Metaverse Fashion Week was a bust this year, but fashion brands are still embracing the metaverse

But unlike last year, when the event drew in over 100,000 unique visitors, this year only brought in 26,000 unique active users, according to data that Decentraland provided to MarketWatch. Despite the low turn out and the broader layoffs in metaverse divisions at massive companies like Disney
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+0.06%
and Meta
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+2.18%,
fashion companies are still embracing the so-called metaverse.

For example, this month, Gucci, which operates under French conglomerate Kering
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announced partnering with Yuga Labs, the company behind the popular non-fungible token collection Bored Ape Yacht Club, which features 10,000 cartoon apes that drew a lot of hype and criticism in 2022. Yuga Labs and Gucci are working together to release a limited-edition series of physical Gucci products that are associated to non-fungible tokens tied to Yuga Labs’ long-awaited ape-themed metaverse game called Otherside. Gucci also has an entire team dedicated to metaverse initiatives.

Similarly, Meta, which recently laid off 10,000 employees, has partnerships with digital fashion houses like DressX to sell virtual clothes for the avatars that Instagram and Facebook have been pushing to users.

The main reason fashion companies haven’t backed away from the metaverse when other companies have is because they’re making money in it, and there is the opportunity to tap into a younger audience which is increasingly spending their time in gaming over other forms of entertainment.

“The [Otherside] platform registered an impressive $222 million in trading volume in Q1, a remarkable 237.34% increase from the previous quarter,” said DappRadar’s blockchain analyst Sara Gherghelas.

“Yuga Labs has also been dominating the NFT fashion industry. In Q1 of 2023, the NFT trading volume for fashion collections amounted to $15,314,672 […] With this new partnership with Gucci, Yuga Labs is set to take its dominance in the NFT fashion industry to new heights.”

During the Metaverse Fashion Week on Decentraland, users spent around $26,000 buying wearable skins from fashion companies, and claimed around 76,000 free wearables which are virtual items you can dress your avatar in.

These numbers aren’t significant when compared to the billions that these fashion brands bring in every year, but still indicative of the potential that virtual worlds hold for tapping into younger audiences.

“Tommy Hilfiger shared that they had four times the retention in their activation compared to last year’s MVFW,” said Gigi Graziosi Casimiro, head of the Metaverse Fashion Week, in an email. “Although attendee numbers were down, we had tens of thousands of new visitors to the metaverse. For the second ever Metaverse Fashion Week, we believe that we improved upon the experience from last year, and are still in the early days of metaversal fashion.”

One of the main reasons metaverse fashion sells so well is because around half of Gen Z users surveyed by gaming platform Roblox said that dressing up their avatars on virtual platforms allows them to express their individuality and feel good about themselves, according to Roblox’s latest Metaverse Fashion Report.

With the gaming industry fast growing, and exceeding $300 billion in value, the digital fashion houses moving into this space aren’t going away anytime soon. Those working to create metaverse fashion designs think the recent slowdown in enthusiasm for the metaverse is temporary.

“When I got my first job at Accenture in the late ’90s, we were building websites for every company…and then we had the huge bubble burst in 2001 and it really took down the market,” said Katherine Manuel, chief operating officer at House of Blueberry, a fashion brand that makes clothes for platforms like Second Life, Roblox, and The Sims. “And what was interesting is that back then there was also this idea of…is the internet dead? Does this mean no one can have e-commerce that’s profitable? I think [what we see with the metaverse] is just a natural correction.”