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April 14, 2023

What is the Future of Digital Fashion in Web3?

With the fashion industry increasingly embracing the phygital, leading designers share their predictions with Ashumi Sanghvi
Credit: H&M and Institute of Digital Fashion, Cyberwaves (detail), 2022. Courtesy of Institute of Digital Fashion
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What is the Future of Digital Fashion in Web3?

Ashumi Sanghvi: How far is digital fashion reiterating legacy practices from the fashion industry and where do you see genuine innovation right now? Is phygital fashion the future?

Dani Loftus for DRAUP: Traditional fashion brands and luxury groups tend to rely on exclusivity in order to capture a colossal proportion of market share, thereby earning the title of “super winners.” New designers trying to break in are therefore faced with Goliaths who have achieved dominance in terms of economies of scale and through close relationships with the fashion press that ensure walls around media distribution. Likewise, only a small number of brand fans possess the wealth and connections to wear a high end brand’s designs.

Digital fashion holds the potential to subvert these elements, thereby creating an industry which is democratized for both creators and consumers.

It also allows young designers to create clothes at little more than the cost of a computer, while technologies like augmented reality (AR) and virtual rendering expand who can wear what. Designers can now bypass the approval of the fashion illuminati, relying instead on the algorithmic assistance of social media. Due to the hypothetically infinite scalability of digital clothing, price tags can also be lowered while clothes can be shipped anywhere, which allows a wider body of consumers to engage with the formerly gated world of high fashion. 

DRAUP x Nicolas Sassoon, Headpiece (preview output), 2023. Courtesy of DRAUP

A number of traditional market leaders, including Chanel, Dior, and Balenciaga, have developed collections of “skins” for Fortnite and Roblox — played by 75% of 9 to 12 year olds in the US — while others such as Gucci and Tommy Hilfiger have set up full-time shops in in-game worlds. Others are establishing pop-ups as a marketing ploy to gain attention from gamers for their physical clothes and then getting out. For these high-end brands, mind-space means market share because young buyers will eventually consume more expensive physicals when they do possess the purchasing power.

In my eyes, phygital fashion ends up constricting what digital fashion can be. Not only does it devalue the digital object as a stand-alone store of value — almost apologizing for its lack of tangibility — but it limits digital fashion to the constraints of its physical counterpart, which makes it wildly less exciting. 

Marco Marchesi for The Fabricant: When I joined The Fabricant in 2021, my naive ambition was to use game engines and different programming languages to generate fashion through code. I was surprised to find that, across the many digital fashion houses, designers were largely using software tools conceived for the traditional fashion industry. This was partly inherent in pre-existing fashion education, whereby students would learn to design physical fashion first, following the rules of garments and fabrics, and subsequently switching into the digital world. However, the constraints of different digital platforms also created serious challenges for creatives who sought to make fashion for the metaverse. I’m pleased to see that visual quality is now increasing significantly, while newly interoperable solutions and AI are creating new opportunities to innovate.

On phygital fashion, it seems obvious to me that brands will remain anchored in the physical world, continuing their legacies with their traditional audiences while attracting younger generations through digital wearables designed for Roblox, Fortnite, etc. However, natively Web3 fashion brands like 9dcc are also accepting phygital as the right solution, connecting the metaverse and IRL events through fashion.

The Fabricant x CAT Footwaer, 2023. Courtesy of The Fabricant

Leanne Elliott Young for Institute of Digital Fashion: We birthed the Institute of Digital Fashion as an emblem for change, trying to move away from some of the more harmful and draining practices that have become entrenched in the physical fashion industry. Rather than succumbing to the relentless fashion-week calendar, which expects designers to churn out material to the detriment of themselves and the environment, we are pushing for people and the planet to come first through flexible timelines that encourage freedom of creativity and a reduction of waste generated throughout the production cycle. 

We believe that IRL and URL work in unison, so we are building a platform that showcases fashion’s multidimensional futures, allowing artists and creatives to build a buoyant ecosystem to buy, wear, sell, and share digital fashion. 

