GDI: Let’s start with the basics: Why would I buy something I can’t touch, can hardly use, and of which the value is not backed by anything?
Richard Hobbs: I think this is the first misconception and where, therefore, the gut reaction starts. A digital asset can have as much value, if not more, than a physical product.
There are a number of ways to ascertain value. As this is a retail focused event (72nd International Retail Summit), I guess we all know that the retail price of an item is somewhere between 2 and 20 times what it costs to actually produce. There are a bunch of factors that determine the eventual price. Not least the margins that the retailer and brand put on to create the value in terms of desirability via marketing and promotion as well as perceived scarcity. The consumer will pay a higher price if they see the value in purchasing that item based on its utility, desirability and cultural significance. ie, does it give them social clout on top of a "normal" owner relationship.
A digital asset secured as a token can give all of that and more. Many people still think of an NFT as a jpg that can be right-clicked and diminished. What people have to look at is beyond an image but consider web3 as a whole. Your ownership of a token means you have the means and opportunity to fully engage with web3 (as long as you are working with the right people!) allowing you to be a part of a community (and wider communities) where you own your digital assets, including your data. This ownership can enable the basics of property but can also encompass fractal or shared ownership, rental models, and multiple versions of play-to-earn tokenomics. All of which are relevant to fashion in the metaverse.
What sums are we talking about when speaking about the evaluation of the NFT fashion market?
These are such early days in the evolution of digital fashion that any numbers are speculative. We are just scraping the surface but the evolution will be dramatic. The worldwide textile and apparel industry is anywhere between 1.5 and 2.5tn USD, depending on the source of information. Which is frankly preposterous when it is apparent to all of the damage that fast fashion, in particular, causes to the earth's resources. If digital fashion can contribute to reducing that then that will be fantastic.
The search volume for “NFT” on Google has been declining since the beginning of this year. What does this tell us?
I prefer not to use the term myself. It's been so tied up with hype and negative reporting over the last 18 months that is distracts from the positive aspects of tokenisation of digital assets and the evolution of web3 and how that creates incredible opportunities for individuals as consumers and creators, and the brands that truly embrace the ethos of this new sphere of commercial activity. It also means that the chancers and hucksters are leaving the marketplace and the best operators will be leading the space!
Which fashion trends are currently leading in the metaverse, and who is setting them?
The appeal and beauty of digital fashion is that it does not have to deal with the same restrictions as IRL. Physics, gravity, materials, structures, landscapes, are all open to truly creative minds to experiment with and build amazing experiences and products. That is where I see the leadership in design coming from, visionary 3d designers who can exploit the potential of the software tools now available for 3d product creation, animation and real time rendering. In the meantime, there are brands that are making steps to engage in web3 through the core elements of community building, placing stakes in the metaverse, and collaboration. Adidas have made some solid moves.
Will we see new fashion brands created for the metaverse?
Absolutely. Since we started working on Brand New Vision, in early 2019, as a platform where fashion brands work with us to create 3d products, tokenise, launch, run a marketplace, and build out wearability for the metaverse, I have said that the most successful, and profitable, brands will be those that embrace it fully or are truly digitally native.
Richard Hobbs will be a speaker at the 72nd International Retail Summit which takes place from 8 - 9 September 2022 at the Gottlieb Duttweiler Institute. Sign up now!