Refreshed for 2022, our regular analysis selects one or more news stories from fashion technology, and presents The Interline‘s take on why they matter to our global brand and retail audience – as well as what they might mean for the longer-term future of fashion. As always, this analysis is also delivered to Interline Insiders by email – and signing up continues to be the best way to get a fresh look at the fashion technology news, completely free, in your inbox.
In unsurprisingly paradoxical fashion, Meta (the company formerly known as Facebook) saw an increase in its share price this week despite a very murky revenue picture. Why? Because in a market where scale and sustainable acquisition and retention of users are apparently everything, Meta managed to reverse the trend that has paralysed other big tech stocks by staunching the outflow of users – keeping more people in its ecosystem than many expected.
In a lot of ways, this doesn’t make a great deal of sense. Company valuations are not, really, supposed to rise when the company in question has seen a slump in revenue growth that belies a potentially fundamental problem with its core business model. After all, what use is having more people on your platform if you’re not selling ads to them as well as you used to? That is, at best, a wash.
But Meta, of course, is no longer solely in the business of selling Facebook ads. After the hyper-visible renaming initiative of late 2021, Meta has committed in a significant way to being the name that end users associate with the metaverse. In fact, this week’s filings revealed that the company has, since it founded its metaverse division in 2020, lost more than $20 billion in the endeavour.
Why persist? On the one hand, the answer is simple: because the writing is on the wall for the established social media model. In the near term, Meta may out-compete other social networks by retaining users across its current products – Facebook, Instagram, and WhatsApp – for longer, but the longer-term viability of that business model is certainly in doubt, not least because upcoming codification of internet standards is paving the way for the imposition of even tighter content moderation and transparency standards on platforms like Facebook.
In that scenario, a pivot is the only logical action.
On the other hand, Meta is allocating the money and resources it is because the company believes – probably rightly – that it’s been able to secure first-mover advantage when it comes to acquiring customers for the Next Big Thing. And if it’s able to acquire those users, it’s aptitude for keeping them could, perhaps, be ported over from present to future applications.
Interestingly, though, that Next Big Thing may not prove to be something that users actively realise they want – at least not by name. Which is likely why Meta – against a backdrop that’s seen searches for the term “metaverse” fall to around a quarter of their peak – is now repositioning itself to sell entry points to the metaverse, rather than selling the metaverse itself. And as interesting as that shift is in isolation, it could also have profound implications for how the fashion industry talks about and, eventually, sells its vision for the metaverse.
Earlier this week, Meta announced the opening of its first retail store under its rebranded umbrella. In some respects, this isn’t a particularly momentous move. Other software companies that have branched out into hardware – notably Microsoft – have also opened “experience” locations to allow people to go hands-on with their products.
The key difference, though, lies in the fact that laptops, tablets, and phones rarely need to be experienced in-person for the buyer to make an informed decision. Specification bumps, new colours, new form factors, and better displays (with the exception of high refresh rates) can be, at the very least, understood and approximated through other channels. You can, for example, buy a new Surface Pro or MacBook Pro without ever touching it, and still be relatively confident that what you’re getting will do what you expect it to do.
This is absolutely not the case for virtual or mixed reality. And, by extension, it isn’t the case for the metaverse either – at least not in the way that Meta defines it, as the embodied internet. It may sound clichéd, but these are experiences that have to be trialled first-hand for their benefits to be understood.
This, then, is the purpose that Meta’s retail store (and presumably its broader retail strategy) is intended to serve. For people to understand the potential of the metaverse as a new model for interactive, immersive experiences, they need to put on a VR headset – specifically the Meta Quest 2, which is what Meta is currently selling in advance of the launch of its enterprise-focused headset later this year.
Crucially, the retail store is selling a way into the metaverse, rather than the metaverse itself. Putting on a self-contained, affordable, accessible, polished device and launching intuitive software (especially if it makes use of hand tracking) remains the quickest and easy way to convert people to the potential of VR, and removing barriers to that experience is likely to lead to the sale of quite a few more Quest 2s.
But will it help sell shoppers on the metaverse? And will it overcome people’s instinctive distrust of Facebook for long enough for them to try it? The answer in both cases is that it may not even matter:
“If they build a better experience that can kick off those network effects and get a lead on others who are going to enter the metaverse, that can be enough, independent of trust.”