Gala Marija Vrbanic for Tribute Brand: What is good is that the genuine creators who are developing in this space are the ones who were fed up with the traditional fashion system. Therefore, they are all attempting to create something that is the opposite of what has gone wrong. As we all know, there are many problems with the legacy fashion system. However, I believe that major innovation is still missing. 

We are still largely replicating the IRL within the virtual realm. What worked IRL worked because it was adapted for IRL experiences. Now, it is up to us to create new experiences within a new medium. Right now, phygital is a fantastic bridge between the physical and virtual worlds, and it is what most customers are ready for at this moment. But how are we all going to look if we no longer need our bodies?

Ziqi Xing for XTENDED iDENTiTY: Digital fashion opens up more possibilities for the fashion industry by bringing in applications such as AR, XR, virtual try-on, and NFTs. Phygital fashion is highly likely to become an important part of the fashion industry in the future, as it offers new ways to integrate physical and digital experiences. But physical fashion is a must when it comes to mass adoption, since consumers have to see an item in real life. On the other hand, consumers today are not satisfied with owning purely physical fashion items. This is especially true of the younger generation, who are always seeking new ways to express themselves with digital tools. That is where phygital fashion comes in, combining physical products with matching AR filters to offer an interactive XR experience.

XTENDED iDENTiTY, Phygital Collection, 2023. Courtesy of XTENDED iDENTiTY

AS: What aesthetic possibilities does the metaverse allow digital fashion designers and how can brands take advantage of Web3?

IoDF: Zero gravity, impossible fabrics, solid silks, flexible metals, and endless exploration with zero waste. In the metaverse, we can go far beyond the physical possibilities of materials in the way we shape and fit them to bodies. There’s also a wide range of possible materials: from the “breathing” algae that we used to create our Metaverse Innovation Design Story with H&M to the liquid metal we’ve been seeing all over Instagram —the metaverse is your oyster. The aesthetic possibilities don’t simply extend to the garments themselves but also to advertising, marketing, and branding. In the metaverse, you can create a whole world around your products, while encouraging interaction and gamifying the product experience to give consumers something to be part of, not only something to look at. 

TF: It’s still quite challenging to transport digital creations from 3D design tools to metaverse platforms. Not a single standard is widely adopted, while there remain technical constraints on asset formats, quality, etc. In spite of this, artists keep making amazing creations that people are wearing in AR, VR, and in-game environments.

Brands regard Web3 as a playground in which to experiment with the concept of community in contrast to the old fashioned customer. That’s why the idea of co-creation is so powerful, as it brings brands and users together.

XI: There are multiple ways in which brands can benefit from Web3. For example, linking physical products with NFTs that record their data on the blockchain can enhance the authenticity of the product. Consumers are able to trace a record of previous owners as well as a garment’s production life cycle. Another example is brands launching phygital collections. While physical products inevitably age and accumulate damage, digital assets that come with physical fashion items can always be new, will not be lost, and can be upgraded over time.

Tribute Brand in Decentraland, Role Play collection, 2022. Courtesy of Tribute Brand

TB: Right now, I am interested to see how basics translate into the virtual realm. 

I believe that most people don’t want to appear like a walking fire. However, I strongly believe that the blockchain is the foundation of new economies for all users. 

That is certainly the approach of Tribute Brand, and I believe that most of us in digital fashion are currently building with the blockchain as our underlying protocol.

D: Digital fashion facilitates dressing with a boundlessness that defies the laws of physics. Performative phenomena simulated in runway shows — blazing clothes, or garments that strive to defy gravity — may be brought into the general arena for all to experience. “Process porn” is now common throughout the industry, where garments are becoming popular because they’re hard to make rather than because of their aesthetic or narrative appeal. That needs to change.

Web3’s aesthetic potential is realized when it is linked to a specific story, rather than being “a cool thing I made in 3D.” Certain technologies are particularly exciting: generative systems that create clothes that are both unique and recognizable as part of a brand’s identity; dynamic NFTs that promise a piece of virtual clothing that evolves with the seasons; as well as responsive digital fashion that, when linked to oracles, alters its form based on an owner’s behavior. In Web3, there are also ways for brands to reward loyalty — traced via a digital wallet — and respond directly to consumer demand. Instead of brands mass-producing and then burning old clothes, they can use Web3 to understand their market better and produce more efficiently. 

