The “phygital” phenomenon is hitting some of the world’s largest department stores, as Jonathan Koon’s 8-Bit launched Monday under his streetwear label, Mostly Heard Rarely Seen. Each item in the collection includes the physical garment and its NFT version.
The term, a portmanteau of “digital” and “physical,” is a fitting, albeit clunky way to refer to digital products, such as avatar wear or virtual art and collectibles, that come with a physical counterpart or vice versa. For Koon, that translates into athleisure and streetwear with QR codes that not only come with an NFT version of the item, but also fast-tracks luxury customers into the virtual world of Highstreet, a retail and gaming-oriented metaverse built on the blockchain.
The collection will be carried by Saks Fifth Avenue, Neiman Marcus, Selfridges, Harvey Nichols, Beymen and Bloomingdale’s, among others.
Naturally, given the premium clientele, the experience was designed to reduce friction. Snip the security tag to reveal the bar code, scan it and the simplified process kicks in to quickly create an avatar — it can even use a selfie for a mirrored digital version of the real-world user — and adorn the character with the virtual purchased garment. Users receive $High tokens, Highstreet’s native currency, so they can immediately explore the environment and shop or sell other items.
If owners want to sell their new NFTs, that process is simple, too. It only takes a few steps to mint, or resell, it as a listing on OpenSea or LooksRare platforms.
When it comes to NFTs, rarity matters, so the products are produced in varying quantities across the spate of retail partners. The most limited run will likely yield the highest value. In that way, NFTs are similar to hyped-up real-world drops — so much so that Koon likens his initiative to the buzzworthy skate brand Supreme, except geared for the metaverse.
But the goal isn’t merely to push product, according to Koon.
In fact, he could have charged a premium, given the painstaking production process. Every graphic was produced through custom cast aluminum moldings and a 30-day production time, with hand-filled silicone, an industrial heat press and industrial stamping machines to create physically unique items to mirror the rarity that blockchain affords. 8-Bit shirts start at a few hundred dollars, but could have justified a much higher price.
Instead, the fashion designer wanted to make the collection accessible, he explained in an interview with WWD. He isn’t eyeing one-off transactions, but a much more ambitious vision to turn brick-and-mortar stores themselves into the entry point or portal to the metaverse.
“We imagined [luxury customers] entering Web 3.0 through their world,” he said in an exclusive interview with WWD. “Instead of saying, ‘Guys, come to Web 3.0, come to our space,’ and forcing you in and teaching you the platform, we’ve created this QR code system of phygital products. They’re truly physical in nature, but celebrate what we fell in love with in the fashion industry — which is fashion retail at its highest level at the luxury department store.”
Koon’s understanding of the premium shopping experience is informed by a number of factors. Many of the department stores on his partner roster already carried his brand, and he has his own brick-and-mortar experience as well, having launched a luxury store in SoHo in 2013. In fact, it was a very techie customer in that store who turned his attention to crypto in the first place. Not that Koon is ignoring e-commerce completely. Farfetch is another retail partner, he explained, and it will carry the collection online.
However customers purchase, the item will grant access to Highstreet, where they can explore the space, check out their digital wearable and transact. The latter is key. Transactions are part of the platform’s lifeblood.
Backed by investors including HTC, the Taiwan-based tech giant and producer of the Vive VR headset, Highstreet itself has grandiose goals to establish itself beyond gaming as a retail-oriented metaverse, and it’s in talks to bring brands into the space. Koon’s 8-bit, for instance, will set up a virtual shop there.
Through PC desktops and laptops, people can enter the world of Highstreet as a MMORPG, or massively multiplayer online role playing game, to complete quests, do battles and level up. They can also shop for items there. Users interested in shopping or transacting alone, but not gaming, can access those actions via their phones and tablets for a lightweight experience. VR fans can sideload Highstreet, too, and immerse themselves completely through their headsets.
“We’re one of the very few actually doing commerce plus gaming, and also in VR,” said Jenny Guo, cofounder of Highstreet, “so I think that’s one of the biggest strengths we have.” Indeed, the ability to access one platform in a variety of ways is a key promise of the metaverse, but few platforms have figured out how to pull it off.
Highstreet recently made land available for sale in April, with more on the way, and it’s figuring out a number of potential retail relationships. It’s in talks with Shopify, for instance, about integrating with its platform.
“We’re actually very close with Shopify, because a lot of the people who run Shopify these days basically went to college with us. So, you know, all of us are Canadian,” explained Travis Wu, cofounder and chief executive officer of High Street. “[It] gives us a small edge to kind of get involved with them. They haven’t been involved yet, because we’re still discovering how they can build a custom integration port for us.”
Highstreet is expanding at a rapid clip, and Jonathan Koon’s 8-bit could bring an infusion of high-value patrons to the mix. If it works, if luxury shoppers respond to this less fussy way of entering the metaverse by scooping up bundles of these NFTs and physical garments, this model could become standard for other tech platforms — and department stores.