Can The Metaverse Transform Fashion Business Models?

The more I write about “the metaverse,” the more sceptical I feel.

It’s not that I doubt we’ll see boundaries between physical and digital continue to vanish. There’s little meaningful distinction already between “real” life and life online. That trend is set to continue as the internet mediates more aspects of our lives.

But most so-called metaverse projects today, in fashion and elsewhere, are collections of NFTs — entries on a blockchain linked to a unique asset — or experiences in online games, some of which have been around for more than a decade. These may provide building blocks for the metaverse people like Mark Zuckerberg imagine, where the internet has evolved from 2D to 3D and you can navigate a network of interconnected virtual worlds as a digitised avatar. But they aren’t themselves the metaverse.

It’s still very unclear how disruptive these technologies will be. Analysts are talking about a fashion opportunity potentially as great as e-commerce. But there’s a different analogy that keeps popping to mind when I see all the projects and products hitting the market.

Will the metaverse be like streaming or like 3D movies?

Streaming fundamentally transformed business models. It completely upended the music industry. It turned Netflix from a company that rented DVDs by mail into a prolific studio. Amazon has used streaming to get more and more shoppers hooked on Prime. Even Apple hasn’t been able to resist jumping on the streaming bandwagon.

3D movies, on the other hand, repackaged an existing product without adding much value. Their effect has not been quite so pronounced, to say the least.

There are hints of both scenarios in the metaverse — or what exists of it today. The Metaverse Fashion Week that just concluded and other examples of virtual fashion has so far looked more like 3D movies. While video games keep growing and users are dressing up their avatars, the future of virtual runway shows as a viable marketing tool or virtual products as a major revenue stream for physical fashion brands is far from certain.

NFTs don’t have much of a future if they can’t find uses beyond being collectables or overpriced profile pictures for social media accounts. The customer experience involved in buying them remains maddeningly complicated and off-putting.

On the other hand, what NFTs allow is true ownership of digital items. There’s good reason to think there will be real value in that as more of our lives — and possessions — exist online. Fashion brands have offered some promising examples of how they could be used as loyalty tokens and musicians see their potential as a way to fight back against, well, the streaming industry.

I don’t know how any of this is going to play out. Technology is never perfect from the start. Though I’m sceptical, too, that most of society will soon walk around wearing face computers in a state of semi-permanent augmented reality we inhabit as cartoon avatars. There are tremendous technical obstacles, and even if they are overcome, it’s unclear whether users will embrace this.

My guess is 3D experiences and capabilities will flourish but we’ll still roam the internet in 2D much of the time. Blockchain and NFTs will advance and find new applications but we’ll still use plenty of centralised services. The future is often both more mundane and more strange than anyone predicts.

But as fashion charges headfirst into it, companies should probably keep asking themselves whether they can use technology in ways that are genuinely transformative, rather than just as new packaging.

To read more from BoF’s Technology Correspondent Marc Bain, sign up for our Weekly Technology Briefing out every Thursday, exploring how blockchain, AI, 3D, extended reality and other innovations will change how fashion businesses design, manufacture, distribute, market, sell and resell their products.

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