The silent return of digital fashion

At the peak of the pandemic, fashion and luxury brands were rushing to claim their stake in the new terrain of web3 fashion. In 2021, Dolce & Gabbana set a record for selling its NFT collection - a series of phygital items and virtual garments - Collezione Genesi for 6 million USD. Balenciaga partnered with Epic Games to bring high fashion to Fortnite and 777 Karl Lagerfield NFTs sold out in 33.7 seconds. Blockchain technology was hot and innovation leader brands like Nike were pioneering this new frontier. However, after the pandemic, interest in digital experiences and collectibles waned. The crypto boom crashed and the fashion world pronounced web3 fashion dead. And yet, high performing brands such as Louis Vuitton, Prada and MiuMiu continue to invest in and develop their digital offerings. The state of web3 fashion remains unclear. Could 2025 be the year it makes a comeback? 

Last week, Nike announced the closure of RTFKT, its virtual sneaker brand acquisition of 2021. What was heralded as a huge step forward at the time is now yet another covid era bet on web3 fashion that didn’t pan out. Although the official amount was never disclosed, RTFKT is believed to have been bought for $1 billion and marked a major milestone for web3 fashion. At the time, RTFKT experienced huge success selling NFTs in the form of virtual sneakers, clothing and even 3D metaverse-ready avatars. Shortly after acquisition, Nike launched its own platform Swoosh to educate people around web3 and build a community of street-culture-loving, digital fashion enthusiasts. The fusion of sneaker culture, gaming, and web 3 technology had never felt so real. The boundary between physical and digital creativity, between artist and collector, so paper thin. But since the pandemic ended, the market value of NFTs waned and the hype around virtual fashion subsided. Opensea – one of the biggest NFT marketplaces – dropped from being valued at 13.3 billion to 1.4 billion US dollars from 2021 to 2024. The immensely popular NFTs by Bored Ape Yacht Club - now Yuga Labs – have also dropped by 90%. These come as hard blows to the 2021 hopes of web3 fashion. But beneath the appearance of rapid decline, web 3 fashion is still showing signs of life. High performing luxury and fashion brands like Prada, MiuMiu, and Louis Vuitton continue to develop their virtual clothing and experience offering. 

In June 2023, Louis Vuitton launched Via Treasure: a phygital treasure trunk and non-transferable NFT - meaning it cannot be resold – for $ 39, 000. Since then, it has continued to regularly drop phygital products that are only purchasable by the insider community - the circa 200 clients that own a Via Treasure Trunk. In doing so, the brand has successfully created a small but highly lucrative client segment that continues to buy their NFTs. Sensing the excitement around crypto and web3 wane, Louis Vuitton checked its ambition and continued to grow its web3 venture slowly and silently. The fourth and latest release in April 2024 was a phygital varsity jacket from the FW24 collection, priced at $ 7900.  Continuing to sell NFTs long after the hype of web3 fashion disappeared demonstrates the Maison’s belief in the future of web3 fashion and understanding of the growing value of owning a digital counterpart to a physical item. The importance of the digital twin in fashion became increasingly clear in September 2024 when the European Union started implementing new legislation requiring nearly all products sold in the union to have a digital product passport (DPP). This indicates the future need for digital counterparts to physical items and Louis Vuitton understood the assignment, ahead of time.

But the future of web3 fashion is not just limited to digital counterparts of physical items. As the relationship between the physical and digital world becomes more and more enmeshed, web3 fashion opportunities emerge in a plethora of forms, from producing avatar clothing to launching immersive experiences on gaming platforms. Prada Group, a long time partner of gen z social media app Snapchat, recently launched a virtual collection that users can purchase for their bitmoji (avatar) to wear. In April 2024, Gucci released a mixed reality experience via Apple’s Vision Pro featuring a short film Who is Sabato de Sarno? A Gucci Story, where users can curate their own virtual spaces and interact with 3D products inspired by Gucci Ancora. To keep their NFT community growing and celebrate their first year on the platform, Louis Vuitton launched a week-long mini-game on Discord - the instant messaging platform for gamers- in November. These morsels of web3 news, when woven together, point to a wider pattern. It may not be at the same frenetic pace as 2021, but web3 fashion’s pulse is still beating.  In its closing statement, Nike writes : « RTFKT isn't ending. It's becoming what it was always meant to be - an Artifact of cultural revolution. » After all, there are always casualties in a revolution. The nature of innovation cycles is inflammatory, and the manic rush of the pandemic-era crypto boom was never a likely environment for brands to develop sustainable web3 offerings. Following the Trump re-election, and his promise to make America « the crypto-capital of the world », who knows web3 fashion ventures 2025 holds in store.