I recently attended the World Retail Congress, where I heard for the first time the concept of dressing an avatar in luxury clothing. I was intrigued so I signed up to “The Dematerialised” and a new (virtual) world opened up to me.

“Dematerialised fashion” can take two main forms:

  • A designer or brand produces a 3D outfit that is superimposed on a picture of the buyer (or influencer) – this way it looks like the “real” person is wearing something new (and usually extraordinary)
  • A designer or brand produces NFT wearables that can be purchased to dress avatars (a virtual representation of the buyer) to be used in games and other virtual meeting places.

Dematerialised fashion is starting to gather momentum, as it has some clear benefits:

  • Sustainability: brands don’t need to produce and ship samples to influencers, they can also test many different options and define what customers would like to buy before actually producing it, with minimum cost to them and the planet;
  • Supply chain benefits: virtual design is becoming part of the must-have supply chain tech – it became more popular with the pandemic, but it’s here to stay, as it greatly reduces the cost and time of putting products on the market;
  • Brand loyalty and more revenue streams: brands can connect with customers in the physical and virtual worlds, where gamers can dress their avatars in, for example, LV, Burberry or D&G exclusive NFT wearables – this means access to many more customers, especially for luxury, as many people that can’t afford buying certain items in the real world can now buy wearables for their virtual selves for a fraction of the price.

With younger consumers increasingly familiar with avatar-based fashion through videogames such as Fortnite and Roblox, this seems like a logical progression for brands. However, there are some potential issues:

  • Will this further perpetuate some of the issues with influencer marketing? The impact of influencers and aspiration-based marketing on younger consumers has been widely reported. Could this exacerbate the situation or, if digital designer brands are more affordable, is there actually a benefit to buying, wearing and owning clothes that don’t actually exist?
  • Are there actually sustainability gains? While the environmental impact is different, is it actually the case that these brands, by embracing cryptocurrencies, are just moving the cause of harm elsewhere? My colleagues Colin Johnson, Mark Doughty and Kevin Madura have written on the environmental impact of crypto recently.

The fashion industry, particularly at the luxury end, has traditionally been slow to change. But change it must as consumer appetites shift at an ever-increasing pace. While luxury fashion has always thrived in a physical experiential environment, perhaps the events of the pandemic have pushed innovation harder into the virtual. But who’s to say this won’t become a significant market in the future, as consumer definitions of what constitutes value and what is considered valuable take on a different meaning for their online alter egos?