As was the case last year, fashion and the metaverse featured prominently at this year’s SXSW, which ran during 10-19 March.
However, several years into the fashion metaverse and NFT hype cycle has seen some enthusiasm seep out of the conversation. There were still those who pointed to the big opportunities that digital immersive tech, like metaverses, offers for a visually creative field like fashion. You still saw discussions of the big investments that major brands are making in both established gaming platforms, such as Roblox or Fortnite, and custom, white label metaverse products to try and connect with Gen-Z and Gen Alpha consumers. Yet, this year more than one voice pointed to falling investment in metaverses by the industry (if you exclude gaming platforms) and growing questions of its near-term prospects given weak user engagement outside of one-off events. Gideon Lichfield, editor-in-chief of WIRED, even started off moderating a panel by questioning why we were even still talking about the metaverse. Panelist Charli Cohen responded, “nostalgia.” The cool kids were discussing Generative AI was the message.
So why is skepticism about the fashion metaverse growing?
In truth, the skepticism is not new and it may be “growing” only from the perspective of the exuberant attitude displayed by panelists at SXSW 2022. Some of the questions may be conceptual in nature. There have long been questions on the wisdom of creating “chief metaverse officers” when the technology was not more complete. Many have questioned the use of the word “metaverse” itself. At SXSW, even those who viewed the growth of the metaverse as “inevitable,” such as Moin Roberts-Islam of Fashion Innovation Agency at London College of Fashion, believed that it may be a rose by another name that is associated with growth of the technology. Instead of metaverse, perhaps “digital worlds” is preferable or the expression we coined: “immersive story-based experiences.” Even among those who had a positive view of everything, such as Lucy Yeomans of Drest, confirmed that while the metaverse is here to stay, we do not know the exact shape.
But how do we measure success?
Panelists did take on the question of how we should reasonably measure success at this stage of the metaverse tech and product development cycle. This is becoming increasingly important now that many in-house teams at fashion brands will need to point to tangible returns of some variety. And this comes amidst large layoffs at meta and Microsoft’s decision to shutter its enterprise metaverse division. So if your organization is looking for tangible ROI then finding measurable success is becoming more important.
The usual types of metrics associated with Web2 were thrown around. Concepts such as number of unique users, return users, time spent on the platform, etc. Alex Holder of GEEIQ and others debated how we compare, say, two second impressions on Instagram versus seven minutes on Roblox so an agenda item is to work out some standard metaverse-specific metrics.
The celebrity talk on the issue of measuring results was delivered by Les Binet. He reminded his audience that the goal of any type of engagement with users is not clicks or even one-off engagements on a platform but long-term loyalty that leaves positive memories. He presented the results of empirical studies demonstrating that 60 percent of sales growth comes from long-term brand building with short-term activations generating 40 percent. The more mature your brand, the more you should be migrating from the short- to long-term strategies. This is useful input for brands looking to move beyond short-term PR spikes from their metaverse strategies to something more meaningful. Binet also cautions, however, that models attributing sales to specific marketing channels need to be interpreted carefully as they tend to overestimate the sales that come from short-term marketing campaigns and underestimate the long-term sales that come from a long-term strategy.
These messages from Binet resonate a great deal with metaverse or other digital fashion strategies. The supply and demand-side of many metaverse and digital fashion efforts prioritizes co-creation and community building. In some cases, this is not always straightforward. Cathy Hackl of Journey pointed out that while the metaverse and Web3 community often discuss “community,” the meaning of this word is not always clear in this context. Regardless, projecting your message into a community certainly will require a long-term strategy, underpinned by a careful content strategy, to build loyalty and those positive memories that lead to repeat experiences.
So where do we go from here?
A key question emerging from SXSW is how profound and enduring is the skepticism that emerged from some of the panels and how far does it extend into the industry. On the one hand, after New York Fashion Week, Vogue Business did express the view that brands were stepping back from Web3 initiatives, including metaverses. On the other hand, SXSW features numerous efforts to view digital fashion through various VR/AR/XR experiences.
As Maghan McDowell, innovation editor at Vogue Business, put it while moderating a panel: all brands want a digital presence regardless of what we call it. Every user and potential client facing surface is a branding opportunity and the goal is to increase long-term engagement.
We agree with Lucy Yeomans that it seems more likely than not that immersive digital environments will remain important to fashion brands. The opportunities for expanding fashion creativity and connecting closely with users are why the industry has been among the first movers in the tech stack. Yet, as Lucy noted, the way that these technologies will take shape is certainly an open question.
In our own bilateral conversation with panelists and brands at SXSW, we posed a number of questions that we believe need to be answered as we evolve towards the next version of the fashion metaverse. Answering these questions will be just as important as improving the metaverse tech stack in order move past the skeptics’ criticisms and build long-term engagement between fashion brands and their fans:
- How do you build brand loyalty through content in these immersive environments?
- What are the themes and trends of user behavior, needs, and preferences? What should the guiding principles or standards for content and user experience within a metaverse even be?
- What stories matter in the metaverse and Web3? Are there specific storytelling techniques that work better within one platform vs another?
- How do you commodify and monetize immersive experiences through storytelling, customizable avatars, and digital asset ownership?
- How do you incentivize users and make digital immersive experiences sticky to bring users back for repeat experiences?
- How do you use Web3 technologies to empower artists, designers, and individual creators through ownership, authenticity, digital IDs, and community co-creation?
- How do you encourage discoverability and findability within metaverses while building real moments of consumer engagement?
- What are the standards, guidelines, and policies the metaverse needs to encourage inclusion, accessibility, and fairness?
Some final thoughts from SXSW
This year’s SXSW kicked off just as Silicon Valley Bank was imploding. The implications of SVB’s failure on tech funding dominated many of our sideline discussions in Austin. Independent of any issues related to SVB, metaverse investments were already losing some steam in 2022. Yet, there was no absence of chatter about the metaverse, or whatever we should call digital immersive experiences, even if it was to call it a fad whose hype bubble had burst. Yet, based on this year’s SXSW, we may not know exactly what the metaverse will become. But, it’s clear to us that the concept of digital immersive experiences is here to stay and that it will have important ramifications for the future of fashion and technology. It will be exciting to watch the pieces come together. Will a slowing in VC funding and wandering eyes now looking towards gen AI slow metaverse-type investments? It’s possible that in dollar terms that is true, but we believe that slowing investment in fashion reflects a maturing of interest in the tech rather than a retrenchment. The industry has leaned so heavily into digital fashion that there is no going back and it is hard to see how digital immersive environments will not be a key part of the fashion landscape.