The luxury NFTs from premium brands can skyrocket in their value, potentially reaching $56 billion by 2030, and all thanks to Metaverse.
As the production of NFTs continues to create new forms of fashion consumption, more and more premium brands are investing in their digital collectibles businesses. The demand for digital fashion and goods will grow significantly in the coming years, as more and more aspects of people’s lives are moving online.
The Metaverse ( virtual spaces where people can interact with each other through personalised avatars) it still has long way to go, but without a doubt is a groundbreaking concept. Within this short time frame they have created spaces of opportunities for luxury brands to benefit from digital collectibles and the rise of “social gaming”.
The birth of the first internet or Web 1.0 only allowed people to connect to information. Web 2.0 facilitated people to connect with others and it was iteration of social media. But Web 3.0 better known as Metaverse, will become whole new fascinating virtual reality, where people will search for more then interaction and information – they will experience a genuine virtual reality immersion.
NFT and Metaverse as mega opportunities for premium brands
Without a doubt, this immersive experience will open up a fantastic opportunities to premium brands, as the personal avatars of the users will wear clothing and use items as manifestations of individualisation and personal expression, very much like they would in the physical world.
The global platform Roblox is an example, where one in five players will change their avatar every day, very much like we do in the real world when we get up in the morning and get dressed. Other platforms such as Fortnite, are already providing insights into what it will look like for the Metaverse to have malls, by establishing a “Retail Row” and later a “Mega Mall”.
In May 2021 Gucci hosted its first virtual exhibition for luxury fashion on the Robox platform, where players can purchase digital models of real Gucci products for a small amount of in-game currency. Once the exhibition run out of digital assets to sell, the players began to sell their NFT items on auction. One of the the items ( Dionysus handbag) sold for $4.100, which was $700 higher than the retail price of the real-life version.
In September 2021 French premium brand Balenciaga launched a digital line of Fortnite fashion apparel, which could be bought with in-game currency for approximately $8. Crypto- gaming experts has stated that the social gaming segment of digital assets can add around $10- $20 million to the luxury goods market.
Another exciting venture for luxury NFTs was in September 2021, when designer Karl Lagerfeld released 777 NFTs on THE DEMATERIALIZED ( a digital fashion marketplace) to be sold as around $87 each. His pieces were sold out in a matter of seconds, which was another sign of igniting curiosity of the new pathway for the luxury goods market. We can’t be sure if the reason for those sales were due to the hype of something new and innovative, or maybe people truly are awaken to how digital property can create amazing opportunities- ether way, the results of that launch has surprised us all and exceeded our expectations beyond belief.
Despite of the success of Karl Lagerfeld, Gucci and Balenciaga, our physical world still maintains a capital on luxury fashion brands due to their dependence on the physicality of clothing to connect with their costumers. Brands that are less accustomed to selling digital goods will have different relation to NFTs and the transition of their industry, as so many of their qualities rely on physical materials.
While luxury brands have made an initial splash, strategists believe that brands that fit into the “soft luxury” category ( ready-made clothes, footwear, leather goods etc) will have the most profitable position within the market, where “hard luxury” sector ( like premium watches and jewellery) will less likely achieve the same level of success.
The Metaverse will help brands to expand their audience, and give them opportunities to attract costumers of a whole new age group that they would not usually connect with as consumers. The current demographic of Roblox players consists predominantly of teenagers, while 70% of sales in the fashion industry are contributed by women.
Metaverse is based on a decentralized virtual space, and many creative people will have fantastic opportunities to succeed within those meta-universes. Current market capitalization on NFT’s is $48,974,915,064.
It’s obvious that the Metaverse is here to stay, and while its still in developmental stage, our lives are already intertwined with this fascinating digital universe.
While there is certain fear about this new unknown world opening up in front our eyes, let us not forget the many dangers and uncertainty about our real world that we face today. This new digital realm can open up amazing opportunities that will allow people to breathe a sigh of relief, as the virtual world is not going anywhere and we are becoming more and more part of it every day.