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Milan Fashion Week and trends in fashion law: fashion in the metaverse – a new era for brands – advertising, marketing and branding

From updating retail experiences to wearable technology, innovation continually inspires and influences trends and fashions. Even after Facebook’s renaming to “Meta” at the end of 2021, the term “Metaverse” has definitely entered the common vocabulary and fashion brands are continuously trying to conquer this new innovative world.

The Metaverse is a new virtual universe characterized by an augmented reality that combines aspects of the digital and physical worlds, allowing people to find new ways to digitally explore their everyday lives and live second lives through 3D avatars , driven by a technology that incorporates reality into the virtual.

In this innovative context, companies must therefore find new ways to stay relevant, and the rise of the metaverse still poses a great challenge – but also a great opportunity – for fashion brands. In fact, innovative technology in the fashion industry is more evident than ever. Fashion brands are entering the metaverse and transforming the shopping experience by also taking inspiration from physical retail to “phygital”. In this new world, avatars can actually visit new malls and fashion stores that offer digital clothing items that can be purchased with virtual currency, and try a new way of hyper-realistic shopping that goes beyond the traditional physical shopping experience.

Over the past year, a number of big brands have already taken a place in the Metaverse and expanded their businesses in a variety of ways.

Specifically, Nike, Gucci and Forever 21 partnered with Roblox in 2021, inviting digital consumers to embark on a unique journey each Nikeland, Shop Town or the virtual
Gucci Garden. Also, through a collaboration with Fortnite, Balenciaga has successfully accessed Web3 and created an authentic and exclusive collection of Balenciaga x Fortnite looks for users to purchase for their gaming avatars. Similarly, Ralph Lauren has partnered with South Korean social network app Zepeto to launch a virtual fashion collection for its players.

As part of fashion’s integration into the digital landscape, Fashion Week has alsophygital”. Brands such as Dolce & Gabbana, Etro and Elie Saab took part in the first Metaverse Fashion Week held
decentralized in 2022 with luxury brands, big names and digital native designers promoting their collections on 3D catwalks and exclusive events.

In addition to developing more diverse worlds and fashion experiences, brands are also leveraging NFT projects and more 3D designer engagements. In particular, Dolce & Gabbana scooped the record for the most expensive suit ever sold, a digital glass suit that netted the Italian brand a cool $1 million late last year, while Gucci’s virtual Queen Bee Dionysus bag recently sold for 350,000 Robux ( an in-game currency), which means $4,000 (that’s more than the real world value of the bag). Instead, Louis Vuitton launched a new video game that allows players to hunt for 30 NFTs hidden in its digital world. Such NFTs then allow access to various exclusive events organized by the luxury brand.

If the metaverse offers many new opportunities, it is also full of risks. In fact, companies operating in the Metaverse should be prepared to redefine their strategy to give due consideration to the relevant regulatory framework and legal issues that may arise in this new age. In particular, the creation of new virtual worlds that are populated by our avatars can lead to problems with regard to the processing of the user avatar’s personal data collected in the metaverse and with regard to the regulation of the contractual relationship that may be based thereon.

In particular, brands must ensure that users and their avatars also benefit from the protection reserved for them as consumers in the virtual B2C trading world. It is now a consolidated principle that consumers who shop online, regardless of where they are located and from which brand they buy, can benefit from the protection afforded them by the laws of their country of residence, which are more favorable to the consumer themselves are they may differ from those applicable to the seller. In light of the above, the same rules shall also be applied in the Metaverse to protect Avatar consumers.

Entering the Metaverse is also about marketing a fashion brand to a new community made up of gamers and their avatars, consumers who are immersed in the Metaverse and likely ready to connect with beauty and fashion brands virtually.

This may include influencers who, also in their virtual form, promote the most well-known brands and sponsor their products and services (the so-called “virtual influencers”). For example, Meta’s platforms now host more than 200 virtual influencers, including Nefele, twins Eli and Sofi, Shudu, Lil Miquela, Noonoouri, Rozy, and Twitch-renowned virtual streamer CodeMiko.

There are already many fashion brands that are turning to these virtual influencers to promote their products. Examples include Rihanna, who chose Shudu to promote her cosmetics brand Fenty Beauty, and Prada, Chanel, and Fendi, who have been collaborating with the famous Lil Miquela for years. This means that new forms of commercial communication are evolving and brands should not forget to comply with legal requirements for advertising in the metaverse as well.

Rather, from a self-discipline point of view, the transparency obligations already laid down in the Digital Chart Regulation must be observed, according to which virtual influencers must also explicitly declare the promotional nature of their content published online, provided that this is the case of commercial agreements that are identified by hashtags such as #Advertisement,
#ext or #Sponsored or alternatively,
#delivered by or #giftedby in the case of goods or services received without consideration for their advertising.

In this regard, the Italian Istituto dell’Autodisciplina Pubblicitaria (IAP) and the Italian Antitrust Authority (AGCM) have reaffirmed the principle that failure to declare the promotional nature of content constitutes a violation of the Code of Self-Regulation for Marketing Communications and engaging in unfair commercial practices. The fundamental principle underlying all advertising regulations is therefore the prohibition of hidden advertising and the need to make commercial communications transparent, clear and fair.

In addition, it is necessary to make explicit the unreality of these characters on platforms for the delivery of advertising messages, so that the user knows that he is interacting with an avatar and not with a human. In fact, companies should aim to develop technologies that are both ethically and morally reliable in order to be useful to society and meet human needs.

Therefore, while the Metaverse represents an opportunity to evolve the way businesses interact with their customer/user base, it is vital that the new virtual world can offer avatars the same legal protections consumers enjoy in the physical world enjoy.

The content of this article is intended to provide a general guide to the topic. In relation to your specific circumstances, you should seek advice from a specialist.

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