GamFi is a Serious Business for Phygital Fasion in the Metaverse #NFT
The metamorphosis of NFT has seen fascinating developments across industries. One intriguing phenomenon in the fashion industry is the gamification of digital fashion, otherwise known as ‘metafashion’, or technically as ‘phygital fashion’. However, the idea of gaming is not novel to the fashion world. The popularity of NFT has re-ignited the interest in digital fashion among Gen Z, and now the industry of glamor has decided to leverage on the dynamism of the gaming world. Fashion brands are partnering with gaming platforms to build up games embellished with NFT fashion in virtual lands. The rising need of one’s virtual persona, or dressing up a virtual avatar, has led to a significant growth of microtransactions for phygital apparel that no fashion brand can afford to ignore. Phygital fashion is the new black.
How to curate and deliver an exclusive, customizable, and authentic brand experience in a virtual world that also bridges with the traditional physical one — that is the challenge NFT poses to the fashion industry.
Phygital Fashion via AR & VR Try-On
Clothing is an expression of a personality, both in the physical world and in the virtual one. Hence, ‘phygital fashion’ can be understood as fashion that is physical as well as digital. ‘Phygital’, in the luxury sector, generally refers to the streamlining of online and offline touchpoints. Three elements need to work together to achieve such a streamline:
1. Immersion: Consumers need to feel they are part of the experience.
2. Immediacy: Consumers need to get the right message at the right time to achieve order fulfillment.
3. Interaction: Consumers’ engagement with the brand are usually through sensorial experiences.
The objective of combining the online and offline experiences is to create a seamless brand experience for consumers. The more the touchpoints there are with consumers, the stronger their emotional engagement with brands become.
‘Phygital’ has been realized in the fashion industry through the technologies of artificial intelligence (AI) and augmented reality (AR). Virtual try-on can be fitted with camera filters in apps. Tiffany & Co.’s app puts engagement rings on its filters, users can even choose the skin tone of the hand. Product customization is also available. Dior offers virtual try-on of its different styles of B27 sneakers and the option to e-buy on Snapchat. Gucci has also partnered with Snapchat for a virtual fitting and purchase of its Ace Sneakers. Snapchat claimed more than 180 million of their users engage with AR on a daily basis. AR and VR can also uplift an in-store costumer’s shopping experience. In-store costumers can try on digitally without the need of queuing up and changing in the fitting room. Virtual try-on is working for cosmetic brands as well.
Blurring the lines between digital and physical, fashion brands make seamless customers’ shopping experience and enhance their product satisfaction through virtual try-on before purchase. By the same token, the data of consumers’ behavior patterns collected through the app can be studied to avoid over-production of unpopular items and consumers get the opportunity to rethink if they really want to make a purchase. By including consumers to the production process, a more sustainable fashion ecosystem can be realized.
In-game NFT Fashion
It is no coincidence the fashion world merges with the gaming world. Games offer virtual spaces to create immersive experiences in a luxury-themed environment. Gamers are readily a digital-captive audience who recognize the tradability and sell-on value of NFTs. Given consumers spend more time online, it is organic their interests in collecting digital assets grow. The global video gaming industry has reported a market value of $178 billion in 2020 and is estimated to be worth US$219 billion by 2024.
Creative branding strategies inhabiting the gaming formats are in need to capture the digital-native Gen Z players, to turn gamers who do not usually buy luxury goods into fashion aficionados, and to swirl traditional brand fans into the metaverse of NFT fashion.
In partnering up with established game platforms, fashion brands aim at creating premium gaming experiences to foster emotional bonding with game users. Gucci has been very active in digitalizing its brand experience. Starting with Gucci Ace, the game is about the founder’s journey and players are tasked to collect badges along the way. Gucci Bee is a typical maze game, featuring the brand’s iconic retro patterns. In Gucci Arcade, partnering with Tennis Splash, tennis players are dressed in Gucci sports apparel in the tennis courts that are reminiscent of the Olympian grandeur adorned with Gucci décor. On Roblox, Gucci Garden tailors unique experience per user. The user’s avatar is a neutral mannequin that transforms to the patterns of nature themed in each virtual room. In-game purchase is also available for these personalized avatars.
Louis Vuitton launched ‘Louis the Game’ on the occasion of its 200th anniversary. Like Gucci Ace, the immersive LV game is to follow Vivienne, the game avatar, to embark on its founder’s journey and to collect monogram candles that contain the brand’s anecdotes. To match the winter spirit, Ralph Lauren puts on ‘Winter Escape’ with Roblox to feature winter sports apparel and ski accessories. Off-White has collaborated with a graffiti artist Katsu to launch the game ‘Offkat’. The avatars in the game wear the collection designed by the artist, and the plot is to escape from the police for having painted graffiti in the virtual city.
