Move over NFTs, there’s a new way for cashed up kids to spend their hard earned.
Luxury handbags are a status symbol recognised the world over. Now, they’re getting the digital treatment.
Global fashion powerhouse Gucci made headlines recently with a transaction for one of its popular Dionysus bags, usually retailing for a cool $3330 in Australia. However, you won’t be wearing this flashy bling to glitzy poolside soirees anytime soon.
The transaction took place on Roblox, an online gaming platform, and the handbag in question consists of nothing more than pixels in the cloud. The price tag, however, was still enough to make a fashionista blush at a cool US$4115 — that’s right, at $5421 Aussie, the price tag was greater than for the physical item itself.
With Roblox’s core demographic consisting of ages 9 to 15, that’s a lot of pocket money in anyone’s language.
The bag and other digital-only items were part of a limited Gucci collection for Roblox, a move by the iconic fashion house — which prides itself on Italian craftsmanship — to enter an expanding virtual space where many of its youngest admirers are already comfortably at home.
It’s the latest move in a growing trend by major fashion houses to tap into the lucrative youth market. Before the pandemic, LVMH designed a signature collection for Riot Games’ League of Legends. Burberry teamed up with technology giant Tencent last year to add its hallmark tartan design to characters in the popular Honour of Kings video game.
Collect The Coins
Statista estimates that in-game spending on items such as digital clothes and accessories and character upgrades was around $54B globally in 2020 and predicts numbers to hit almost $75B by 2025.
That’s not game sales — these users have already paid for and own the game. This is additional spending to ‘enhance’ the users’ in-game experience.
The global games industry is big business, and in Australia, is valued at around A$3.4 billion according to industry body iGEA.
While PwC does expect a bit of a slowdown as the aftershocks of the pandemic subside, the industry is still expected to grow at a CAGR of 6.87 per cent to 2024.
It’s Fashion, Darling
It may sound crazy to spend this type of coin on digital assets, but in context it makes sense. Think about the behavioural shifts in the last year to a more digital-centric world — would you pay a few more bucks to have a custom Zoom background? A more interesting, high definition visual presence in those remote meetings?
Gamers have been living in their own digital worlds for decades and purchasing add-ons, such as stickers or character armour, since at least the mid-2000s. It makes sense for this behaviour to evolve into what we’re seeing today.
On The List
While fashion pushes into these new digital frontiers, the industry is expanding into more obvious avenues as well.
Once market darling and now lagging social network Snap (formerly Snapchat) has embraced the digital push by fashion brands with the announcement in May of its own Augmented Reality (AR) powered glasses — Spectacles, distributed to a select group of app developers and creators. Snap also announced a partnership with recommerce marketplace Poshmark, which could mean augmented reality ecommerce is in our near future.
Considering its web site doesn’t work, though, that might tell about what you can expect from the company.
Besides, we’re already seeing the buds of a very profitable pathway to the trillion-dollar ecommerce garden. In February, cult fashion boutique Machine-A and the Institute of Digital Fashion are launching an augmented store environment, akin to a virtual reality store, to promote London Fashion Week.
The future is already here — it’s just not very evenly distributed.