Direct to Avatar Economy

Since the invention of the Internet and video games, it was only a matter of time until people wanted to play as their favorite characters.

Image Source: Balenciaga, The Age of Tomorrow

To be your true selves or someone you admire in digital form or expand on who you are as digital avatars. Designers are shifting their focus back to creativity with technology at the heart of it. In order to market to future customers, they need to meet them where they are at - in the metaverse (Fortnite or Roblox).

The digital avatars trend started in the gaming industry and soon we saw luxury brands collaborating with these. Balenciaga, a France-based luxury firm created its own video game “Afterworld: The Age of Tomorrow” and introduced its 2021 Fall & Winter Collection there. It used gaming as a platform to showcase new fashion items for one-time use.

"Direct-to-Avatar (D2A) refers to an emerging business model selling products directly to avatars (D2A) - or digital identities - bypassing any supply chain management like dropshipping, logistics of how to get a physical product to a consumer's door"

-Ryan Gill, co-founder, and CEO of Crucible

With digital avatars comes the digital world, everything in it is the same as the real-world digital accessories, digital skins, digital wardrobes, virtual real estates, virtual spaces, virtual vehicles, and so on. These assets are contributing to the direct-to-avatar economy. In Sims Online, McDonald’s installed virtual fast-food kiosks, complete with automated employees working at the counter and able to serve up (free) virtual burgers and fries to residents who made their selections from a clickable menu.

Image Source: The Sims Gallery

Earlier we have seen brands releasing NFT accessories for our digital selves. As the digital avatars trend is expanding, brands are now focusing to create an experience for these avatars. Believe it or not, these immersive experiences are better than the real world!

For example, Tafi (a provider of 3D avatar solutions) has partnered with PIXELYNX to share a common vision of bringing digital avatar experiences to the "direct-to avatar" ecosystem and will start by releasing NFT collectibles in collaboration with broader gaming and music experiences in the virtual worlds.

Why NFTs are there to stay?

Lack of exclusivity in the digital world is what makes Luxury Fashion hesitate from this media. Enter NFTs, the blockchain-backed technology that ensures uniqueness and value. Luxury brands are creating digital scarcity through NFTs.

Moreover, digitalization in the fashion industry has contributed to the sustainability of consumption. DressX conducted research that highlighted that 9% of customers in developed countries only buy new clothes to add a picture for their social media and return after taking a photo. These unnecessary returns pose a big logistical challenge for retail. Essentially, these clothes don’t need to be produced - they can only exist in the digital space.

NFT is providing platforms for a brand to advertise its physical products as well. It is increasing the customer lifetime value by providing hyper-personalized marketing campaigns, and through digital asset ownership as additional goodies over time.

Image Source: Jacob & Co.

On April 4, 2021, ArtGrails auctioned off a one-of-a-kind NFT created by Jacob & Co.’s internal design team. The highest bidder received all the physical accouterments that come with a high-end watch, like a certificate of ownership and a case. The case contained a hard drive with the NFT — a digital rendering of a Jacob & Co. watch. Benjamin Arabov, CEO, Jacob & Co., believes NFTs is new ground for the company, but he envisions a bright future for the technology’s usefulness in fashion.

Consumers’ privacy concerns about the detailed tracking of avatar data pose obvious challenges. SSI (Self-Sovereign Identity) is a relatively new concept that could reshape the way personal data is stored by providing a faster, more efficient, and user-centric decentralized approach.

D2A will remove another layer of the friction that still exists for brands and allow some to reinvent themselves and find new inspiration. Brands can start exploring what their brand's virtual identity will be in these evolving virtual worlds.


The Team:

Shriya Madan, an ardent learner, a digital enthusiast, aspires to make an impact in the real world with the power of technology

Pranjali Apurva, driven by curiosity, converging design principles with digital transformation

BLVCK PiXEL is a Digital Innovation Consultancy headquartered in Paris. We aim to bridge the gap between Technology & Business through Design-led Strategy. Connect with us.