In early December, it was announced that the Nike-owned virtual sneaker brand, RTFKT, would cease operations. RTFKT, founded by Benoit Pagotto, Chris Le, and Steven Vasilev, sought to merge their passions for video games and sneakers. It demonstrated that the multi-billion-dollar sports apparel giant was exploring the realm of NFT and virtual goods within their brand. In April 2022, RTFKT revealed a virtual sneaker collaboration, allowing customers to design shoes with customizable ‘digital skins.’ Although physical replicas were available for purchase in very limited quantities, the digital sneaker was undeniably the main product.
Shortly after this project, however, crypto prices crashed and given the volatility of the market, there was less interest in owning NFTs. Despite efforts to engage customers with new releases, the brand struggled to retain momentum. As Elliot Hill took charge as Chief Executive of Nike in October, however, there is speculation that Hill is focusing on the core units of the business, and getting rid of peripheral branches of the business, including NFTs.
With RTFKT being just one of many failed attempts to combine crypto and fashion, the question arises: is this a trend that signals an anti-digital pivot, or could virtual fashion truly represent the future?
The Future of Virtual Fashion
To assess the future of virtual fashion, it is essential to recognize how the concept is evolving. Initially, the intersection of technology and fashion was dominated by blockchain-based products like NFTs. More recently, however, the industry has shifted focus toward the integration of artificial intelligence (AI).
A report by Bain & Company highlights how luxury goods houses are expected to significantly increase their use of AI in the next two years. According to the report, each luxury brand studied was either testing or planning to implement at least five AI-powered systems across their value chain. This shift has the potential to revolutionize processes involving designers, sales ambassadors, and customer engagement.
Some luxury brands are already leveraging AI to enhance customer experiences. For example, Louis Vuitton has introduced an AI-powered platform called the LV Virtual Advisor, which provides tailored product recommendations and personalized customer service, mimicking the exclusivity of in-store interactions. Similarly, data-driven marketing is an emerging AI feature that is likely to become increasingly prevalent in the luxury sector. By analyzing consumer data, brands can craft highly personalized campaigns and products. This storytelling-like marketing approach deepens customer connections, utilizing psychological and language analyses to understand consumers on a more profound level.
Moreover, AI is transforming the design process itself. At Gucci, for instance, AI works alongside human designers to predict upcoming trends and align them with the fast-paced demands of the digital era.
While these developments are exciting, they come with significant challenges. One pressing ethical issue involves lawsuits against retailers using virtual try-on features on their websites. These tools, which simulate the physical shopping experience by letting customers see how products look on them, offer sustainability benefits by reducing returns and waste. However, concerns over biometric privacy violations have surfaced, particularly with items such as glasses and jewelry.
Luxury brands have faced legal scrutiny in this area. In December 2022, the U.S. District Court held a class-action lawsuit against Louis Vuitton regarding its virtual glasses try-on feature. Plaintiffs alleged that the feature collected users’ facial scans without proper consent. In 2023, a similar case was brought against Christian Dior, but the court ruled in Dior’s favor, as sunglasses qualify as Class I medical devices, which fall under healthcare regulations. This distinction allows virtual try-on features for sunglasses to remain legally permissible.
The evolving legal landscape surrounding virtual fashion, particularly the ‘try on’ features, highlights significant challenges for the future of this technology. A particular issue will be the impact on innovation in this realm. For smaller designers, seeing luxury brands face these legal risks might slow down advancement of other interactive digital fashion features.
However, these features are only a fraction of virtual fashion, and what the future of virtual fashion will hold. With the rise of AI in fashion there is excitement, but there is also concern, many remain apprehensive about the use of technology for creative purposes. We’re left wondering, will Artificial Intelligence transform the Luxury Fashion industry, cutting costs and improving craftsmanship? Or will it compromise the essence of luxury, perhaps undermining concepts of authenticity? It seems only time will tell.
By Skye MacLeod Lockhart