That’s a quote from Andrew Lipsman of Insider Intelligence, speaking to Modern Retail. And it’s a sentiment that The Interline largely agrees with – especially when it’s contrasted against the way that the fashion industry has tried to sell its metaverse ambitions lately.
Words like accessible and seamless are, for the most part, not applicable to the corner of the metaverse that fashion has cordoned off for itself. We have previously written about the mixed fortunes of the first Metaverse Fashion Week, and those thoughts remain valid: there are far too many basic building blocks still unaddressed for anyone to say with any degree of confidence that fashion metaverse is ready.
By contrast, the consumer-facing metaverse of VR video games, chat applications, and virtual offices is not just ready – it’s reached the point of retail. And although there is only one location for that retail experience right now, it’s clear that Meta’s best (perhaps only) route to even more widespread adoption is to duplicate the concept many times over.
This disparity illustrates a critical difference between the incredibly amount of work that fashion brands and retailers have put into creating physical and digital retail channels that have been polished to perfection, and the opaque experience currently provided by their approach to the metaverse, which can be accurately summarised as selling an unfinished vision rather than selling a reality – something that Meta itself has this week demonstrated it considers a dead-end.
This is not to say that the metaverse itself is destined to fail. Far from it, in fact, as Accenture’s excellent report – also published this week – documents. Instead, the key takeaway from this week’s news is that making the vision for a fashion metaverse (or rather fashion’s presence in whatever metaverse solidifies into shape in the future) a reality is going to mean selling an easier entry point here and now. Not one that requires crypto wallets and dedicated GPUs, but one that can be effectively sold at the point of retail.
For all the justified criticism that can be levelled at Meta’s lasting impact on the world, the company has proven that if it can bring users in, it can keep them. And as Apple ably demonstrated this week by setting a record for services revenue, being able to reliably sell new offers to an existing customer base is a hugely profitable approach.
For the metaverse – and especially for fashion’s place within it – that’s going to mean either figuring out how to sell better ways in, or aligning the industry with the company that already is.
And the best from The Interline:
Since our last news analysis, The Interline has published some standout features from both contributors and collaborators.
First, we collaborated with buzzy virtual footwear platform Futures Factory to shine a spotlight not just on its fast-growing community of sneakerheads and designers, but also on how the collector mindset and the creator economy could be combining to create the perfect conditions for a new model for the sneaker industry.
Next, we published our extensive report on the Future Fashion Disrupters event, which The Interline and The University Of Manchester partnered to create at the end of last month. Across a full day, students, industry figures, and a roster of forward-thinking technology vendors came together to showcase how the “end to end” connectivity vision can now be realised. From AI-assisted material digitisation to factory capacity planning, the exhibition space and the interlinked keynote speeches that followed demonstrated digital transformation on a grand but, above all, achievable scale
Next we have an exclusive op-ed from Izzy Spinley of PaperTale, who made the case for there being a watershed moment for truly scaling blockchain in fashion just around the corner… provided one compelling proof point emerges.
Our next collaboration – this one in partnership with disruptive 3D CAD company Clothing Tech – also tackles a well-worn buzzword within fashion, and interrogates it from a fresh perspective. With digital product creation (DPC) top of many brand and retail investment agendas, the industry is openly wrestling with the question of what it means to scale the creation of 3D assets. But behind that objective is an open question of whether brands, consumers, and partners should continue to look at digital assets as tools for visualisation, or whether the opportunity now exists to reframe them and rearchitect them as methods of product definition.
The Interline also sat down with another company that’s actively working to bring a vision – in this case it’s on-demand manufacturing – to life in a sustainable, scalable way. As one of the most prominent voices in the movement to transition not just some, but a majority of apparel production to in-country or nearshore demand-driven models, Jess Fleischer of Son Of A Tailor has a lot to say about the future of production.
Finally, we found time to release one last collaboration – this one aimed at taking a critical look at how virtual try-on has consolidated around just a single approach (consumer body scanning) when an compelling alternative that makes use of existing product photography already exists. Read the full feature for our breakdown of why digital try-on matters, why the most popular method isn’t necessarily the right one, and why Zyler’s machine-learning driven strategy could blend the best of two worlds.