion show. Two years later, the French maison celebrated the bicentenary of the birth of its founder by launching the video game Louis the Game: A Journey For All. In the realm of mobile gaming, Off-White recently released a game featuring the New York artist KATSU.

For their part, retailers are also experimenting with new ways to interact with their customers in emerging shopping spaces; Drest, announced as the first luxury fashion game, allows players to dress the avatar “Selfie” with the latest collections of more than two hundred luxury brands, such as Gucci, Prada, Stella McCartney, Valentino and Burberry. This styling app is both community-focused, as users can create avatars of themselves and share the styles they create, and sales-focused, as the garments can be purchased directly from the brands and on the Farfetch marketplace.

4.2 Screenwear is the New Streetwear: The Dematerialisation of Fashion

3D digital designs are the backbone of fashion in the Metaverse. Unencumbered by physical world limits, virtual fashion allows designers and brands to freely explore new frontiers of expression and take more creative risks. The universe of the intangible represents a great opportunity for new fashion products, and for a new generation of designers and creators of personalised content (CC, or custom content); and the Metaverse has the potential to be the natural ecosystem of these designers and creators.

In this new market traditional brands compete with firms specialising only in digital assets, those pioneers that led the way. In November 2018, the Scandinavian retailer Carlings launched Neo-Ex, a capsule collection designed exclusively for the digital space. The proposal was simple. The user uploaded a photo of him/herself, bought a digital design and Carlings’ team of 3D designers adjusted the garment to the client’s image, which was then ready to be shared on social networks. The collection was put on sale in Carlings’ webshop, and with prices ranging from ten to thirty euros, it sold out. The initiative won first prize at Cannes Lions for providing a solution to two important issues for the fashion industry: the environmental crisis and the consumer culture driven by social media.

After Carlings’ success, other brands were encouraged to launch virtual clothing collections using increasingly sophisticated technologies and achieved more realistic results. In 2021, the luxury industry welcomed intangible fashion when the British Fashion Council invited Auroboros to join the emerging designers presenting during London Fashion Week. This young, experimental firm debuted with the Biomimicry RTW Digital Collection, fourteen digital garments presented in a video featuring human models. For the first time, an exclusively digital ready-to-wear collection was part of the calendar of a prestigious fashion week.

In a Metaverse populated by fashion brands, shops, shows and NFT launches, only one fashion week was missing. Social platform Decentraland hosted the largest virtual fashion event to date, the first Metaverse Fashion Week (MVFW). MVFW took place in March 2022, hosting shows, shopping spaces and immersive fashion experiences. In particular, it featured fashion shows (Dolce & Gabbana, Etro) and virtual store openings (Tommy Hilfiger, Selfridges, Mango); and luxury brands coexisted alongside digital native fashion brands such as The Fabricant, Placebo and Auroboros.

Unlike traditional fashion weeks, which can only be attended by an audience as privileged as it is small, MVFW was open to the public, was free and was 100% digital. While not being the first virtual catwalk event, the MVFW was the most ambitious attempt, to date, to reproduce the feel of a real-life fashion week.

4.3 The Devil Wears NFT

The term NFT has featured in communication media and social media very strongly over the past year. In fact, the Collins dictionary now defines it: a unique digital certificate, registered on a blockchain, used to record ownership of an asset, such as a work of art or a collector’s item. NFTs are, thus, basically digital certificates of authenticity that allow the purchase and sale of the ownership of digital items. To ensure the authenticity of the contract, the NFT is stored on a public network, using blockchain technology, which ensures that it is auditable and that, if the owner sells it, it can be tracked.

This sudden popularity is due to reports about multimillion-dollar NFT-based sales of artworks, songs, images, videos and even tweets. One of the most important transactions involved the artwork Everydays - The First 5000 Days, by the artist Beeple, auctioned in 2021 for more than fifty-seven million euros. The art world was joined by NBA clubs, the music industry and every sector susceptible to collecting, including the luxury industry. After all, NFTs guarantee two of the most traditional rules in this sector, scarcity and exclusivity.

From the outset of this organic link between fashion and NFTs, digital native brands have forged the path that traditional analogue firms have followed. Lacking physical storefronts or well-known logos, their products have, nevertheless, been embraced by a more technologically advanced cryptographic community. This has been the case with The Fabricant, the Dutch decentralised digital fashion house that develops its Metaverse collection through the co-creation platform “The Fabricant Studio”. In May 2019, Dapper Labs auctioned its “Iridescence dress” for nine thousand five hundred dollars, which became the first digital haute couture NFT-based sale in history.

NFTs are the perfect mix between blockchain technology and collecting culture, so sneakers/trainers, one of the most collected fashion products, have been successfully digitalised. At the beginning of 2021, the start-up RTFKT collaborated with the young digital artist Fewocious to create six hundred and twenty pairs of virtual sneakers/trainers, which sold out in a few minutes for more than three million dollars. Founded in January 2020 by entrepreneur and gamer Benoit Pagotto, RTFKT has, very quickly, built a considerable community of fans of its limited edition digital designs, inspired by the gaming universe, anime and science fiction, with occasional collaborations with artists such as Jeff Staple and Takashi Murakami. In December 2021, Nike announced it had bought this start-up, through which it has gained direct access to a community of digital creatives and a new knowledge base in virtual goods.

Nike launched its Metaverse strategy in 2019, forming partnerships with the video game platform Roblox, to create a trio of digital avatars, and shortly afterwards with Fortnite, to incorporate its Jordan sneaker model into the game. In 2021, the Oregon-based company expanded its collaboration with Roblox to create Nikeland. Although Nike’s virtual world-based activities still represent only a minimal part of its revenues, that in 2021 were almost forty-five billion dollars (Orús, 2022), these actions have the strategic objective of expanding the digital capacity of the company, in general, while ensuring it does not fall behind its direct rival Adidas, which has also taken initiatives in the Metaverse.

