Our first entry discussed digital fashion’s ability to enable self-expression in a more sustainable, inclusive, and fluid manner. The second entry covered how the pandemic accelerated digital fashion at scale: what was once niche and out of reach is now relatively accessible and considered almost a natural progression of self-expression.

Ever since our last study, digital fashion, along with its adjacent developments, including 2021’s most-talked-about topics such as the Metaverse and NFTs, has commanded significant attention from both the technically-inclined and the general public. With digital fashion’s greater opportunity for mass adoption comes the growing need for brands and designers to critically view it from multiple lenses.

So to broaden our point of view on digital fashion, we sought out digital fashion pioneers, technologists, independent creators, and business owners, asking them to give us their take on where the industry is heading and its implications.

Our article proudly features reflection and foresight from experts, including Marjorie Hernandez, Co-Founder and Managing Director at LUKSO and Co-Founder of THE DEMATERIALISED, Anne-Christine Polet, Head of HATCH & STITCH, and independent creators; Erika Wang, Founder of shiu_studio and Taskin Goec, Founder of Maison Taskin.

In this piece, we uncover five key themes that outline the opportunities, potential limitations, and considerations of digital fashion’s future. These themes cover topics that are now closely linked with digital fashion and online culture more broadly:

• Sustainability: digital fashion’s potential to right physical fashion’s recurring—and often green-washed—wrongs.
• Self-expression: the compartmentalisation of self and the digital footprint that immortalises each facet.
• Status: the use of material goods and the risk of replicating the current class-based structures of society.
• Ownership: the potential to empower and give power to many, not the few.
• Narrative: the need for fashion brands to tell meaningful stories within gaming playgrounds.

1. Digital fashion provides an opportunity to better physical fashion

Digital fashion has been heralded as the one-size-fits-all solution to the industry's sustainability issue. While this oversimplification overlooks digital fashion’s electrical waste, digital fashion can be used as a prototype for developing sustainable practices for our physical garments. Anne-Christine Polet, Founder & Head of HATCH & STITCH, defines digital fashion in two ways: digital for digital (like a skin in Fortnite) and digital for physical (using digitisation to produce physical fashion). For Polet, digital for physical is her favourite type of digital fashion, as she believes digital prototyping, sampling and selling “will help future-proof fashion.”

Digital for physical fashion enables the industry to better their supply and creation processes; beyond this, digital fashion may reduce the number of physical garments we need to buy. Take, for example, modular fashion—clothes that can change with your needs. In 2016 Angelea Luna created a coat that could be transformed into a tent to provide shelter for refugees. Today, in physical and digital fashion, designers should ask themselves, how can this garment evolve once it's been purchased? A purchase should no longer be perceived as the end goal but the start of the buyer's adaptive clothing. Like Nike & RTFKT’s virtual sneaker dubbed ‘MNLTH’ that comes complete with customisable ‘vials’, that will continue to be released long after the sneakers initial purchase.

The evolution of a garment can be digital or physical and can address utilitarian or self-expressive needs.

As Leanne Elliott Young, co-founder of The Institute of Digital Fashion, explains “the incorporation of interactivity and modularity allows for one garment to do more over time, as an example, creating augmented reality drops after purchase, generating longevity to one single piece of clothing.” To this end, LUKSO has enabled their NFTs to be more dynamic and updateable. This development, as Marjorie Hernandez from LUKSO explains, means: “garments could be updated throughout seasons of the year or to match [...] special moments owners would like to share with brands and designers more directly, making experiences with fashion even more personal.” Hernandez, like Young, predicts that “in the future, we will continue to see physical garments enhanced with AR features or have the ability to unlock VR experiences, offering multiverse utility.”

