The Next Wave: Retail Trends in 2023 Post-NFT Rush
In 2022, luxury and fashion brands rushed into the NFT and metaverse trends, but faced challenges like market crashes and controversies. In 2023, the Web3 landscape has matured, prompting the industry to refine strategies.
CONTEN.T explores emerging trends in the digital sphere and their implications for fashion. Despite setbacks in 2022, significant opportunities for the fashion industry in Web3 persist.
Immersive e-commerce, known as i-commerce, has emerged as a prominent Web3 trend this year, drawing the attention of major brands such as Lancôme, Lululemon, Ralph Lauren, and Charlotte Tilbury. Erika Lang, Head of Americas at Journee, a virtual e-commerce company behind Clinique and H&M activations, emphasizes that i-commerce is the most practical adoption of Web3, transforming online shopping by offering deeper customer engagement.
The immersive e-commerce market is projected to reach nearly $800 billion in value next year, as indicated by Bloomberg Intelligence. Additionally, Acxiom's survey highlights immersive shopping as a key e-commerce trend shaping the retail landscape. Beyond its appeal, i-commerce serves as a valuable data source, providing brands with detailed insights into customer behavior, product popularity, virtual foot traffic, and browsing habits, facilitating informed decision-making.
Augmented reality (AR) is transforming the physical retail landscape as virtual stores immerse consumers in digital content. According to Zion Market Research, the smart mirror market generated approximately $3.44 billion in revenue in 2022, with projections indicating it could reach $7.3 billion by 2028.
In response, numerous brick-and-mortar retailers, including JD Sports, Tiffany & Co, Tommy Hilfiger, and Coach, have embraced AR technology, particularly through try-on mirrors, in their physical stores. At CONTEN.T we are have been hard at work to provide quick to deploy retail based AR experiences as the demand surges among our brands. One of the biggest advantage of these sort of frictionless experiences is the speed to engagement where users can be quickly attracted without needing their mobile device.
AI-generated content and machine learning technologies have rapidly become essential tools for businesses and brands, despite only gaining mainstream prominence last year. As AI designer Marco Simonetti noted earlier this year, AI presents luxury brands with the opportunity to engage a broader community of potential consumers by creating innovative experiences that bridge the gap between dreams and reality.
This sentiment remains highly relevant today, with an increasing number of fashion labels and independent designers exploring the potential of AI in their strategies. Notably, China has embraced this technology trend, with companies demonstrating a strong understanding of how to leverage AI to connect with consumers. The mainland's AI market is projected to surpass $26 billion in value by 2026, driven by significant investments and widespread adoption. Nevertheless, challenges persist, including the need for regulatory clarity and copyright protection, particularly in the contentious domain of AI-generated humans. As legislation becomes more defined, the utilization of AI by luxury fashion brands is expected to experience significant growth.
Exclusive phygital products are gaining momentum as luxury fashion brands look to unlock the true potential of digital assets in a market projected to exceed $2 trillion in the coming seven years, according to McKinsey. To counter skepticism surrounding digital investments, brands are bridging the virtual and physical realms by pairing virtual counterparts with physical products, thereby doubling the appeal and creating a new range of highly coveted items.
Gucci has emerged as a trailblazer in this trend, collaborating with the Web3 community, Yuga Labs, to launch its debut 'relic' – the KodaPendant – in April of this year, generating significant social buzz. Furthermore, Gucci introduced an exclusive physical collection of branded handbags and wallets for its Web3 community. Similarly, the Ralph Lauren x Fortnite phygital P-Wing boot sold out rapidly, leveraging gaming-inspired elements. The physical component proves crucial for luxury consumers who are not yet prepared to fully embrace virtual experiences, serving as a tangible and accessible entry point into the digital realm.
NFT-powered community memberships have emerged as a compelling strategy for brands seeking to harness the potential of virtual assets without the associated risks and volatility that have characterized the NFT market in recent times. In a bid to foster stronger customer relationships and secure brand loyalty, companies are turning to these memberships, offering exclusive incentives such as access to special events, early access to new collections, and direct communication channels with beloved brands.
Luxury brands have embraced this trend, with industry leaders like Mercedes-Benz, Asprey Studio, Adidas, and Gucci launching their token-gated memberships. This approach has resonated particularly well with brand loyalists. For instance, Mercedes Benz's Web3 venture, NXT, recently experienced overwhelming demand during its digital pass launch, which led to server crashes. While some users expressed frustration, the incident underscored the high demand for exclusive token-gated communities.