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Selfridges opens first metaverse department store as Fashion Week adds virtual element

Selfridges opens on the metaverse

As part of Fashion Week’s push into the metaverse, Selfridges has opened the first ‘metaverse department store’, with 70 brands taking part.

Part of Decentraland’s Metaverse Fashion Week, the store offers shoppers the chance to see exclusive NFTs by Paco Rabanne and Fondation Vasarely in a virtual store and is also set up to take cryptopayments.

The retailer joins Tommy Hilfiger, Etro, Dolce & Gabbana, DYNY, Privé Porter, Charles & Keith, and WyldFlwr in opening virtual stores during Fashion Week this month, each offering exclusive NFT versions of items for sale for use elsewhere in the metaverse, as well as NFTs that can be redeemed for real-world exclusive goods.

The virtual sites can also be clicked through to the brands and retailers’ regular ecommerce sites, showcasing how the metaverse may yet lead to more real-world sales.

According to the latest RetailX Luxury Sector Report, the metaverse is increasingly being seen as a burgeoning new market for luxury fashion retail, both for the sales of luxury apparel and accessories for avatars within the virtual world, as well as being an on-ramp for more standard ecommerce.

Already leading luxury brands have been tentatively exploiting this new way of selling. The Gucci Garden, for example, offers a pop-up on Roblox that sells the brand’s designs – sold a single bag for over $4,000 in real-world money. Additonally, Tommy Hilfiger’s venture capital arm announced a partnership with viral marketing agency EWG Virtual to focus on “v-commerce”, while Burberry created a string of unique playable NFT creations called Sharky B that live in Blankos Block Party from Mythical Games. The characters include accessories like armbands, jetpacks, and pool shoes. The creation collection sold out quickly for almost $400,000.

Balenciag, meanwhile, launched its collection of clothes in Fortnite. These “skins” (outfits for game characters) are purchased using V-Bucks, the Fortnite world currency. V-Bucks are purchased with real money, while Dolce & Gabbana sold its nine-piece ‘Collezione Genesi’ collection on the digital luxury marketplace UNXD for $5.7m.

The metaverse gets taxing

While the metaverse is seen as a hot new market for many fashion and luxury brands, there are still potential issues with it, not least payments.

According to Jackie Kyle, Director of Strategy and Corporate Development at Digital River, “Those expecting the transactions in the metaverse to look like today’s online transactions could be in for a surprise. Payment methods will evolve, and things like tokens or cryptocurrencies could become preferred payment options. Brands will need to have the infrastructure to adapt quickly and accept the rapidly evolving payment types and virtual currencies customers will come to expect.

“Purchases are going to be taxed, and it’s likely that physical location is still going to dictate which taxing jurisdiction to apply to transactions. While fully virtual transactions may not tie directly to the physical world, a user’s physical location is the easiest way for governments to ensure that no purchase goes untaxed.

“Current regulations stipulate that the taxation of services is based on the location or habitual residence of the buyer, while the taxation of physical goods is based on the ship-to location or jurisdiction.”

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