Every week, The Interline analyses up the most vital talking points from across the landscape of fashion technology news. This analysis is also delivered to Interline Insiders by email.
A confluence of different social and technological factors, including cloud streaming, logistics bottlenecks, and the consumer hype cycle, could be creating the perfect conditions for the metaverse to come of age.
There are a lot of different elements driving the fashion retail market towards carefully curated newness at the moment. As various retail markets approach their full-capacity reopening (with some already there,) consumer spending on fashion is likely to rebound, and shoppers will be on the hunt for newness.
But at the same time, brands and retailers will need to be extremely careful about what products they bring to market, since raw materials are in short supply across a swathe of different industries, and, for the time being at least, shipping and logistics are going to swallow a far greater share of product margins than ever before.
This clash of appetite and achievability could see fashion following the route that other industries have already taken and prioritising the production of certain categories at the expanse of others. Consumer electronics remain in short supply outside of Apple products, and that could potentially remain the case well into next year, and the same shortage of semiconductors is having a marked impact on the automotive industry as well.
Fashion may not make use of microchips, but the same fundamental forces apply. It’s incredibly difficult right now to hit volume and margin targets simultaneously, and one of those variables has to give.
But, as we’ve already mentioned, consumers’ desire for new product is not waning; despite the rise of secondary markets, this Amazon Prime Day saw fashion enter the top-selling categories for the first time in the history of the “selling event”. And Amazon has also made headlines for, essentially, supercharging the market’s desire for newness by borrowing from a playbook that fashion has been criticised for using before and destroying hundreds of thousands of unsold items per week. Suffice it to say that Amazon was probably not selling second-hand fashion to reach that new milestone.
As a consequence, we could be witnessing the ideal conditions for the digital fashion market to boom: disposable income clashing against an unplanned scarcity of product could easily lead shoppers to spend on non-physical items. And while – as we’ve previously reported – the NFT market is currently operating well below its peak, one of its key figures, digital artist Beeple, has this week announced a new platform selling NFTs and accompanying physical embodiments of “iconic moments” from sports and world events. The Interline has been notably sceptical of knee-jerk applications NFTs in the past, but since WeNew requires the input of either the participant in the moment for sale or their estate, it essentially circumvents the issue of copyright trumping blockchain ownership claims.
All of which is a roundabout way of saying that the market is primed to spend on intangible things. From a fashion brand’s practical perspective that means finding ways to offset the shortfall in sales of physical goods (at least while materials and logistics remain bottlenecks) through the sale of digital ones. And while NFT platforms will no doubt be part of that strategy, many brands will also be paying serious attention to the sale of videogame cosmetics and placements within other interactive experiences.
Two stories from this week capture that crossover perfectly. First, the sneaker hyper culture shows no signs of abating, with trainers-only marketplace GOAT securing another round of funding that values the company at close to $4 billion USD. Second, the smooth onramp between the game-playing demographic and the purchasers of scarce and collectible fashions (such as sneaker releases and collabs) was demonstrated in an investigative piece that showed how community and communication app Discord has grown beyond its videogame roots to become home to hubs of people coordinating their strategies to buy sought-after shoes and menswear.
To wrap a bow around it: the potential for fashion to truly engage with both the videogame industry and other applications of real-time 3D is perhaps at its peak, which lends credence to the idea that the previously-nebulous metaverse could actually be realised sooner than anyone expected.
Which brings us to a conclusion that unifies both of this week’s themes: scarcity, and the potential for new, immersive experiences. Previously, a key impediment to the uptake of the metaverse concept has been the fact that not everyone has a device capable of running games or other interactive experiences at full fidelity. Even Fortnite, which comes the closest of anything to fulfilling the vision for a universal metaverse platform, still requires local processing power (CPU and dedicated or integrated GPU) to run, which places a constraint on the number of people it can reach.
And this same limitation will apply to any interactive experience where digital fashion or branded cosmetic items can be sold: you can’t sell a style to people who don’t have the hardware in their hands to show it off.
But this month also saw plans for hardware-independent game streaming begin to firm up in a way that’s only been hinted at before. With the upcoming launch of apps for televisions and other non-traditional gaming hardware (added to the apps it already has for desktops and mobile devices), Microsoft’s XBox division has made its intentions clear: universal access to videogames wherever a data connection exists, with CPU and GPU in the cloud, and the resulting video feed streaming to the player’s device.
Time will tell how successfully this strategy can expand the videogame market, but if Microsoft is able to create the fabled “Netflix of games” and to apply the same technology to other interactive experiences, then the fashion industry could very quickly find itself with not just a captive market for the sale of digital fashions, but a full-blown metaverse to sell to. And that’s not something The Interline would have predicted saying this soon.
And the best from The Interline this week:
This week saw the publication of two exclusives: a discussion with a retail CEO, and a detailed case study of a major brand’s digital transformation.
First, we ran an interview with Rebecca Morter, Founder & CEO of retail concept and community hub Lone Design Club, which tackles the critical question of what shoppers are going to want from physical retail in what are hopefully the waning days of the pandemic, and where technology has (and hasn’t) been embraced by both consumers and in-house brand and retail end users.
This is also a theme that we’ll be addressing in next month’s free-to-attend workshop that The Interline and Placer.ai are hosting together. Titled “Rebuilding Retail From The Right Data Foundations,” the workshop will follow a similar format to past events from The Interline, with a debrief, open discussion, and practical advice for retailers and direct to consumer brands who are facing difficult decisions.
The workshop will be free to attend, and is open for registrations from today.
Finally, this week marked the publication of The Interline‘s first exclusive brand and technology case study: an examination of how 3D assets and digital materials from Swatchbook allowed footwear giant New Balance to weather the disruption of COVID, unify its supply chains, and seize new opportunities afterwards.
Look for more exclusive case studies of how major brands are approaching their digital transformations in the near future.