Digital fashion hasn’t exploded into the mainstream in the way some predicted, but its impact is steadily growing. Avatar fashion has taken center stage, offering brands a unique opportunity to connect with next-gen audiences on gaming platforms. But the influence of digital fashion extends beyond gaming—it's shaping a fresh approach to digital self-expression.

As our lives become increasingly digital, it's no surprise that our need for self-expression has found new platforms. Just as people have adorned themselves for centuries in real life, we're now showcasing our style online. This shift is evident in the rise of gaming skins, AR filters, phygital clothing (merging physical and digital fashion), and 3D virtual try-ons on e-commerce sites. Major brands like Gucci, Moncler, Louis Vuitton, H&M, and Zara have embraced digital fashion, riding the hype from 2021-2022. However, as the initial buzz fades, it raises the question: Has the momentum truly stalled, or is this just the beginning of a deeper transformation? Understanding the nuances of this shift is crucial for brands aiming to stay relevant.

What is digital fashion in 2024?

Digital fashion began with early gaming skins in the mid-2000s, gradually expanding as technology and interest evolved. Over the following decade, it grew beyond simple in-game outfits, with advancements in AR, VR, and blockchain technologies paving the way for more immersive experiences. By the late 2010s, pioneers like The Fabricant were pushing the boundaries of what digital fashion could achieve, bringing it into the spotlight. The COVID-19 pandemic, which drove more people online, fueled increased interest. 

2021 and 2022 finally pushed digital fashion into the spotlight, with the most expensive digital fashion item to date, the Dolce & Gabbana “Doge” crown, selling for a record-breaking $6 Million and Morgan Stanley predicting a $50 Billion revenue for digital fashion and luxury items by 2030. But by 2023, there was a noticeable consolidation in the industry as companies and consumers became more discerning about the value and utility of digital fashion. Today, digital fashion continues to evolve, with numerous ways to explore and express personal style in the digital realm.

How to dress digitally. 

As digital fashion continues to mature in 2024, it’s becoming more than just a novelty—it's a dynamic way for people to express their identities in virtual spaces. From augmented reality try-ons to styling avatars in virtual worlds, digital fashion offers new opportunities for creativity and self-expression. Brands are tapping into this evolution by exploring three main areas: dressing digitally with AR, dressing digitally in VR, and connecting physical garments to digital experiences. Let’s take a closer look at how each of these options is shaping the future of fashion:

1. Dressing with AR.

What began with basic filters for sunglasses and makeup has now advanced into full-body virtual try-ons, letting users see how clothing, shoes, and accessories fit. Although body tracking technology has improved, it still faces challenges—like ensuring smooth necklines or accurately capturing body movements—before virtual try-ons can fully become mainstream. As 57% of consumers say they are more likely to buy after virtual try-ons, brands are capitalizing on this area of digital fashion by offering immersive AR experiences. But AR isn't just for online shopping—it's also adding digital flair to people's social media appearances: There are no limits to digital fashion, so designs can be as outrageously creative as possible. With emerging Mixed Reality glasses and Apple Vision Pro headsets, everyday fashion could soon become interactive.

2. Dressing in VR.

In Virtual Reality (VR), dressing up has evolved with the rise of avatar customization. VR platforms and games allow users to express their personal style through virtual clothing, often referred to as skins. This trend is not just for fun. Though gaming is often seen as kid-focused, the reality is more diverse. It's a growing market where fashion brands are seeing a significant impact. The average female gamer, for example, is 33 years old, showing that digital fashion appeals across age groups. Luxury brands like Balenciaga, Moncler, and Ralph Lauren have launched exclusive virtual collections for games like Fortnite, while others like Gucci and Burberry have explored virtual fashion on platforms in Roblox and Zepeto. In 2023, nearly 1.6 billion digital fashion items and accessories were purchased on the Roblox marketplace. While no official numbers exist on the sales of Fortnite skins, it is known that in 2023, Fortnite paid out $204 Million to developers on the platform, a 300 per cent increase from the year before. 

3. Dressing IRL with links to digital.

Phygital fashion, where physical garments are linked to digital experiences (also referred to "connected fashion"), is paving the way for the next evolution in the fashion industry. This concept includes clothing items embedded with NFC chips or other digital technologies, enabling new forms of interaction and engagement. For example, "Onchain Clothing Brand" 9dcc is exploring the use of NFC chips to provide exclusive digital content and community and to verify the authenticity of physical fashion products. Balenciaga has integrated music and gaming with real-world fashion items via NFC chips, and Prada's Time Capsule combines limited-edition releases with digital assets. Louis Vuitton's VIA project links physical products to NFTs, creating a blend of tangible and digital ownership.

The future of digital fashion.

So far, we have seen brands experimenting within these three categories, either by launching separate initiatives or integrating them into a cohesive offering. Some brands have introduced standalone AR filters or virtual collections, while others have combined phygital elements with gaming and AR experiences to create multi-dimensional fashion ecosystems. Maison Martin Margiela's Meta Tabi boots, for instance, came with gaming and AR experiences, as well as a connection to an NFT, blending real-world fashion with digital assets. Tribute Brand’s PUNK collection is designed to operate seamlessly across several digital realities via a chip, as well as offering personalization, such as adding your favorite song or a personal link to your product.

For digital fashion to really take off, it's crucial digital products can be worn across many digital environments. At the moment they are not interoperable between platforms and contexts, meaning that technical requirements for digital items vary. And if you buy it on one platform, it stays there. Digital fashion standards as well as innovative technologies to ensure ownership across platforms (in the form of NFTs) will need to come into play. The newly founded Digital Fashion Designer's Council, for example, is introducing a tool to streamline efforts, facilitating seamless connectivity between different digital and physical experiences.

Another key driver for digital fashion's future success is AI. From AI-powered design tools that generate virtual garments to personalized styling experiences, AI is transforming how fashion is created, consumed, and experienced in both digital and physical worlds. For example, DRESSX Gen AI is a generative AI stylist app that instantly changes outfits in photos and creates high-quality digital looks from text prompts, offering rapid, personalized fashion creations.

With many parameters still undefined and technologies rapidly evolving, digital fashion is seen as an emerging, yet uncertain, investment. It's unclear how all these moving parts will ultimately come together. But there is no doubt we are in the early stages of a growth era—one that requires experimentation, learning, and adaptability. It's less about immediate financial returns and more about positioning your brand for the future. To stay ahead, consider integrating digital fashion into your strategy, from virtual try-ons to immersive digital experiences, ensuring relevance for the next generation of customers.