17 August 2021
Kerry Murphy, founder and CEO, The Fabricant
Aug 16, 2021
"People are going to see more value in digital assets than in physical assets."
From Gucci’s AR sneakers to digital fine art, virtual possessions are gaining traction. Curious how this is informing consumer behaviors and value matrices? We asked Kerry Murphy, founder and CEO of digital-only fashion house The Fabricant, to share his thoughts on the future of digital goods and ownership.
Murphy speaks with us about digital luxury, the value of virtual goods, and how the metaverse is going to become part of our physical lives.
For more, download our report: "Into the Metaverse."
How soon will we see people waking up in the morning and picking out an outfit for their avatar?
I think in the Western world, a lot of people already do, especially people who are avid gamers. But when is it going to go outside of the gaming realm? Once we start to see interactive experiences that have daily functional value outside of gaming, beyond just entertainment.
That’s the tipping point that I foresee for mainstream adoption: once it becomes more functional, becomes part of work, part of communication with the family or friends. That's when it's truly going to kick off.
How is digital couture impacting the luxury market?
I think [digital couture] is completely different from the luxury market itself. And I think the additional value for, let's say, a Roblox Gucci bag is the resale market—the fact that it's going to have an infinite lifecycle. It can live for the next five hundred years, thousand years. The value is not going to decrease; it's going to grow. But the value of the physical bag is completely different because even when it's new, it's just decreasing in value. Sooner or later, it's going to wither and die—that physical item will disappear. Digital items will never decline or disappear.
So, for somebody like Gucci, jumping into the Roblox space is a smart move. It's an untapped market right now; they actually get to experiment. But it’s completely different from the current luxury industry. It's a new market, a new consumer—it's not your typical Gucci consumer who's hanging out on Roblox.
I think people who are buying digital assets right now, they're going to see more value in digital assets than in physical assets. That's going to be the big change.
How can brands cue luxury in the digital space? What does artisanal craftmanship look like digitally?
Great question. We deal with that every single day because that's what we take most pride in: our digital craftsmanship. We still talk about the same things [as physical designers]. We talk about materials, but now it's digital materials. We're talking about stiches, but digital stiches. Every single thing that you have in the physical world as a craftsman is also in the digital world. It just comes with a layer of new technology and a new skill set that you need to be able to apply in order to make those digital stitches high quality.
What creative limitations that exist in the physical world are removed when designing virtually?
We’re not bound by physical limitations like gravity and material durability.
It's the cliché that your imagination is the only limitation. If you can think it, [digital designers] can make it for you.
Do you think we'll ever get to a point where digital possessions will replace physical possessions?
I don't know if 'replace' is the right word. They're adding value. They can be a counterpart to physical possessions, but they can also have a life of their own, completely disassociated from physical reality.
What I think will happen, especially for the fashion industry, is that by introducing these digital business models, we're going to reduce the amount of physical items. People are going to start seeing value in digital items and realize that they'd rather interact with a digital item, or have an infinite wardrobe of digital fashion items but a very limited wardrobe of physical items.
But first, what needs to happen is those digital experiences need to become something that's better than the physical experience. Think about buying music—I used to love to go to the CD store and flip through all the CDs. But right now, everything is on Spotify for me. It's like I have the whole world. But I have all these CDs that are still somewhere in my wardrobe. I can't get rid of them because nobody wants to come pick them up, even for free.
That's what's going to happen with fashion as well.
Take sneaker heads. Their closets are full of sneakers, and they never get to show them to anybody unless somebody comes over. Now, wouldn’t it be much better if, let's say, those physical sneakers are being held somewhere in a warehouse. You know you own the physical counterpart, but everything that you own is just on your mobile phone. And, you know, if you want to show it to your friends on your phone. And if you really need to have the physical item, you can get it.
What are some hurdles that need to be cleared before digital possessions really take off?
We need the interactive experiences, and what we call utility—the use cases, so people actually get to use [digital possessions in multiple different ways. Another key word that we use a lot is interoperability—so if you buy that one item, you actually get to use it in games, in AR experiences, put it on your social media, etc. That's kind of what's missing right now. That user experience is just not great yet.
I think that’s going to be the massive turning point to your earlier question as well: when are people really going to wake up every single morning and think about what they're going to wear virtually? Well, once we have those virtual experiences that are actually worth taking part in.
How do you define the metaverse?
I think the simple answer is that the metaverse is just a digital layer of our lives. The metaverse will exist once everything that we do digitally is completely, seamlessly connected—there’s this whole interoperability side. So if I buy this yellow t-shirt in Fortnite, I get to wear it on Instagram, I get to wear it on Facebook, I get to have an AR wearing experience, and they’re all completely interconnected.
There’s a really good graphic, it’s called the Magicverse from Magic Leap. It illustrates all the different layers of infrastructure that we have in our lives, and the top layer is this fantasyland, and I think that’s what the metaverse is like.
The metaverse is just an extension of our physical lives into the digital realm. They’re actually going to stop blurring into each other. The metaverse is going to become part of our physical lives. You know, once glasses get an AR filter, I don’t need a laptop anymore. I could be having this video chat with you just with my glasses—just a virtual interface. And everything that I have in my physical space is connected to the Internet. So I would be able to interact with my digital items in my physical life without, let's say, this clunky laptop. Laptops are going to disappear. Maybe even smartphones are going to disappear.
What's next for the Fabricant?
I was talking about those experiences that need to be good enough for people to actually want to interact with digital fashion. We're building what we believe is the experience that people will want to take part in within the digital fashion narrative—to buy digital-only clothing because they see that value for their virtual lives and actually coming into their physical lives
By 2025, we want to be what we call the wardrobe for the metaverse. When people think about buying digital-only clothing, we want them to think The Fabricant first. Call it the wardrobe, or the wholesaler or the distribution center. Call it what you like. It's basically where you’re going to come and get your digital-only clothing, purchase it there and then use it everywhere within your virtual existence, creating your virtual identity as you want.