This phygital approach might even aid the uptake of digital fashion. For most people, physical and digital fashion are not yet considered equal, but for the creators operating in the space, it is. For Taskin Goec, of Maison Taskin, it’s hybridity that will lead to the mass adoption of digital fashion. What he calls “a physical object with a virtual aura” adds a level of tangibility to an otherwise ethereal industry; “For many people, digital and physical are not accepted as equally real. We need to have this transitional phase where people can connect it. [...] I don’t differentiate too much because I don’t think one is more real than the other. But I differentiate with design elements on what works better in physical and digital.“

→ Takeaway

To improve existing practices and reduce consumption, we can use digital fashion as a prototyping tool for our physical fashion, and a means to increase the wear of the physical pieces we already own.

That said, improving the sampling process is a tiny part of a broader theme of fashion’s true cost. Although a step in the right direction, this doesn’t solve fashion’s inherent sustainability issue or even begin to better the fashion industries’ other infamous wrongs like worker exploitation and animal cruelty.

To truly better the fashion industry, we shouldn’t just learn from and adopt digital fashion practices; we must consciously rectify, not replicate, past practices. Take, for example, one of digital fashion’s key benefits, as discussed with Erika Wang of shiu_studio: its speed to market. While this may enable creators like Wang to express themselves more freely, if this speed is abused, we could risk keeping ‘time’ as a key measure of success for artistic creation.

2. As our real and virtual lives converge we need to acknowledge how one impacts the other

Digital fashion isn’t a replacement of, but an addition to, physical fashion. As long as we have bodies, we’ll need clothes. As it's not a necessity, digital fashion isn’t limited by practicality. This more ‘free’ form of expression enables the ultimate self-experimentation. As DressX’s Daria Shapovalova explains:

Yet unlike analogue experimentation, your journey to self-actualisation is immortalised in your digital footprint. Vanessa Friedman, Fashion Director and Chief Fashion Critic at The New York Times, argues that too much discussion around digital fashion separates the real from the virtual, like our real and virtual selves are separate entities. When in fact both form part of the same person, just operating in different realms: you are your avatar. As Taskin Goec, of Maison Taskin explains: “the way I express myself online also affects how I see myself in physical life and how other people see me, therefore I want fashion to reflect what I’m doing.“

Friedman warns of the dangers of compartmentalising our different forms of identity: “juggling a multiplicity of selves and styles may feel less liberating than confusing and the line between freedom of self-expression and disguise hard to parse. What seems like dress-up now may have repercussions later. Besides, if blockchain is involved, it could follow you forever. [...] We’re conditioned to associate that world with Hollywood and fantasy, which makes it easy to think of the choices we make inside as inconsequential.”

Friedman isn’t alone in her concerns about what the blockchain is able to immortalise. Taking revenge porn as an example, Software Engineer, Molly White, explains how victims of revenge porn need to “reach out to individual platforms and petition them to hide the content [...] and even still, the content remains available on the chain to those who wish to look for it.”

→ Takeaway

Digital fashion enables ultimate experimentation of self, but we need to acknowledge and start educating ourselves that what we do online—self-expression or otherwise—doesn’t live in a vacuum. Our real and virtual selves are two sides of the same coin and we can’t expect our actions in one realm to be inconsequential in another.

3. Digital purchases will increase in line with the ability to display them

The goods we own form our identities. This identity formation isn’t limited to the physical: we can virtually collect goods (like the items you pin on Pinterest or the clothes you favourite on Depop), and this ‘temporary’ ownership facilitates identity discovery and projection. According to Mike Molesworth and Janice Denegri-Knott the array of digital virtual goods available blur the line between ownership, possession and access-based consumption.

In the metaverse, as in real life, what you own and have access to are important signalling devices. What you wear and your possessions may be the first (and perhaps only) indication of shared interests. Ian Rogers, Chief Experience Officer at Ledger, discusses the importance of being able to showcase your digital virtual goods, “if you don’t have a place to display these things then it doesn’t exist [...] you need the place for it to live, in the digital world, before it's really exciting to sell a virtual piece.” It’s perhaps not surprising then that we’re seeing the launch of new products and platforms that enable users to display their virtual goods, like RTKFT’s ‘Space Pods’, personal NFT Art Gallery—Spatial or Maison Dao’s VR wardrobes.

