Is the fashion industry using the ghost of the Metaverse as a distraction from more deeply-rooted issues? In this exclusive opinion piece, specialised fashion and apparel talent scout Richard Donne starts to peel back the label.
In March 2022, 108,000 ‘Metaversers’, some of whom were adorned in virtual flames, flocked to the inaugural show of Metaverse Fashion Week (MVFW). Hosted in Decentraland, a virtual world, the show raised the curtain for major brands looking to make their pixelated splash on the industry’s future. As businesses unveiled their Metaverse identities, authorities like David Cash of Cash Labs, the curator of MVFW, preached to audiences the virtual world’s potential to drive the fashion industry’s sustainability agenda by offering a viable add-on to physical fashion.
In short order, the Metaverse label, applied as being a creative platform for digital experiences, had garnered impressive attention from the clothing sector.
Unfortunately for all of the fanfare surrounding MVFW, sustainability-educated onlookers likely left the three-day show feeling somewhat unsatisfied. Despite the wider Metaverse’s forecasted growth – to a whopping 13 trillion USD by the year 2030 – virtual high streets look to play a minor role in the digital lives of 60% of the world’s population (the number expected to take up avatar existence by the same year).
There is a cold logic behind this way of thinking: for Decentraland and its fashion retail real estate owners to generate measurable input into the sector’s sustainability crisis, they must replace a meaningful amount of physical wardrobe space with virtual. To qualify as a net sustainability benefit, increased sales of digital fashion must be accompanied by decreased sales of physical goods.
In place of having the data to substantiate this kind of net benefit, Metaverse advocates are instead keen to demonstrate that digital fashion showcases enjoy broad, diverse social reach – allowing them to spread the sustainability message to new audiences.
But while events like MVFW have enormous potential to educate consumers in new ways, teaching in the sector has proven to be a rather unprofitable calling. To put it bluntly: using digital experiences to encourage people to buy more sustainably is likely to be putting too much separation between advice and the point of action.
What the Metaverse does have, though, is a loudspeaker – one that draws in the coffers of investors and brands who wish to market to new demographics in new ways. That loudspeaker, though, is not free to use. And the fear amongst analysts and pundits is that money spent on digital follies could be taking precious capital away from the supply chain, where most emissions exist, turning Metaverse events into echo chambers awash with empty green talk.
The chatter has proved useful, though, in unifying brands that have strong rivalries. For the sector to create meaningful impact, collective action is required among heavyweights – and this is something we’re seeing being put into practice… to some extent.
LVMH, Prada and Richemont’s Cartier recently founded Aura Blockchain Consortium, the first alliance of long-time adversaries in both the physical and digital realms. Its mission? To address three key industry challenges: responsible sourcing, sustainability and (ironically) authenticity. The Consortium’s founding team consists of executives across strategy, innovation, technology, marketing and design, but no board member boasts deep expertise in sustainability, circularity or responsible sourcing (loosely defined as ‘green friendly’ and ‘community friendly’ supply chain activities). To me, their leadership team seems to be geared towards producing what fashion sustainability advocates fear: bright ideas with uncertain delivery.
Unfortunately, so far, the consortium and its star-studded roster has indeed failed to deliver impact on a significant scale. After a year, Aura has just one case study that looks at after-sales service performance, and not at the core problems that contribute to fashion’s reputation for overproduction, pollution, and all-around unsustainable working.
In many ways, this should not be surprising. Premium-priced luxury fashion brands face deep-rooted issues with their digital missions: their success is often measured by the human desire to be seen. Big spenders live on the rush that is turning heads at the Met Gala and not on the look of a Gucci belt on a Fortniter killed in action. The numbers aren’t yet in, but I expect the data to show that big spenders crave real world attention. And whilst celebrity-strutting brands do deserve their scrutiny, it’s the retailers that sell to the everyman who create the most emissions.
When Steven Vasilev started RTFKTstudios, as an NFT developer he had little clue that his firm would headline a series of major pixelated land grabs by accessibly priced brands. Since Nike’s acquisition of RTFKT, we have seen an acceleration in Metaverse assimilation from fast fashion and athletic wear brands. From a brand positioning perspective, these investments have largely paid off.
H&M, Zara, Adidas, Under Armour and more have all announced Metaverse plays that are positioned to factor into their sustainability goals. But at the same time, low-priced sweaters and polyester running tops find themselves on top of the garbage heap far more frequently than luxury items, which tend to have longer lives as commercial properties and as wearable garments.
