An inquiry into the at-times bitter rivalry between luxury fashion and the metaverse.
Digital fashion is expanding as an art and an industry into the Metaverse.
To walk down the street is to wade through a sea of people, just like you, chatting on the phone, listening to music, checking recent social media posts. It’s a world where the digital flirts with the physical, and the relationship continues to bloom with each new technology and idea that’s introduced. We’ve become so collectively entwined in this love story, in fact, that murmurs of a purely digital plane of existence have grown into full-throated reality: The Metaverse.
Virtual luxury, real fashion
The Metaverse invites technology to mimic human behavior and interactions to create a novel virtual dimension, and it’s already created quite a buzz. The luxury fashion industry in particular has its ears perked to this new portal, with brands like Gucci already creating virtual experiences and products for its loyal customers.
Its overnight success isn’t surprising -- the Metaverse offers an affirmed reality to luxury, where the paradoxical human desire to belong and to stand out work together in harmony.
And I don’t use “overnight” lightly -- within the last year, the Metaverse has drawn the attention of not just Gucci, but a growing list of other luxury brands who are intrigued by the idea of digital objects and experiences.
The ploy is a clever one: the crossover of luxury and the Metaverse is simultaneously a vehicle of democratization and disequilibration. In theory, anyone can participate. Consumers can now purchase a virtual Balenciaga hoodie, Karl Lagerfeld figurine, or Rolex timepiece. Their digital condition feels familiar -- we are all comfortable in online spaces, so we have the impression that these items are open to anyone who wants one.
Ad campaign for virtual Gucci Garden Archetypes in Florence, Italy, May 2021
Exclusivity to define luxury and the Metaverse -- for now
But if we look closer, the appeal of non-fungible tokens, or NFTs, is their scarcity. That’s what runs the Metaverse Show. The defining characteristic of an NFT is that it is non-fungible, that it is one-of-a-kind, possessed by you and you only. To purchase a virtual Gucci sneaker is to show the world that you’ve gone beyond physical superiority and onto the digital.
Coco Chanel described luxury as “the necessity where necessity ends.” Luxury has historically been defined by its notion of exclusivity. It must be desired by many but consumed by few. For a brand to retain its reputation of luxury, it must lean into the strange balance of diffuse brand awareness and unattainability.
When whispers of the Metaverse first tickled the ears of luxury brands, for most there was no convincing necessary. The two depend upon perceived value and exclusivity to thrive.
The MetaBirkin, luxury's first run-in with the Metaverse
Let’s take the case of the Hermès MetaBirkin. In December of last year, digital artist Mason Rothschild released 100 virtual Birkin bags on Opensea, a popular NFT platform. The digital bags appeared in a range of offbeat iterations, from fuzzy cow print, to electric blue, to Grinch green. Some even featured Van Gogh’s Starry Night or Hokusai’s Great Wave. The highest sale (in Ethereum, a major cryptocurrency) rang in at nearly $50,000 USD. The lowest price for a Birkin bag sits at about $8,000 USD.
Mason Rothschild's collection of MetaBirkins on Opensea, released in December 2021
Rothschild’s concept worked. The MetaBirkin magnetized luxury consumers and art collectors to it, despite its high price and the fact that, well, it can’t actually be used. But this isn’t what drew Hermès to the scene. Just this week, the luxury house hit Rothschild with a hefty lawsuit for trademark infringement.
My question here is: Shouldn’t Hermès, the same brand who sets their own bags on fire, be on board with this? Yes, Hermès keeps its products out of the mainstream gray market by destroying merchandise each season. This isn’t dissimilar to Rothschild keeping his NFT Birkins down to only 100 iterations in the entire collection.
In this way, both Hermès and Rothschild are serving the brand’s luxury reputation. They’re keeping it scarce, exclusive, desirable.
The parallel feels dystopian, likely because it’s a battle between the virtual and the physical. Like with Birkin bags, NFT’s value exists largely because we’ve simply all agreed to give them value. Of course, there are quantifiable elements to the Birkin: the leather, the design, the craftsmanship. But the same can be argued for the MetaBirkin: the software, the design, the artistry. No bag is ever really worth $50,000; no matter if it’s real or not.
This is the nexus of luxury. There’s an undeniable positive correlation between rarity and perceived value.
Luxury and the Metaverse, or Bonnie and Clyde?
Looking forward, Morgan Stanley predicts that luxury-branded NFTs could reach a market value of $56 million USD by 2030. The crossover between luxury brands and the Metaverse is merely an actualization of luxury’s ever-evolving bid to remain luxury. Sure, the Metaverse has some luxury brands itching with anxiety, but only because it’s a new and unfamiliar exclusivity strategy. Chanel, for instance, hasn’t entered the Metaverse, but what they have done is raise the price of their 2.55 bag to $9,500 from $7,400 in just 6 months. Price hikes, NFTs, potato, potahto. Luxury brands are constantly redefining exclusivity, and the Metaverse is their new playground.
Great job, Melanie! I personally didn't know much about NFTs and that luxury was already aiming at this market so it is quite interesting to learn about this new development. Thanks for writing and posting this article!