As the metaverse becomes more interoperable, the ability to display these goods centrally will effectively move your prized possessions from a safety deposit box to your mantle piece. Available for you and others to publicly enjoy.

For brands, these digital items can act as a new, more accessible entry point. Vanessa Friedman, Fashion Director and Chief Fashion Critic at The New York Times, explains that “metaverse dressing [is] the technological equivalent of a lipstick: an entry-level product that can hook future consumers.” But as with all material goods, especially if they are centrally hosted and displayed, there’s a risk of perpetuating classism. The video game, Fortnite, for example, has segregated players based on their virtual possessions. Although it’s a free-to-play game, the skins (outfits the players wear) available to buy are becoming a signal of status. Those unable to pay to upgrade their looks are labelled as ‘the defaults’, a lesser, lower class of gamers that are targets of bullying. Taskin discussed how digital fashion could signal your identity to “belong to a certain tribe of people, a community.”

There’s a danger of virtual goods creating ingroups and outgroups—enabling users to find their people and ostracise others.

→ Takeaway

Digital fashion and virtual goods enable a new form of ownership and a more accessible way to collect. The ability to display these goods centrally is likely to increase their perceived and monetary value but risks perpetuating the existing class systems.

4. The New Creative Economy is community-owned

With the rise of the Web3 mindset, the internet's infrastructure is changing the relationships between individual Creators and their audiences—fueling a Creator-to-Fan network, bypassing traditional gatekeepers.

Emerging technologies aim to give the power back to the creators; and platforms like Patreon, Twitch and Discord are allowing digital assets to be owned autonomously and monetised without a middleman. With the introduction and adoption of NFTs, this means fashion pieces can be owned, worn, displayed and sold across different platforms (granted interoperability comes with its own set of challenges). This has created a market for independent digital fashion designers to monetise their work on their own.

One of the challenges of the Creator Economy, however, is still the poor distribution of wealth. As Ji Lin from Harvard Business Review writes, “right now, the Creative Economy on platforms like YouTube and Instagram looks a lot like the U.S. economy—there are a few big winners and a lot of people hustling to make a living and barely getting by.”

As Web3 gains traction, there’s the potential to move from an individualistic Creator Economy that only benefits the few to a more collectivist, equal Creator Economy. As Co-Founder of Metalabel.xyz and Kickstarter explains today: “Creators are turned off by endless competition, vacuous content production, and spending more time pleasing algorithms than their actual creative process.”

But now, thanks to Web3, new structures for creativity (built around collectives and new versions of the label model) are emerging: creating an era of “creativity in multiplayer mode.” This is something that Erika Wang, of Shui_Studio, is already trying to emulate. For her, when creating digital fashion pieces “the most important thing is to build and expand your community” so that more people can be involved and a part of her work.

The New Creative Economy will be defined by community and co-creation. Digital fashion house, The Fabricant, for example, launched The Fabricant Studio, a platform where anyone, anywhere, can become a digital fashion creator. And community-led platform FuturesFactory allows creators and small brands to sell virtual sneakers as NFTs and use the sale of the virtual goods to gauge demand and finance physical production. This more collectivist approach is praised by independent creators like Taskin Goec: “the digital fashion community is really welcoming and warm. Most of us are self taught, and the community is really helpful. It’s so different from traditional fashion […] There is no elbowing to the top.”

While Web3 might give more control to creators by enabling them to own their work outright and provide direct contact with their audience, the struggle for exposure remains. To succeed as a digital fashion designer, you need to be seen by the many, not the few. Accordingly to Erika Wang, this sometimes means putting your creations on platforms that aren’t financially viable: “I recently put out my designs on a platform to showcase my work, but the way they work with designers is not really beneficial for us […] because the percentage between the two parties is not so even. The reason why I collaborated with them is that I wanted more promotion, and it’s nice to have more exposure, I just view it as an investment.’’