H&M and Institute of Digital Fashion, Under Water, 2022. Courtesy of Institute of Digital Fashion

AS: What are the limits of digital fashion in a space unconstrained by gravity and Euclidean geometry? How important is wearability in the metaverse? 

XI: There is no limitation for digital fashion because it contests gravity and physical materiality. But more importantly, digital fashion engenders inclusivity, since anyone of any size, gender, and identity can wear digital fashion without limitation. 

TB: The biggest limitation we face is technology. For example, augmented reality (AR) is still not widely accepted because it just doesn’t fit very well, nor is it the most convenient thing to try on, since you need to take out your phone every time you want to use it. 

The simple fact is, right now, it’s still easier for most people to express themselves through physical clothing. 

Meanwhile, the lack of interactivity in virtual spaces leads to fewer people socializing there. Over time, however, most of our socialization will happen virtually.

Model wearing Bullish earrings from The Fabricant’s digital accessories collection, 2023. Courtesy of The Fabricant

D: In essence, fashion is a vessel for social signaling, conveying ideas about an owner’s selfhood, affiliation, and status in the same way as art and furniture. The central difference is that fashion is tethered to the body. The question is whether something is still fashion if it’s carried on a smartphone or shared on social media. Perhaps it is only fashion if it is used as a PFP — the outfit one chooses to display. Given that these new online signals can take disparate forms I think it’s most interesting for them to change shape, conveying one’s essence according to the specific context. 

Tribute Brand has been doing incredible things here with their inaugural collection PUNK, playing on the “PINK” logo by Victoria’s Secret. Those who purchase a PUNK item obtain a generative logo to be used as a PFP, as well as a $PUNKY virtual dog for the metaverse and an NFC-enabled PUNK tracksuit to wear in real life. As this project makes clear, beyond the obvious aesthetic qualities of digital clothing, it also affords more interesting conceptual possibilities.  

TF: We are only just scratching the surface of what is possible to design in a digital format, largely because we are still attached to the shape of the human body. To sustain utility, we need to create garments that reflect our bodies’ movements in some way. I’m looking forward to seeing more visionary creations to that end that disrupt classical physics. 

IoDF: Wearability has a slightly different meaning in the metaverse, though it remains at the core of metaverse fashion. One of the principal advantages of dressing in the metaverse is that garments can be tailored digitally to a more diverse range of body types and genders. We are currently reimagining how a body wears clothes, rather than squeezing a physical body into sample sizes. On the other hand, the parameters by which we construct a digital garment depend on the technology currently available. The beauty of the metaverse is that it’s permanently in flux, which allows for new opportunities to extend creativity and utility.

One of the real constraints right now is interoperability, since one still cannot move between digital spaces with a single digital asset. True decentralization is still to be realized but we are working on that! 
Tribute Brand, PUNK drop including logo, 3D avatar, and NFC-enabled tracksuit, 2022. Courtesy of Tribute Brand

AS: In an expanded art world that is increasingly accepting of new media practices, where is the boundary between digital art and fashion?

XI: While fashion traditionally focuses on wearable items designed for personal expression and utility, digital art often explores concepts of identity, representation, and technology through a variety of media, including video, animation, and interactive installations. However, with the rise of digital fashion, which often involves the use of VR and AR technologies, there is a growing overlap between the two fields. 

Digital fashion can be seen as a form of wearable art, where the emphasis is on exploring new forms of expression and interaction through technology.

TF: I believe that the pixel — that quantum of visual information with which the user is familiar — makes the boundary between art and fashion very thin. All forms of digital content: whether fashion, art, or games, comprise pixels that emerge from creative processes with many steps in common, including modeling, rigging, and rendering. For me, everything digital is also creative, which is why there is so much interest from the art world in new forms of digital content. 

D: The expansion of what constitutes a wearable garment blurs the line between fashion and art significantly. What’s the difference between a digital dress and a digital image of a dress right now, at a time when so few people are actually wearing such creations in virtual worlds? Digital fashion may indeed be a whole new category of its own, sitting on the border of art and fashion. 