As an example: Game of Thrones heroine Maisie Williams was enlisted by the Swedish fast fashion monolith H&M in 2021 to be a unifying face between the group’s sustainability drives and its virtual programs: a snappy collaboration with digital brand Animal Crossing, educating gamers on about vegan collections; and H&M’s real-life garment recycling system, Looop – a technology making circularity reality, giving old garments new life, albeit in a different form.
The machine Looop, co-developed by Hong Kong’s Research Institute of Textiles and Apparel, sits inside a Stockholm retail location, churning old threads into new ones in front of shoppers. The hardware’s capability offers a look at what possibilities exist in this space, and educating audiences in the Metaverse using the right tools for those environments will no doubt foster a more conscientious digital shoppers.
But the fact remains that one of the Metaverse’s sustainability bottlenecks is its limited fashion audience. The virtual ecosystem still reaches only a small pool of fashion consumers; in lieu of being able to achieve crossover success, universes like Decentraland are reaching a very rare splicing of pre-existing gamers who care about their real-world aesthetics. This demographic remains far and away from the customer profile that’s consistently on the hunt for style, and is constantly buying new, disposable garments.
In contrast, by bringing Looop closer to its constituents, H&M can reach the physical audience it needs to. However coverage from one store alone is but a drop in an ocean of clothing waste. For Looop to have real sway it’ll need to recycle old customers into enlightened ones far beyond Sweden’s borders, bringing us toe-to-toe with innovation’s oldest enemy: scale.
To be clear: I am no sceptic. The Metaverse is wrapped head to toe with potential, but it needs to be called out for the benefits it’s creating now. With waning digital ad performance from Meta and Alphabet, fashion businesses now have new ways to hyper-target and hyper-engage with audiences. Digital realities like Decentraland have measured returns of 6.5X greater on advertising spend, despite their limited audiences.
Chasing the tens of billions of dollars in market share up for grabs is a rational play by retailers, and the Metaverse may yet prove to educate consumers on the importance of reuse and reduced consumption. However, with the world’s clock quickly ticking, supply chain sustainability initiatives could be losing out. Scope 3 emissions, which include the production of materials, account for over 90% of the sector’s negative inputs. The fabric and textiles supply chain is located far away from the consumer and this is where green momentum can be generated. Virtual Reality could be drawing away capital from where it is needed most.
As a result, many critics have labelled this new means of engagement as another form of “couponing”, more likely to fuel increased purchasing than to replace physical wardrobe space. So, judged by the metric we established for success earlier, digital fashion is not delivering a net benefit by replacing physical sales with digital ones.
But are direct investments in sustainability solutions faring any better?
HSBC knows a thing or two about the perils of supply chain sustainability and technology investments. The global bank spawned a digital sourcing platform in the year 2019. Formerly known as Serai Trade, the company ceased operations earlier this year, citing challenges with commercialisation as the cause of its demise. The start-up had been injected with tens of millions of USD with the mission to simplify global trade. After a slow start, Serai found its footing, developing a traceability product that saw sign-ups from major retailers who found adoption worthwhile in already complex operating systems. Its extinction serves as a missed opportunity.
The fashion sustainability and supply chain sector rarely sees the entry of a well-funded and well-marketed firm. HSBC may have lost patience with the start-up, but they were not alone in causing its closure. Its lack of customer traction may be its own responsibility, however retailers and the world will have to live with the what-ifs.
Sadly, while direct investment in this case failed to manifest into greater success on moving the needle of sustainability, if the industry is going to spend on educating consumers and value chain partners, and on providing platforms that allow for change, then that investment should, logically, be funnelled to helping realise that transformation.
Serai’s departure creates a hard to fill void, and fashion companies will need to realise that if they’re going to hit lofty sustainability targets they’ll need to do so supported by a robust ecosystem, relying on the speed and creativity of disruptors. Serai will soon be a fleeting memory and customers will never know of its existence. Herein lies the problem with supply chains are in a big way disconnected from end customers – whether those consumers are buying physical fashion, or discovering the brand through a digital experience.
Brand collaborations like Aura Blockchain Consortium and jazzy virtual events featuring celebrity ambassadors have the power to generate influence. But they’re far removed from the chemical runoffs from dyeing processes flowing through Dhaka’s Buriganga river. More innovations like machine Looop are required within the global supply chain if the sector is to make a dent in its ambitious goals.
Perhaps retailers should showcase the supply chain’s complexities within virtual reality, taking audiences to production lines on factory floors. However, a 6.5X greater return on advertising spend for retailers won’t likely be squandered, especially as the industry enters into another period of economic uncertainty. The ‘verse’s impacts are still too early to measure; until then we must hope that Fortniters and other Metaverse users continue to adorn yesterday’s sweatpants.