One can also cite the cases of Gucci, the first luxury fashion house to auction an NFT (of its film Aria), Dolce & Gabbana with its NFT Collezione Genesi and Burberry’s collaboration with the multiplayer universe Blankos Block Party. For established fashion brands, NFTs are a new product category that allows them to carry out microtransactions and that, for the moment, represent one more way to build the brand, generate customer engagement and position themselves as “crypto-status” symbols in these new universes. In addition, growth expectations are high. According to Morgan Stanley, the (still niche) NFT market will grow to three hundred billion dollars by 2030 and, more specifically, phygittal luxury goods will reach a turnover of up to twenty-five billion dollars (Morgan Stanley, 2021, cited in Carmona, 2021).

In December 2021, the Metaverse became popular among a wider segment of fashion consumers due to the collaboration between Zara and the South Korean brand Ader Error in the launch of a phygital collection, designed so that users of the Zepeto mobile application could dress their avatars, and that was also put on sale on the brand’s website. According to both brands, one of the intentions of the AZ Collection was to create a new philosophy that would allow new generations to better express their identity and uniqueness in the spaces they inhabit: “The designs reflect the lifestyles of people with personalities shaped by their simultaneous experiences in the real and virtual worlds, demonstrating the new ‘person’ dreamed of by both brands” (Zara, 2021).

The Metaverse provides an opportunity for the fashion industry, but there is a risk of leaving behind brands that do not invest in digital innovation, and independent fashion designers who lack the technological skills and/or budgets to develop a virtual world strategy. Thus, great interest has been expressed in the initiative announced by the Council of Fashion Designers of America (CFDA) in March 2022, about its collaboration with the creative consultancy 5Crypto, the mobile game The Sandbox and Polygon Studios to develop a United States-focused Web 3.0 project and an educational programme to address the Metaverse and NFTs, with the mission of educating, innovating and creating digital space communities.

Brands are rapidly evolving their strategies to integrate NFTs into the fashion business and turn them into more than just collectible assets or industry side shows. Adidas and Gucci are among the brands that have integrated them, to reward loyalty and create a VIP membership, into their affiliate programmes. As NFTs can act as unique identifiers for their owners, brands can use them to extend the privileges and advantages of the owners, such as by providing gifts or exclusive access to new products and services. Thus, Balmain’s collaboration with the Los Angeles-based Dogpound gym combines the simple sale of a digital fashion item with a physical experience, experimenting with an NFT that unlocks different services as the price increases, such as training sessions and purchasing tickets for the French company’s shows. On the other hand, as certificates of authenticity, digital tokens have the potential to end the trade in counterfeit goods, transactions, prizes and voucher systems. The luxury groups LVMH (Moët Hennessy Louis Vuitton), Prada Group and Compagnie Financière Richemont have joined forces in the Aura Blockchain Consortium, which promotes the use of a single blockchain solution, open to all luxury brands, to tackle counterfeits.

5 Conclusions

The digital revolution that marked the beginning of the information age brought about a profound transformation of the fashion industry’s entire value chain, such that production systems born in the nineteenth century coexist with the new disruptive models of the digital age. While some companies have still not embraced digitalisation, we are already witnessing the beginning of the Internet’s third chapter, the Metaverse, which merges our physical reality with virtual reality and will affect all spheres of our lives and all companies. But not everything in the Metaverse is new. In many ways the future resembles the past. We have been connected to virtual worlds for more than two decades; similarly, brands have been exploring the possibilities of these spaces for some time.

The self-expression offered by fashion, added to its undeniable playful component, has favoured the gamification of the industry. The skins v-commerce is so consolidated in the video game world that digital fashion has found a natural ecosystem in which to develop. The multiplication of fashion-game partnerships is creating mutually beneficial synergies for both industries. Fashion companies can now reach new audiences that don’t typically interact with brands in physical formats, stay ahead of the curve with younger consumers, monetise their digital assets in communities accustomed to paying for premium experiences, and test which designs are most attractive to users, so that they may subsequently direct their productive efforts towards those who buy designs for their avatars. Video game companies which link with the fashion world can derive a kind of cultural authority through their partnerships with prestigious brands. In any case, whether as a communication strategy to connect with a wider consumer segment, or as a new channel through which to obtain income, collaborations between fashion and video games continue to increase and it is foreseeable that both industries will be further integrated in the future.

This partnership between the Metaverse and fashion creates a new framework for digital creatives and is an additional avenue for designers and brands to take advantage of the growth and expansion opportunities presented by Web 3.0. In this context, digital fashion is a growing niche which opens new horizons for creative expression and allows both designers and users to unleash their imaginations. More and more digital native brands are emerging, which coexist with analogue brands, which have begun to experiment with different digital strategies to position themselves as leaders in innovation in virtual spaces.

More imaginative, sustainable and inclusive digital clothing designs, fashion shows and weeks, v-commerce in the form of permanent or ephemeral virtual stores, augmented reality applications and virtual reality that enriches the shopping experience… Digital fashion has many possibilities, many of which are still unknown, because when self-expression and the search for self-identity through fashion transcend tangibility, the limits and limitations of analogue reality can be crossed.

As human existence has become more technological, technology has become humanised. To the extent that the Metaverse favours creativity, co-creation and the expression of different versions of the self, digital fashion can be an ally in the exploration of the different ways of being in this new, coexistence space. If it is possible to agree with Li Edelkoort that the fashion system we knew is now dead, we can also concur with Cecil Beaton that fashion is indestructible.