At DRAUP, we are leaning into the notion of digital fashion as digital sculpture, more art than clothing at this point. On that basis, instead of creating something impossible in the physical world, why not create something unthinkable. New ways of clothing ourselves will emerge that don’t need to align with our preconceived ideas about clothing.

DRAUP x Nicolas Sassoon, Coat variations (preview output), 2023. Courtesy of DRAUP

IoDF: Both creatively and financially, art and fashion have an historic affinity. While auction houses like Christie’s have long derived huge profits from the sales of the private art collections of fashion icons like André Leon Talley and Yves Saint Laurent. The Business of Fashion recently published an article which, to paraphrase crudely, suggested that auction houses are relying on luxury fashion and streetwear auctions to bring in a younger audience. Iconic designers such as Raf Simons and Vivienne Westwood have often referenced old masters in their own fashion collections, and we’re now seeing that continue with digital art and fashion — the recent Yayoi Kusama x Louis Vuitton campaign is a perfect example. 

Ideologically, art and fashion have always been intertwined, and the people who appreciate them are often the same. What has separated them in the past is their utility — you can’t wear a Jeff Koons or Caroline Walker. But, in the metaverse, you absolutely can. Fashion and art could become one and the same, rather than fashion being a subcategory of the arts. 

TB: In the physical realm, clothing cannot be considered art because it needs to serve a functional purpose of covering and protecting the human body, which art does not. But in the virtual realm, we are not bound by the functional aspect, as we don’t require our physical bodies. However, I still believe that there is a distinction between art and fashion in the virtual realm. In that context, fashion serves as a means to represent one’s intermediate identity, while art functions as a means of self-reflection. This is evident in the distinction between two of the most important digital art projects: CryptoPunks (2017) and Chromie Squiggles (2020). 

In my opinion, CryptoPunks can be considered fashion, while Chromie Squiggles are art, even though both are presented in a similar visual form. I have never come across anyone who represents themselves directly as a Chromie Squiggle, whereas there are numerous individuals who identify as Punks.
XTENDED iDENTiTY, Phygital Collection, 2023. Courtesy of XTENDED iDENTiTY

AS: We’d love to hear about any projects you’re currently working on. What are your goals for 2023?

TB: The first upcoming project is a triple collaboration with one of the most significant artists in this field and a very progressive physical fashion brand, so it will include both physical and digital elements. I think it has the potential to set the standards for how luxury fashion can be experienced in the future. We are going to connect the original art project with a digital blueprint that will feed the machine to produce unique physical garments, and all of this will have a digital layer on top of everything. Everyone in this space is currently experimenting and iterating, and there is no single platform or store that serves as a one-stop shop for digital fashion. That makes it all the more interesting!

D: My foray into digital fashion began in late 2020, when I launched This Outfit Does Not Exist to bring digital fashion to life in the wider imagination. As both the industry and my relationship to it have evolved, I’ve been interested to see that while the project is often regarded as cool by both fashion and Web3 natives, it has not attracted collectors. Instead, the market has been dominated by Fortnite skins and phygital sneakers. To me, there were a few reasons for this. First, the fact that fashion had never been positioned as an asset due to its link to a physical body; secondly, the gender of the traditional fashion consumer; and finally, the fact that the majority of digital fashion lacks narrative and craft.

Bailey Bass wears an IRL x URL dress by Institute of Digital Fashion at the 2023 Academy Awards. Courtesy of Institute of Digital Fashion and Getty

XI: NFT-fused phygital jewellery can offer an enhanced user journey that goes beyond the traditional “see it, buy it, wait for it, own it” model of E-commerce. 

Today’s upgraded user journey is: see it, buy it, own it in Web3 first, own it IRL later. That is the power of phygital fashion. 

Owners of an NFT-fused phygital collection are also afforded a mixed-reality ownership experience by interacting with the AR filters tied to the physical product. Owners can access an AR experience by tapping the NFC card accompanying our phygital jewellery with their smartphone. The matching AR filter is personalized with the physical jewellery, extending the product’s identity beyond its physical form. Our goals for 2023 are to deliver phygital and digital collections grounded in storytelling in order to allow mass adoption by consumers who wish to extend their identities digitally. 