→ Takeaway

Web3 holds the potential to welcome a new era of the Creator Economy, where creators and fans unite to create a more egalitarian, socialist form of capitalism. While this helps solve decades of creator ownership issues, the battle for attention remains. And as such, some creators are forced to use eCommerce and brand collaborations to gain exposure over financial returns. This challenge for creators poses an opportunity for eCommerce platforms and traditional retailers: by fulfilling this need, they’ll become creator enablers and, potentially, leaders.

5. Bringing fashion to the gaming playground risks commodifying play

Live-streaming turned a solitary leisure activity into a new media channel. This media-tisation (and monetisation) has legitimised gaming and digital fashion. No longer niche, gaming is a form of entertainment that made more money than sports and film combined ($180bn) in 2020, and fashion houses want in. In recent years we’ve seen Louis Vuitton cast Final Fantasy characters as models, Off-White and Prada pieces in Animal Crossing and Balenciaga make their own game that doubled as a catwalk for their FW21 collection.

The latest gaming format is NFT games (where players can buy digital collectables and interact with other NFTs within an existing game) and brands like Gucci, Burberry and Nike’s RTFKT are among the first to use them, issuing NFTs as pieces of clothing for virtual worlds and collaborating with game studios like Mythical Games. NFT Games make claiming an NFT part of an immersive experience and has become a new distribution channel for brands. Such collaborations are essentially an exercise in community cross-pollination. Take the RTFKT and Sandbox collaboration as an example: Sandbox gains a new customer when RTFKT fans try the game, and RTFKT gains access to existing Sandbox players.

The avatar customisation of NFT games enables access to high-quality assets (otherwise out of reach) that can heighten self-expression and enhance the game’s world and in-game rewards. Yet there are instances when this commodification of play can prove problematic. Like when a branded experience doesn’t enhance or reinforce a game's storyline, acting as a glorified alternative asset. Or how this format facilitates native advertising in a space deemed safe enough to escape and explore different parts of identity expression. And, in an industry linked with harassment, assault and bullying, the addition of real-life elements such as trends and capital can only compound existing socioeconomic classes, and create new social norms.

→ Takeaway

Fashion brands have the potential to enrich gaming experiences, but when not in line with a game’s storyline or philosophy, this can be deemed disingenuous or commercial. There is a risk that games become, as Wendy Liu describes the metaverse “virtual reality with unskippable ads.”

To protect, not compromise, the gaming experience, fashion brands need to add value to gameplay: aiming to create meaningful experiences people want to be a part of and not just a new distribution channel.

TL;DR

In this instalment of State of Digital Fashion, we uncovered five key themes:

• Sustainability: To truly better the fashion industry, we shouldn't just learn from and adopt digital fashion practices: we must consciously rectify, not replicate, past practices.
• Self-expression: We need to acknowledge and start educating ourselves that what we do online—self-expression or otherwise—doesn't live in a vacuum; we can't expect our expectations in one realm to be inconsequential in another.
• Status: Digital fashion and virtual goods enable a new form of ownership and a more accessible way to collect. The ability to display these goods centrally is likely to increase their perceived and monetary value but risks perpetuating the existing class systems.
• Ownership: Web3 holds the potential to welcome a new era of the Creator Economy. Yet, the battle for attention remains: eCommerce platforms and traditional retailers need to better balance storytelling and selling to deliver both exposure and a financially viable revenue stream to Creators.
• Narrative: To protect, not compromise, the gaming experience, fashion brands need to add value to gameplay: aiming to create meaningful experiences people want to be a part of and not just a new distribution channel.

It’s still early, and as digital fashion becomes increasingly entangled with our day to day lives, it will continue to adapt and develop. These themes outline the opportunities, potential limitations, and considerations of digital fashion’s immediate future.

Authors:

• Sara Keegan, Sr Strategist
• Gabrielle Carlson, Strategist