The Web3 and metaverse economies, enabled by user-owned digital assets like NFTs, have been center stage in the crypto industry since the second half of 2021. Even now, with markets trading deep in the red amidst a global downturn, most institutional investors, corporations, and new crypto projects focus on innovative metaversal applications.
The broad mainstream appeal of the metaverse offering decentralized cultural and entertainment experiences has the interest of a global retail audience. And where consumers go, brands follow. Many popular iconic brands have already started making moves to build a presence in these new virtual worlds, including several fashion brands such as Nike, Gucci, Balenciaga, and Prada.
Fashion brands buy into digital clothing
Virtual goods generated about $110 billion in 2021, and brands such as Gucci, Louis Vuitton, Nike, and Adidas have taken notice. Each brand wants to dress the metaverse’s virtual inhabitants which, even while the crypto market tanks further, they believe will represent the next generation of customers in the decades to come.
Many experts in the fashion industry like Daniella Loftus expect tech to become more accessible and go mainstream, which means soon enough people will use and value digital fashion. And there have already been plenty of NFT projects launched by fashion brands during the past few months that indicate the shift happening in the fashion industry.
In August 2021, fashion giant Burberry and Blankos Block Party, a multiplayer party game created by Mythical Games, had tremendous success with their NFT drop. The duo released a total of 2,250 NFTs, which sold out in about 30 seconds for an estimated $375,000 in total.
Louis Vuitton combined fashion and technology by introducing “Louis the Game”, an adventure-style game where players would have to travel through a dollhouse belonging to Vivienne. The adventure features 30 hidden NFTs with 10 NFTs in collaboration with “Beeple”, a popular NFT artist.
Classic rivalry extends into the metaverse
Nike is one brand that’s fully leveraging the metaverse to boost brand awareness. As a result, Nike is far ahead of the pack as one of the original metaverse brand trendsetters – but Adidas is following closely behind.
The RTFKT brand was established in 2019 and became a specialist in selling virtual sneakers. Early in 2021, the business had a collaboration project with “Fewocious” who designed 3 virtual sneakers. Bidders could “try on” the sneakers through Snapchat and then enter an auction to purchase them after. The highest bidder also had the chance to obtain the physical pair of sneakers to wear in real life. The collaboration lived up to the hype, with 600 pairs of sneakers being sold in under 7 minutes, generating a revenue of USD $3.1 million.
Nike has since acquired RTFKT and has continued working on innovative NFT projects, such as the Nike Cryptokicks. The sneakers are available to people who own RTFKT’s Mnlth, a mysterious digital box NFT that was airdropped for free to anyone who owned a Clone-X in February. Clone-X is the PFP project that RTFKT created with artist Takashi Murakami in November. People could elect to sell their Mnlth NFTs or keep them. Now, those who held onto it have been rewarded: they can burn their current Mnlths in exchange for a Mnlth that holds a Cryptokick.
The same week that Nike acquired RTFKT, Adidas unveiled its NFTs created in collaboration with Web3 influencers Gmoney and the Bored Ape Yacht Club. Similar to RTFKT, Adidas’s strategy is to promise ongoing future perks, including access to both digital and physical products and events.
Adidas has also announced a collaboration with Coinbase and has acquired a parcel in The Sandbox as part of its metaverse push. A spokesman for Adidas told CityAM that the Coinbase partnership is part of Adidas’s strategy to gain a foothold in the metaverse. The spokesman said: “The Metaverse is currently one of the most exciting developments in digital, making it an interesting platform for Adidas”.
There isn’t much information available that reveals what they are developing on their digital real estate, but it’s likely intended to compete with Nike’s project on Roblox where people can play to earn digital goods.
We expect many more brands to move into the metaverse to deliver a broad range of experiences, but it seems that fashion brands are leading the way as they are uniquely positioned to connect current digital and physical worlds.