H&M gamifies circular fashion on Roblox w/ Loooptopia

AR shopping on Snapchat, bull case for fashion NFTs, plus more top stories

🕶 Metaproof Fashion

Gm fashionistas! This is Sophia from 🕶 Metaproof Fashion, the weekly newsletter where we keep you informed on how the metaverse & web3 are changing the fashion industry.

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This edition is sponsored by the OG metaverse fashion peeps The Fabricant. They have been deep down the metaverse fashion rabbit hole since 2018 and are pioneers in every sense of the word. They are on a mission to change the fashion industry and are making great progress - check them out today!

📲 By the numbers

  • US fashion digital resale marketplace sales are estimated to hit nearly $20B this year and continue to grow by double digits through 2025. (Source)

  • Over 30% of customers who are active on the metaverse have bought real-world items there, noted McKinsey research from 2022. (Source)

  • While 56% of US adults are aware of the metaverse, only a small percentage or 8% have actually engaged with it, according to recent research from KPMG. (Source)

📫 News & trends

H&M has teamed up with digital studio Dubit to launch H&M Loooptopia, a virtual experience on the Roblox platform that allows customers to create virtual wardrobes for their avatars in an immersive 3D environment with mini-games, events, and styling sessions.

This is the latest in a trend of retailers using metaverse activities to gamify the consumer experience. According to H&M's global head of brand experience for the metaverse Max Heirbaut, incorporating digital elements in its branding and shopping experience is a step toward reaching digital natives through fashion both in the real world and online.

What does it feel like entering Loooptopia? Interact within worlds like Rainbooow Fields, Neon Studiooo, and Fabric Fooorest, where you can build clothing pairings while enjoying music tracts as well as special effects recreating a runway feel. Trade with other players, take selfies, or recycle old clothes to unlock the ability to earn rare elements.

Snap and Amazon Fashion have partnered to bring new virtual try-on (VTO) experiences to Snapchat users. The companies hope that their combined services will appeal to the estimated 1.4 billion people who will use augmented reality on their smartphones in 2023. Mobile shopping is a rapidly growing channel, with Amazon Fashion customers purchasing over one billion fashion items on mobile devices. Through this new partnership, the 363 million daily Snapchat users will initially have access to selected Amazon eyewear brands, including Maui Jim, Persol, Oakley, and Costa Del Mar. Eyewear is the first category for the VTO Shopping Lens partnership, which both companies plan to expand into additional categories.

NFTs have gained significant attention in recent years, particularly PFPs. Here are some of the potential benefits of fashion NFTs:

  • Create deeper communities - NFTs have the potential to foster strong communities, create value for users, and support brand values. This can include co-creation and incentives for user-generated content, a market worth $3.6B and expected to grow by more than five times by 2028.

  • Target customers and receive royalties - NFTs provide brands with the opportunity to target users based on their NFT holdings, on-chain activity, and physical or metaverse activities, allowing them to track which NFTs consumers own, how many they have, and how long they have held them.

  • Digital native fashion brands - The fashion industry is expected to see the emergence of new digital native fashion brands, such as The Fabricant, Artisant, Cult&Rain, and the Nike-acquired RTFKT. These brands only have a presence in the web3 space.

House of Blueberry

Digital fashion brand House of Blurberry has sold over 20 million units of virtual clothing to date. It is popular on open-world platforms Roblox and Second Life and has established itself as a leading fashion house in the metaverse. The brand offers digital fashion as a means of self-expression and is targeting Gen Z, who are building both digital and physical wardrobes. The brand has recently received $6M in seed funding, which it plans to use to expand its presence in the metaverse, promote female designs and aesthetics in a male-dominated industry, and expand its offerings beyond fashion into accessories, makeup, and more.

The Academy of Digital Art, Sciences, & Culture (ADASC) is launching its new NFT Membership Decentralized Autonomous Organization (DAO) and the annual NFTYS Awards Gala (NFTYS) on June 14, 2023, at The NIKO Theatre metaverse layer at Worre Studios in Las Vegas. The ADASC DAO NFT Membership allows members to have a say in the organization's decision-making processes and to earn rewards for their contributions to the community. This new DAO aims to create a collaborative and inclusive environment for artists, technologists, and cultural innovators working with NFTs and the web3 space. NFTY categories include fashion, music, art, film, sports, and more, and are judged by a panel of cross-industry names.

In 2022, the fashion industry saw the rise of phygital, with high-profile releases from Prada, Givenchy, and Tommy Hilfiger. However, there was still quite a struggle for these brands to convert the success into real-world value. This year, brands are focusing on creating high-quality, luxury goods that bring online identities into the physical realm, rather than simply producing merchandise.

Designer and NFT personality Gmoney is working to redefine the virtual space through his platform, 9dcc, replacing terms like "phygital" with "networked products" and prioritizing high-quality garments over one-time gimmicks. These changes are likely to appeal to luxury consumers and encourage them to spend money in the online market, he noted.

Infrastructure is also key, with the evolution of blockchain technology allowing consumers to easily verify their assets as well as usher in new opportunities for resale models and secondary value.

