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Digital Fashion Opens the Door to Affordable Luxury

Until working on Lyst’s debut report on digital fashion, Bridget Mills-Powell said she always thought of the subject as “one step removed” from her life.

“Through doing this report, and kind of connecting the dots across all the different kind of cultural touch points that are happening at the moment, I realized that it’s actually infiltrating culture and the fashion lover’s consciousness far more than I had actually given it credit for,” Mills-Powell, the global fashion search platform’s content director, said.

Mills-Powell discussed the report last week with Kerry Murphy, the founder and CEO of The Fabricant, Lyst’s collaborator on the Digital Fashion Report.

The future of digital fashion

As the pandemic forced many labels to rethink their traditional fashion shows, Balenciaga made the unique decision to showcase its Fall/Winter 2021 collection in the form of a bespoke video game. In the 48 hours following the game’s launch, searches for the luxury brand jumped 41 percent on Lyst, per the platform’s Digital Fashion Report.

Creating digital collections is The Fabricant’s bread and butter. A digital-only fashion house, half of the company’s business is dedicated to working with outside companies like Under Armour and Puma to create digital samples and lookbooks.

Murphy, who entered the film and visual effects industry amid this transition, said he remembered the debates of analog film versus digital film. “And there it was the same thing, digital film happened to be more work, digital film happened to be more expensive, simply because those processes and tools had not been put into place. Well what happens? Digital film takes completely over,” Murphy said.

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But aside from helping physical fashion brands, The Fabricant also creates its own digital-only designs. In 2019, for example, it auctioned off its first NFT item—referred to by Forbes as the first digital-only blockchain clothing—for $9,500. More recently, the business has landed partnerships with companies like Buffalo London and Atari.

Still, Murphy said he thinks brands see digital as just a communication method to sell physical items. “We want brands and we want people to get out of that mindset and start seeing the value in digital-only clothing,” Murphy said.

“We need everybody to have that virtual avatar,” he continued. “We need people to be engaging in the virtual worlds, because that’s when you’re going to start asking yourself ‘How do I want to dress myself today, how do I want to look, how do I want to create my identity today?’”

Beyond simply letting consumers experiment with their fashion, digital fashion allows for more individuals to try out and buy from brands that would otherwise be out of reach. Murphy said part of the goal of digital fashion, in his view, is to make luxury fashion accessible to everybody.

“It was actually some American entrepreneur that said to me how outraged she was that Gucci was dropping digital sneakers for $10,” Murphy said, though the virtual shoes actually sold for $8.99 or $12.99. “I’m like, ‘Why?’ It’s giving kids, it’s giving people that don’t necessarily have the means to buy Gucci sneakers, it’s giving them access to a brand that they love and appreciate. I think it’s the smartest move that Gucci could have done, but I also hope that other brands join them.”

In addition to breaking down the barriers to luxury, Murphy said he envisions digital fashion—particularly given the recent rise in blockchain economies—opening the doors for anyone to become a fashion designer and vendor.

“Everybody’s a videographer and photographer these days, as well,” Murphy said. “Absolutely everybody can make content. That doesn’t mean that they’re making great content…. Of course, if everybody’s going to be a fashion designer, there’s going to be a lot of noise and a lot of awkward things, but the people who are really creative will excel and will stand out from the crowd.”

Are NFTs here to stay?

Where exactly digital fashion goes in the future is unclear. After an explosion in interest in late February, it appears NFTs sales, at least, have dropped off. According to market research site NonFungible.com, the number of sales, total value of sales and active market wallets have all declined over the past 30 days.

But, even if digital fashion should prove to be a fad, NFTs may still stick around. Carrera Kurnik, director of culture and consumer insights at Fashion Snoops, researched some of these potential use cases for the trend forecasting agency’s recent report on NFTs.

The most immediate potential use would likely be as an authentication tool that is paired with physical goods, be it a luxury bag or a rare sneaker. This way, whenever that product is resold, the NFT travels with the object, proving that it is genuine.

According to Kurnik, the framework for such a use already exists. “It’s really just about investing in the scale of your company,” she said. “As I understand it, there’s no widespread app yet, but if you are LVMH, maybe you consider investing in making an app that does that for all your brands.”

Additionally, when companies create NFTs, they can write special rules into the smart contract such that whenever an item is sold, they can receive a royalty. “There is a tremendous opportunity for Nike,” Kurnik said.

“A lot of the shoes in the sneakerhead resale market world are Nike or Adidas,” she added. “They could write into the NFT of their real-world shoe that every time it is resold, 20 percent of that sale goes back to Nike specifically.”

On the flip side, Kurnik said, a company like Nike could potentially write the NFT such that it cannot be resold above a certain threshold price as a way of pushing back against professional resellers.

“It could be a strategy to ensure that real people and users get the access to shoes, to whittle away at the resale market,” Kurnik continued. “But then again, the resale market does help these brands by selling out their shoes.”