With rapid climate change negatively impacting the globe as we know it, the new climate economy (both as an aspirational ideology as well as a project) has emerged as a tool aimed to allow corporations to redeem their carbon footprint by looking ahead with their sustainability goggles on.
COP26 demonstrated promising proposals from governments globally, and while having world leaders and governments on the planet’s side will aid in combatting climate change, the real gamechanger to paving the way for a greener planet is corporations, not politicians.
In our Luxury Change series, allow us to shed light onto on what to expect from the world of luxury from a legislative, consumer, and ecology perspective in 2022.
A New World, a New Business Model
The metaverse has emerged as an extended limb of the internet, being a virtual space where users can interact, socialise, and exist between different worlds and platforms in a virtual 3D identity and while holding digital possessions and currencies.
The metaverse and digital living in general is expected to boom, at an unparalleled speed. Whether through virtual reality or augmented reality, the brain thinks it’s real and creates memories just like in the real world. From a brand perspective, this will allow the brand to engage with its consumer on an unprecedented level, encouraging co-creation and genuine interaction. It will allow luxury brands to reach new audiences by surpassing physical restrictions and diversifying their revenue streams through digital products. In a new digital economy, pioneers can emerge by utilising the space between physical and digital worlds to their full advantage. Balenciaga has even created a metaverse specific strategy department. Gucci sold a digital handbag as an NFT in the metaverse that cost more than its real-life physical retail value. A piece of land even sold for £2.2 million in the metaverse recently. It’s no longer just a game.
There are however two sides of the coin when it comes to the metaverse’s environmental impact. On one side, digital growth through digital assets means less physical consumption of natural resources. On the other, the metaverse and digital assets such as NFTs have a massive carbon footprint due to the increasing share of Ethereum’s total energy use through energy-intensive computer functioning, especially when mining. Therefore, luxury brands will still need to consider their carbon footprint when entering the NFT world.
One of the other limitations for luxury in the metaverse is that digital fashion has been platform specific thus far. Meaning a Gucci skin purchased in Fortnite, or a Louis Vuitton skin purchased in Legend of Zelda, can only be used on each respective platform. It can’t be transferred to another game or world. This is not to confuse digital fashion NFTs though, which can be traded on social media. An upcoming prediction is that all the worlds in the metaverse will mesh into one at some point in time, allowing digital luxuries to be worn in all realms. It already interacts with our present physical world by using real money to purchase such assets.
For more on fashion and the metaverse, check out this article in The Collective by Lewis Silkin’s Business in 2022 Report.