Fashion houses including Burberry and Rimowa are beginning to explore the use of online games, NFTs, and metaverse platforms as a way to reach consumers in the virtual world. While British heritage label Burberry collaborated with Minecraft on the in-game adventure called Burberry: Freedom to Go Beyond and a physical capsule collection, Dolce & Gabbana created the web series GooDGame in collaboration with Italian esports company Mkers. According to a report by The Business of Fashion and McKinsey, it will likely be at least five years before these brands see any financial profits from these endeavors; the global spending on virtual goods, however, is already significant, reaching $110B in 2015 and expected to grow to $135B by 2024.

SPIN by lablaco by web3 circular fashion ecosystem Lablaco has launched its first digital retail experience, called Web3 Fashion: The Origin Story, at the Galeries Lafayette Champs-Élysées in Paris. The three-week event, held in partnership with Crypto.com, aims to demonstrate to consumers how digitized fashion can contribute to a more sustainable future. The exhibition will also feature the official launch of SPIN, a marketplace that allows consumers to purchase and rent high-end fashion, artwork, and physical spaces using virtual and augmented reality. SPIN is focused on luxury fashion, which often has a long post-purchase lifespan and secondary use. Fashion remains one of the top pollutants in the world, responsible for over 20% of water pollution, up to 10% of all carbon emissions, and about 64% of the 32 billion garments produced annually ending up in landfills.

Web3 thought leaders and creatives have disclosed their predictions for the web3 space in 2023. For web3-native brand RTFKT, the focus in the near future will be on DAOs, digital collectibles, and social rewards. Toni Thai, a web3 artist and founder of Bad Grrls Creative Club, commented that it is difficult to make predictions about the web3 space because it is constantly changing. For Nate Hemmingway, director of partnerships at Dapper Labs and NBA Top Shot, the success of NFTs and web3 projects will depend on their ability to build real communities and offer practical utility, while cash-grab and low-utility projects will fade into obsolescence similar to the dot-com bubble. And don’t sleep on AI: artists are already side-eyeing platforms like ChatGPT for taking the “creative” aspect out of creating, although it’s likely they will eventually start embracing the technology and use it in their art.

There is skepticism surrounding web3, cryptocurrency, and blockchain technology, but they have the potential to positively impact businesses and consumers. Many cosmetics companies are already exploring the use of technologies such as web3 and AI to improve marketing, customer relationships, and sustainability. Through these advancements, beauty brands are out to attract customers and improve their relationships with them, enhancing sales. From Estee Lauder sponsoring Metaverse Fashion Week to L’Oreal partnering with Meta on a beauty metaverse-focused web3 accelerator to NYX launching a DAO to encourage 3D looks from digital artists, the rush to join the metaverse is real among the arbiters of beauty.

Brands have found that consumers may not be well-versed in web3 technology and its innovative concepts, so they are altering their marketing and language to better engage with everyday shoppers. Web3-native fashion brand RSTLSS, launched on December 15 after it raised $3.5M from investors like socialite Paris Hilton, is using apps and TikTok to introduce tech-forward concepts to groups such as Roblox gamers and trendsetting teens. It minted all of its 1,000 NFT "keys'' through an app that offers features like drops, lore, customization options, gaming integrations, and earning structures like experience points and skill trees. As expected, teenage girls lead the trends and move culture forward, while brands are also chasing after audiences on platforms centered on anime, K-pop, and social media.

Global metaverse company Trace Network Labs has partnered with fashion brand Beverly Hills Polo Club (BHPC) to launch MetaStore, a virtual store in Pariz Metaverse where Buddy avatars can buy BHPC clothing and have it delivered to them. This new store is a key step in Trace Network Labs' goal of creating life-like experiences for shopping, entertainment, and commerce in the metaverse. BHPC's clothing collection on Trace Network Labs will likely be available in the first quarter of 2023. Pariz is a fashion and lifestyle metaverse built on multichain, aiming to provide an immersive and realistic shopping and collaboration experience. Buddy allows users to create web3-native avatars that can be used across multiple metaverses.

💸 Finance buzz

Sustainability is a central theme in fashion investing today, including the following:

  • The London Fashion Fund (LFF) is funding a portfolio of small startups that are the future of a responsible fashion industry, including a company growing cotton hydroponically and one that develops items that photosynthesize. (Source)

  • Traceability and supply chain transparency platform TrusTrace teamed up with Swedish fashion label Kappahl to make Kappahl’s ethical and sustainability-driven goals a reality. (Source)

  • Circular economy startup Fairown, which enables a circular economy and reduces waste by helping manufacturers, merchants, and consumers become sustainable, expanded to Poland. (Source)

🗣️ Quote of the week

“In a world where technology has made mass production and fast fashion the norm, luxury Web3 made-to-order stands out as a beacon of quality and individuality. Focusing on delivering a high quality and sustainable physical item with digital counterparts sets us apart, and will continue to drive our importance in an ever-changing web3 world.”

 

Andy Griffiths, CMO of digital fashion brand Cult&Rain

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All content on this newsletter is for informational purposes only and does not aim to serve as or replace expert investment advice.

If you are a startup building in the metaverse / web3 ecosystem and are raising capital, please reach out to Sfermion. Sfermion is an investment firm focused on accelerating the emergence of the metaverse.

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