Need help figuring out your place in the metaverse?
The Council of Fashion Designers of America is entering Web3 with its first metaverse and NFT partnership with creative consultancy 5Crypto, working alongside The Sandbox and Polygon Studios to establish a Web3 blueprint for American fashion in the metaverse.
The Sandbox, a subsidiary of Animoca Brands, enables users to build their own virtual and gamified worlds using a decentralized platform while Polygon Studios is a blockchain arm dedicated to large-scale and energy efficient NFT projects.
“This is a remarkable opportunity for the CFDA to guide the American fashion industry into the future of commerce and creativity,” said Steven Kolb, chief executive officer of the CFDA. “Our mission is to position our members as leaders in the global innovation of fashion and retail via digitally led strategies to support growth and expansion.”
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The Sandbox was cofounded by Sebastien Borget and Arthur Madrid and has previously collaborated with Snoop Dogg, Gucci and Adidas. The initiative also leverages the expertise of Polygon Studios, the NFT and gaming arm of Ethereum layer-2-scaling protocol Polygon. Polygon Studios already works with the majority of today’s top Web3 games and NFT projects and has helped luxury brands enter Web3, such as Bulgari, Prada, Adidas, and Dolce & Gabbana.
The new partnership looks to bring America’s design talent into virtual spaces to introduce Web3 to a larger consumer segment, and provide brands with insights that will allow them to engage and empower these communities, while establishing new revenue streams. The partnership will offer members professional development and educational resources, allowing them to gain insights and cultivate opportunities for their businesses.
There’s no question that virtual worlds have become an important channel to connect with the next generation of consumers, the majority of whom spend significant time in the virtual world. The partners believe that fashion brands need to get educated and figure out their individual strategies and where the opportunities lie.
As reported, several fashion brands participated in the first Metaverse Fashion Week March 23 to March 27 in Decentraland, a blockchain-based 3D virtual world. Among the brands that got involved were Tommy Hilfiger, DKNY, Etro, Selfridges and Dolce & Gabbana, participating in runway shows, brand activations, interactive experiences and shopping opportunities (to varying degrees of success) across multiple digital storefronts showcasing wearables for avatars, NFTs and artworks and more.
In the luxury sector specifically, KPMG predicts tremendous growth opportunities, citing industry analysts who predict the growing demand for luxury goods in the metaverse could reach $50 billion by 2030, as reported last week. The KPMG report estimated that in the next five years, 70 percent of brands will have a presence in the metaverse. Brands are establishing virtual stores, virtual try-on rooms, creating digital assets such as NFTs and other collectibles, offering private and hybrid shopping events and other experiences. They’re also collaborating with gaming platforms, buying digital real estate, setting up shops and building brand communities on various open platforms.
According to The Sandbox’s Madrid, “We believe the metaverse is the new frontier of expression, where avatars will be an extension of our digital identity. We are excited to offer new creative tools for fashion designers to create NFT collections with digital ownership and scarcity that will be playable in the metaverse.”
Ryan Wyatt, CEO of Polygon Studios added, “The CFDA’s transition to Web3 is essential in creating a framework for digital creatives and securing the future of American fashion and culture. Polygon and Polygon Studios are immensely proud to be playing a role in this shift.”
Discussing the global opportunities of this partnership, Kolb explained, “One of the beauties of Web3 is that it is truly a global industry; our partner The Sandbox is an international company. The possibilities to collaborate and grow with partners from around the world are endless within the metaverse. They are ‘metaversal’ and allow brands to go beyond borders. The U.S. is leading and excelling in adoption and consumer engagement, causing rapid-fire growth in the industry.”
For a company which hasn’t dipped its toes into the metaverse yet, Kolb offered this advice. “The purpose of the partnership is to give them a blueprint and a 101 plan on actually how to do that. Two things members need to know: How do you actually enter into the metaverse and what actually happens once you’re in it?” He said through 5Crypto, Sandbox and Polygon Studios, they will take members step by step, and tell them what the metaverse actually is and what should they do. He said there are opportunities for customer engagement, brand building and loyalty programs.
