How Web3 could Change the Fashion Industry

The advent of Web3 has already seen a number of major fashion brands like Prada, Gucci, and Dolce & Gabbana warm up to its significant potential and jump straight into the metaverse. Moreso, companies like Adidas and Nike reportedly generated a whopping $137.5 million in NFT sales in 2022 so far.

Fashion's curiosity with Web3 looks set to deepen, with the value of the virtual fashion industry expected to reach a staggering $50 billion by 2030, according to Morgan Stanley. But as Web3 is still in the early stages of adoption, in what ways exactly could digital fashion be used as a revolutionary tool to evolve the industry?

Creative freedom

Web3 fashion has the potential to become a boundary-breaking realm where the only limit is one's imagination. Digital avatars present no real-life constraints on fabrics, usage, or design, enabling people to embrace and express themselves more freely regardless of gender, sex or size, and designers are able to flourish, creating as they wish.

New revenue streams

NFTs and the $176-billion gaming industry can generate completely new (and potentially very profitable) revenue streams for the fashion sector. Why? Tech-savvy and younger cohorts are increasingly spending their time in virtual worlds: Gen Z spent an average of eight hours per day on their screens in 2020, and one in five Roblox gamers currently update their avatars daily, showing the enormous potential for fashion companies to step in as players are keen to elevate their online identities.

As McKinsey's State of Fashion Report for 2022 notes, another appealing aspect of virtual worlds for many is the possibility of the engagement they offer through community building. Community is at the core of Web3's decentralized foundations, and fashion brands can lean into this in a number of ways.

Louis Vuitton already has, having launched a video game to celebrate its 200th anniversary featuring collectible NFTs partially designed by Beeple, as has Gucci, with the creation of the Gucci Garden on Roblox which has so far attracted over 19 million visitors.

The emergence of new and exciting metaverse games like Fashion League, which will be the first female-centered mobile fashion game on the blockchain, is also heavily community-first. Brands can display their virtual products and collaborate with the community directly. Players can also build and expand their own fashion store, as well as become virtual 3D fashion designers, all the while selling, trading, and transferring their assets across the metaverse.

Leveling the playing field

Web3 fashion has the radical potential to shake up the fashion hierarchy by improving accessibility thanks to its borderless nature. Both new and established fashion creators have the same likelihood of creating a successful metaverse-native brand, without ever needing to be physically based in expensive fashion hotspots like London, Milan, or New York. We've already seen overnight success stories, such as the previously unknown cyber fashion company Tribute Brand finding Web3 recognition, and there is no reason why this trend isn't set to continue.

Providing sustainability

Web3 fashion could be the pragmatic answer to the industry's huge sustainability issues, which have been accelerated by the widespread desire for fast fashion. In 2020, a McKinsey study concluded that by 2030, fashion will be responsible for a staggering 2.7 billion metric tons of carbon emissions a year if no change is implemented.

Fortunately, a recent study from Cointelegraph suggests brands could reduce their carbon footprint by up to 30% if they replace physical items with digital clothing. And even if labels chose to have a physical presence, digital assets could still help them to reduce the impact of the entire fashion lifecycle and mitigate excess stock by having digital showrooms, runways, and shop fronts showcasing hyper-realistic renderings of their items. Customers could use their avatars to visit different stores and try on clothes before making a purchase, meaning companies need only put these items into production once they've actually been purchased.

Web2 has changed how we buy and wear clothes, but Web3 fashion shows it has the very real possibility of changing the way we even think about clothing, as people move beyond the restraints of the physical world.