IoDF: Following the Oscars, the Institute of Digital Fashion has a big moment coming up at Cannes Film Festival. Watch this space. We’re also looking forward to the next phase of our IRL x URL Learning Academy, and will be announcing a big tech E-commerce partnership this year.

TF: There is a lot going on at The Fabricant, with AI one component alongside AR and new approaches to co-creation. I’m excited about what we are trying to do in the field. I think digital fashion is at a pivotal moment — despite the crypto bear market and lack of mass adoption (so far), competition is nevertheless increasing. That’s a good sign that brands and investors are keen to grow the industry.

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With thanks to Alex Estorick.

DRAUP was founded with the aim to elevate digital fashion. Named after the Norse god Odin’s ring of endless wealth, Draupnir, it aims to bring out the value of digital fashion by expanding the creative and technological bounds of digital clothing. In its fullest expression, the platform will see a highly curated retail space for the best digital designers, a virtual wardrobe, and protocols that allow our clothes to be rented out to democratize access. Our first collection, SEEN ON SCREENS, is a collaboration with visual artist Nicolas Sassoon. Using coded systems, we are looking at creating textile prints that emerge out of the very layers of the digital garments, resisting the tendency of much digital fashion, whereby the physical is translated directly and so carries little weight as a digital object.

The Fabricant is a digital-only couture house that splices fashion with tech to redefine craftsmanship for the virtual space. It was founded in 2018 based on a desire to sabotage the fashion world’s cultural complacency and reimagine what fashion could be as an entirely non-physical experience. Through its co-creation platform it is leading a digital fashion revolution that puts creators first, committed to building a sustainable and equitable fashion industry where everybody thrives. As CTO at The Fabricant, Marco Marchesi focuses on building the tools for a new generation of creators across digital fashion, game technologies, blockchain, and AI.

Institute of Digital Fashion stands as an emblem for change, creating the new vocabulary for fashion’s metaverse futures. Providing world-class immersive digital solutions, strategies, and innovations, IoDF is pushing for a more inclusive, sustainable, and diverse IRL x URL reality. Through AR, VR, UX, NFTs, digital try-ons, research papers, and metaverse consultancy, IoDF delivers innovations that take the industry beyond its comfort zones, building 360 world solutions. Via education, activations, and discourse, IoDF’s work is moving the industry beyond its hierarchical traditions. Noted by Vogue Runway as “The masterminds behind fashion’s transition to the metaverse,” IoDF co-founders Leanne Elliott-Young and Cattytay hold various global accolades including Vogue Business 100 Innovators, Vogue Poland Global Vogue Leaders, and Vogue Greece Industry Changemakers. The duo are also key voices in Web3 and are building future-proof solutions that are inclusive, diverse, decentralized, and sustainable.

Tribute Brand is a collective that operates at the intersection of fashion and tech, revolutionizing the digital fashion industry and bringing it to the mainstream. Led by its co-founder and CEO, Gala Marija Vrbanic, since launching in 2020 Tribute Brand has gained a global following, collaborating with well-known luxury fashion houses along the way. Today, the digital fashion world is synonymous with the iconic looks that Tribute Brand has pioneered. Providing its own infrastructure, aimed at the generation that sees fashion as a tool for self-expression in both physical and virtual spaces, the brand’s products can be experienced in various realities.

XTENDED iDENTiTY is a digital fashion brand that aims to extend everyone’s identities without limits. We use blockchain, non-fungible tokens and augmented reality technology, to present fashion in an innovative, futuristic and gamified way.

Ashumi Sanghvi is the founder and CEO of MAD Global with fifteen years’ experience producing award-winning omni-channel multimedia content for luxury brands. She has a keen understanding of the rapidly evolving Web3 landscape when creating bespoke, digitally immersive experiences and projects. An alumna of the University of Cambridge Judge Business School, Ashumi is a mentor for Outlier Ventures x Farfetch Web3 accelerator, founding member of London Women Leading Web3, ambassador for Mission Impact, sits on the advisory boards of Huckletree, Qualia DAO, Metaverse Fashion Council, Metaverse Fashion Week, and has been listed as one of the Top 100 Women of the Future.