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.

The Interline chairs day three of this year’s 3D Tech Fest, on 15th September.

Later this month, our Editor will be taking the chairperson’s role for the third day of the 2022 3D Tech Fest, hosted by Alvanon. Ahead of the release of our detailed DPC Report this November, Ben will be making the argument that the time has come to de-compartmentalise digital product creation workflows to match the massive inroads that digital assets have made both up and downstream.

This is a topic that Mark Harrop recently tackled in considerable detail in an exclusive article for The Interline, and it is also a timely one for our readers, given the increasing weight that’s being placed on digital garments, footwear, and accessories in eCommerce, in real-time applications, and across a wide spectrum of in-house and supply chain use cases.

The entire 3D Tech Fest is free to attend, and fully virtual, and takes place from the 13th to 15th September. As well as Ben’s opening address and his ongoing contextualisation of the sessions that make up the third day (titled “What’s Next In Digitization?”) the entire, three-day agenda will be available to both stream live, and to access on-demand for registered viewers who can’t attend in real-time.

Digital fashion could break the mould in an unexpected way: by rebalancing primary and secondary revenue streams.

The peaks and troughs of the NFT market have been well documented – as has the sector’s steady slide towards the latter. Across most applications, judged by most reasonable metrics, the initial goldrush for acquiring first-hand, scarce, digital goods is over, and NFTs are – for the time being at least – being left to simmer. 

This is not necessarily evidence of asset collapse as much as it is a novel market finding a waterline (high or low is still to be determined). There is still demand for token-backed goods, and there is still an influx of new supply of the same. Even if the majority of that supply craters in value after its initial launch cycle, all but the clearest scams retain some measure of trading activity even if no new tokens are being created.

This sort of low ebb is, clearly, not the NFT mass market that speculators wanted. And on that basis it remains clear that the money to be made – from perspective of the individual who buys a blockchain-backed asset for the purpose of selling it on at a profit – is heavily concentrated around that asset’s initial launch window.

This model of valuing digital assets (specifically digital garments, footwear, and accessories in the fashion industry’s case) is, though, weighted towards the asset owner, when in fact this week’s news provides a strong case study for the value an active ongoing market for digital assets can provide to the royalty holder.

A far-reaching study of brand activity in the NFT market (conducted using public chain data) has revealed that, to date, one of the largest apparel / footwear brands has managed a unique feat: bringing in nearly as much revenue from the secondary NFT market as it did from initial NFT sales. And, in unison, legions brands who have been trying to achieve the same balance in the used market for physical goods, have suddenly taken notice.

Royalties are, in the blockchain space, slightly more complicated than in traditional licensing, but broadly speaking the principle is the same. At a high level, the party that mints the initial asset is able to command a portion of each ongoing transaction that asset undergoes – meaning that every time a digital sneaker, for example, changes hands, the original minter collects a royalty.

In practice, this works less seamlessly than that explanation makes it sound. Royalties are, by and large, gathered by the NFT distribution platform owner, who then passes them on to the party who minted the NFT(s) according to a fixed or flexible schedule. This, The Interline suspects, will not be a model that successful fashion brands will be happy with long-term, since it closely resembles another model that direct-to-consumer businesses are bucking against: online marketplaces for physical goods. Royalties can also be calculated after the platform holder has extracted their listing / processing fee, creating an even closer parallel between NFT markets and eTailers, or the owners of resale platforms.

This could lead quickly to the same quandary that currently plagues circularity. Brands are, by and large, happy for their goods to lead longer lives than ever, but they are also commercial enterprises, and if they can build a service business around those extended lifespans (repairing, rehoming, renting) or achieve a percentage each time a used garment is resold, they are essentially duty bound to take that opportunity.