NFT fashion has proven to be a significant new revenue stream for fashion brands. Gaming platforms are lucrative marketplaces. Fashion brands are trying to blend in the gaming world by bringing what they do best: exclusive luxury products in limited editions, adapted as in-game NFT fashion collectibles.
Virtual Avatars as the Digital Native Gen Z’s Virtual Personas
Consumers become immersed in virtual games by selecting characters to represent themselves. ‘Avatars’ are our digital selves in the metaverse. ‘Avatar skins’ are digital outfits and accessories worn by the in-game characters. The consumer spending on avatar skins alone is estimated to be worth US$50 billion by the end of 2022. Since digital fashion is a format native to the spaces the video game players inhabit, brands are determined to make the most use of an efficient digital touch-point to interact with the younger consumers and forge a sharable brand experience within their communities.
Burberry is one of the fashion maisons to dress game avatars. ‘Honor of Kings’ is a popular mobile game in China. Burberry designed two skins featuring its check lining and trench for the heroine Yao from its spring/summer 2021 collection. On Blankos Block Party, Burberry adorns the Blanko avatar Sharky B with its TB monogram outfit. This skin can be purchased and even upgraded on the Blankos marketplace to dress another Blanko the player owns. ‘Louis the Game’ (as mentioned above) had chosen the brand’s mascot Vivienne as its avatar. Players can choose her skin from a variety of LV prints.
Fashion brands are getting increasingly creative on their use of avatars. Coach has picked animal characters as its avatars in ‘Snow City’ to celebrate the brand’s 80th anniversary. Coach was gifting away some of its NFT drops, which can also be used as a token to redeem a complimentary physical handbag in 2022. Balenciaga used ‘Afterworld: Age of Tomorrow’ as its virtual runway, spotlighting 50 avatar models dressed in digital fashion that were based on its physical fall/winter 2021 collection. The avatar of Gucci’s creative director Alessandro Michele was ‘invited’ to present the Metaverse Design Award at the British Fashion Council’s Fashion Awards virtual ceremony.
Against the backdrop of the pandemic, consumers are continuously redefining their community spaces and exploring the online platforms. Brands are eager to connect with the gaming communities and forge lasting engagement even digitally. Digital fashion poses an opportunity for brands to show off its digital creativity and NFT innovation. The virtual fashion runway is a natural extension of the physical one.
Future of Fashion
While fashion brands have recognized the importance of NFT fashion, they are embracing gamification as a business development strategy in various approaches. Phygital elements via AR and VR technologies have created seamless touchpoints to strengthen consumers’ emotional engagement with brands. Digital fashion and NFT limited editions can add value to the overall brand experience. Virtual avatars show users how they can look online and act as brand ambassadors.
The value of luxury brands lies in their value over time. Customization is key to a brand’s long-term success, no matter fashion is in its physical or digital form. The challenges brought about by NFT the fashion industry is facing can be summarized as: how to curate and deliver an exclusive, customizable, and authentic brand experience in a virtual world that also bridges with the traditional physical one. Co-creating partnerships with gaming communities, NFT marketplaces, fashion designers, and 3D designers, with data input and preferences from consumers in the production process; may actually materialize a more sustainable fashion ecosystem. The growth of digital fashion signifies fashion is not defined merely by price, wearability, or materials anymore.
This article is first published in the fifth issue of Global Fashion Lawyer, International Law Section, Beverly Hills Bar Association. https://bhba.online/globalfashionlawyer-issue5/
 Alexis Damen, Phygital Retail: What is It and What are the Benefits?, Shopify (Aug. 2, 2021)
 Dior Launches AR Lens with Snapchat, BrainStation (Nov. 5, 2020)
 Damen, supra note 1.
 NFT, gamification, and the luxury fashion industry, akaChain (Aug. 23, 2021)
 Maghan McDowell, Why games became luxury fashion’s NFT on-ramp, Vogue Business (Aug. 10, 2021)
 See Global Trends among Generation Z, Global Web Index (June 2019), https://www.gwi.com/reports/global-trends-among-gen-z (Gen Z spent an average of 8 hours per day on screens in 2020).
 See Exhibit 9: Metaverse Mindset, The State of Fashion 2022, McKinsey & Co. (Dec. 1, 2021) https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion.
 Gucci Reinventing itself in the Digital Age, VSLB (Oct. 25, 2021)
 Robert Williams, ‘Gucci: Testing Luxury’s Opportunities in the Metaverse’, The State of Fashion 2022, McKinsey & Co. (Dec. 1, 2021) https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion.
 Alexis McDonell, Danielle Healy, and James Glasscock, Ready Player Fashion: The Intersection of Video Gaming, a Pandemic, and a 2030 Sustainable Fashion Transformation, Good Human (Feb. 23, 2021)
 ‘5. Metaverse Mindset’, The State of Fashion 2022, McKinsey & Co. (Dec. 1, 2021) https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion.