The fashion industry was one of the first industries to enthusiastically explore the opportunities afforded by the metaverse and NFTs (non-fungible tokens). However, the technological limitations, the lack of interest among the adult audience and the economic downturn have led the initial euphoria to peter out. Nonetheless, brands have evolved and now adopt a more pragmatic approach, seeking to improve the client experience and linking NFTs to the traceability of the items of clothing.
When tech giants turned to virtual worlds in 2021, haute couture designers did not hesitate to design digital clothing for avatars and open stores on these platforms. Other firms in the industry were soon to follow. There was such interest in these new technologies that the term “metaverse” became a top trend in the textile industry that year and one year later Vogue magazine dubbed 2022 as “the year of fashion NFTs”.
The metaverse and NFT craze gave rise to initiatives such as the fashion district on the Decentraland platform, the first metaverse fashion show (which drew over 100,000 guests) and the launch of thousands of collections of NFT apparel, some of which generated millions in revenue. The experts predicted that the future of fashion lay in the metaverse, and claimed that its large-scale adoption was an imminent reality.
Fashion firms found that the metaverse enabled them to improve their positioning and offer innovative experiences. NFTs in turn played a key role in digital fashion, making it possible to certify the authenticity and ownership of virtual apparel. Their scarcity and exclusivity made them attractive assets for collectors, especially in the luxury fashion industry. Some of the first NFT collections reached astronomical figures, which led to the belief that these assets would represent a new business model for the industry.
However, over time, this initial euphoria has petered out. Since 2023, references to fashion in the metaverse are practically non-existent and events such as the Metaverse Fashion Week held in November 2024, have largely gone unnoticed. The return to normal life post-Covid, the limits that technology currently faces in creating immersive environments, the little interest shown by the adult audience, the economic downturn and the surge in AI are some of the reasons that have led to the decline of the metaverse as a priority for fashion brands. NFTs as collectible assets have also lost a great deal of their appeal. The burst of the speculative bubble in 2022 and the skepticism towards cryptocurrencies over the last few years have meant that most of those tokens have now lost their value.
This lack of interest is reflected in the drastic reduction in investment by large companies, some of which have closed departments that were dedicated to the development of the metaverse and NFTs. According to the Veepee-Modaes Barometer, in 2023 in Spain, only 2% of fashion brands considered the metaverse a long-term trend, whereas the year before, 20% had considered it a key trend in the medium term.
However, this does not mean that the fashion industry has completed abandoned the metaverse or NFTs today, but rather that strategies have evolved towards a more subtle and pragmatic approach. Instead of focusing on purely virtual experiences, brands have chosen to merge the physical and digital, offering products and services with a tangible link to reality. For example, Nike and Adidas display their products in stores in the metaverse and customers subsequently receive them physically.
Textile companies have also successfully reinvented NFTs, which have gone from being mere collectible items to functional tools within the industry. These digital tools now go hand in hand with exclusive benefits, such as access to private events, limited editions or personalized sales, similar to a loyalty program, which creates a sense of belonging to the brand. Using this strategy, Dolce&Gabanna, for example, offered the buyers of one of its most emblematic NFT collections a private tour of its Milan atelier.
However, today, the fashion industry mainly uses NFTs to track the origin and verify the authenticity of its clothing. Thanks to their transparency and immutability, NFTs protect both designers and consumers from fakes. Indeed, Dior and Puma have embedded NFC chips in some of their sneakers linked to an NFT, which certify their authenticity and offer details about the manufacturing process. This technology is also particularly relevant in the vintage or second-hand clothing markets. NFTs also make it possible to monitor supply chains to demonstrate the company’s compliance with certain commitments and values, particularly regarding environmental sustainability and respect for human rights. The LVMH, Prada and Cartier (Richemont) consortium are pioneers in providing this service, creating the Aura blockchain platform which offers digital passports to offer traceability and transparency to their products. Based on this idea, the Digital Product Passport proposed by the EU seeks to revolutionize the industry with a digital system that tracks a product’s lifecycle, from the manufacturing process through to recycling, encouraging sustainability. Although the technology on which it will be based has still not been defined, NFTs may be crucial to its development.
In short, blockchain technology and NFTs continue to have their place in the fashion world, and public interest in the metaverse may well return once technology offers more accessible and immersive experiences. Although the initial enthusiasm has given way to a more cautious, hands-on approach, fashion continues to explore new ways of including these technologies in its business model in order to offer customers useful and rewarding experiences.
Claudia Posse