Practically speaking, seizing that opportunity is likely to be synonymous with owning the secondary channel, rather than allowing it to be dominated by third-party platform owners. The current royalty model is probably unsuited to scale in isolation, and for brands that wish to control as much as possible of the direct-to-consumer physical channel, there is a strong argument for doing the same with the digital channel – especially if the potential exists to balance first and second-hand sales.

There is also a strong commercial argument for treating secondary markets this way (across both physical and digital) when we consider that first-hand retail sales are becoming increasingly hard-won. From unionisation of retail workers to high costs of goods sold, the initial retail market has become more and more expensive and risky to operate – especially when compared to the passive income potential of wholly or partially-owned circular business models and royalties.

This is not to say that the secondary market is any sort of panacea for retail’s challenges. For every headline that showcases a new demographic making a success of selling used fashions (including, this week, celebrity stylists emptying their closets) there is a counter-headline about a brand watching revenue, customer engagement, and reputation escape their control. And while some organisations (especially the larger-scale ones) will be able to wrest control back by taking ownership of secondary channels, this door will be closed to many.Nevertheless, for all the uncertainty around the future of digital fashion as a business model, this evidence suggests that it could, at the very least, offer a way to redress the balance between the money brands make for initial sales, and the value they can extract from the expanding market that begins afterwards.

Coming November: the first fashion DPC Report.

Behind every digital asset that reaches a downstream consumer – either as a digital garment, or as a way of communicating the visual or performance attributes of a physical one – must be created digitally in the first place. This growing demand for digital assets that can be used outside of design, development, and merchandising is placing increasing importance on the tools and processes involved in bringing them to life – an ecosystem that’s now ready to do justice to the label of “digital product creation“.

We recently announced that The Interline will be publishing a report dedicated to digital product creation (DPC) in fashion, for release this November as a free download to all our readers. Packed with exclusive editorial, interviews, opinion pieces from DPC brand leaders, market analysis, and profiles of the key technology vendors serving the segment, the first DPC Report will capture the evolution of fashion’s digital-native workflows at a critical point in their development – as well as providing a roadmap for the future.

Our brand, retail, and manufacturing leaders are encouraged to mark their calendars for the report’s release in November. If you’re a member of our technology audience – whether you work in core 3D design and simulation, or digital fashion and eCommerce – get in touch with The Interline to explore how your solution or service can be included as part of this upcoming encapsulation of the extended value of digital product creation.

And the best from The Interline:

It may have been the summer break, with many people enjoying time out of the office (or taking their first post-pandemic holidays) but The Interline kept running. Since our last newsletter, we released the following exclusives.

The second instalment in our partnership series with The Digital Fashion Group, focused on making sense of the Metaverse / Web3 business opportunity for fashion brands and retailers, concentrated on the perspectives of industry leaders.


Featuring quotes from Epic Games, AnamXR, DRESSX, HYPE, and DRAUP, this article builds on the grounding set out in the first editorial in the series, and provides even more concrete guidance on the direction the industry is likely to take to realising the potential of real-time and interactivity.

We also released an exclusive from Dakota Murphy, which examines what it means to make a sustainability commitment in a digital-first world.

Like many other industries, fashion is wrestling with task of generating accountability and transparency, but apparel, footwear, and accessories are among the more complex and opaque product categories when it comes to data-backed disclosure. In turn, this complicates the consumer decision-making process and increases the chances of brands missing out on potential sales. Dakota sets out a simple set of ways that fashion brands can make use of technology to overcome that lack of visibility, and to make more confident sustainability commitments.

Finally, we published our report on SOURCING at MAGIC, which took place in August in Las Vegas, and where The Interline partnered to showcase fashion technology in action for an entirely new audience.

Bringing together digital materials, digital product creation, supply chain transparency, mobile commerce, and a range of other technologies, the new SOURCE Lounge concept pioneered at this August’s SOURCING at MAGIC event covered a lot of the fashion technology spectrum

Look for more from The Interline in the very near future, including a special podcast episode, a new feature from our latest expert contributor, and more fresh content coming soon.