“This is really a democratic, even playing fields for all of our members, small, medium and large to take advantage of the opportunity. I believe we’re really the first fashion organization to bring this opportunity to designers,” said Kolb.
Can he foresee New York Fashion Week taking place in the metaverse?
“To the extent that someone wants to have a metaverse fashion show, that’s a possibility. We organize and bring the power of American designers together through our work, so there’s a lot of opportunities and having a fashion show is certainly one of those opportunities. I don’t think a metaverse fashion show is necessarily the future of our business and will replace a real-life fashion show. It’s just another marketing tool to engage with customers,” said Kolb.
As for whether the metaverse should be used for marketing purposes, to build awareness, drive sales, or to make money, Kolb feels it can be a money-maker. “Marketing’s a big part of it, but there’s definitely a way to make money there. Designers can have a physical product, but also a virtual product and can use that as a way to sell. There’s lot of opportunity. You see stories about art that’s been sold, but fashion designers are so positioned to bring in their creative thinking in the space,” said Kolb.
According to Kolb, they’re going to have panels, one-on-one conversations and editorial content through their channels. “The goal is for CFDA itself to enter the metaverse and have opportunity not just to promote and support the work of the CFDA, but to bring opportunities to our members.” He said someone once said to him, “The metaverse is a playground for the imagination.”
Akbar Hamid, CEO and founder of 5Crypto and The 5th Column, recommends that brands educate themselves. “I think the first thing the brands need to do is education. Before you move into the space, they need to be educating their teams on all the different aspects of the metaverse and NFTs. If your teams don’t really understand the space, it’s going to be very hard for you to enter it, even if you work with an outside party,” he said.
“The beautiful part of the metaverse is that small businesses and emerging brands have as much as a chance as big established businesses because the space is so new,” said Hamid. He believes the brand’s creator and designer and marketing expert need to understand and get well versed. “I think it’s important for the designer and head of the house to take the lead,” he said.
Hamid explained that a brand shouldn’t want to do the exact same thing they’re doing in the physical world in the metaverse. “I think really creating an experience, such as a gaming experience, allows you to play and earn and unlock tokens to redeem actual products. We’re still developing these technologies and it’s new but that’s a great utility so a consumer can use their avatar or NFT to play a game and unlock an experience,” he said.
He suggested that with supply chain issues, maybe a designer produces a collection of NFTs and engages their community, and the community buys the NFT pieces of the collection, and when they want to redeem them, that’s when the pieces are produced. Or if a designer is creating a collection and doesn’t have the means to do it right away, they could community fundraise with an NFT collection and use that money to produce their first collection. “I think it’s allowing people a new entry point,” he said.
According to Madrid, the first steps are to help brands buy land and to join the metaverse. He spoke about the digital scarcity aspect of the metaverse. “Digital scarcity means that brands can create rare digital items (or NFTs) that are 1 of 1s. Meaning there is only one of them and they are extremely rare. For example, the Dolce & Gabbana crown NFT. [A one-of-a kind electronic and virtual Dolce & Gabbana tiara brought in over $300,000 at auction].
“The world’s biggest luxury brands have been dipping their toes into the world of digital fashion, and the early evidence suggests there are eager buyers willing to pay premium prices for virtual products. These non-physical and limited-edition items create an air of excitement and develop just as big a following as in-store products that create lines around the corner — if not more because the audience is global and you can access the sale from anywhere. Not to mention that on the blockchain, your purchase of this extremely rare item will live on the ledger for perpetuity. Forever bragging rights. It’s essentially a new frontier where designers take control of their digital assets and monetize, create new revenue streams and new community engagement touch points and experiences,” he said.
“You have a new generation of consumers and this generation is spending a lot of time in front of a screen and developing a new digital identity. This digital identity is mainly with pictures and sometimes with text, and will be with an avatar. The extension of your identity is an avatar. Those brands need digital product to dress this avatar and inspire this avatar, and help those new consumers to express themselves with fashion,” he said.