DressX Co-Founder Natalia Modenova and Magnetic Managing Director Megan Kaspar join Yahoo Finance Live to discuss how the NFT boom is entering the fashion industry.
- Welcome back to Yahoo Finance Live and. Today's crypto corner, nonfungible tokens or NFTs are continuing to explode in popularity. Sales of NFTs in fact notched a new record in the third quarter to hit more than $10 billion in total sales, that was up eightfold from the prior quarter, according to a tally from dapp radar.
Some of that might be pure speculation on random digital collectibles but some of it is coming from some big name brands working on wearable products being sold in the metaverse. The latest examples of just that are coming from the fashion world with the likes of Dolce and Gabbana, their physical crown coupled with a digital version selling for more than $1.4 million at a recent auction.
And for more on the potential upside of NFTs in the fashion space, happy to welcome back into the show Megan Kaspar, a magnetic managing director and member of the group who won that Dolce Gabbana crown. Alongside Natalia Modenova, the co-founder of DressX digital startup helping major fashion names offer a 3D wearable NFTs for customers through their app and elsewhere around the metaverse.
And guys, appreciate you coming on here to chat with us today. And when we look at this one Megan, I should kick this off with you and note that you are an investor in DressX, hence why we have you both on the show today. But talk to me about why you're so bullish on 3D fashion, wearable fashion particularly in the NFT space and the future prospects it offers in the metaverse.
MEGAN KASPAR: Well for one Zach, the fashion industry alone is $2.7 trillion and we've received that at least doubling over the next two decades because of digital fashion. Digital fashion wearables give a new utility to fashion in general and it takes fashion to a sustainability level where all the fashion that you're wearing, kind of like the earrings I have on, in the digital world are not produced physically. So it becomes a very large ESG investment.
And these NFTs, the majority of NFTs right now are all in the Ethereum ecosystem. So that's another proponent that's propelling the Ethereum market cap but we're going to see more NFTs proliferate I think just in specifically fashion. So there's 12 large categories in NFTs but fashion alone has the largest potential for disruption.
- Yeah. I mean, this is the first time we're showing NFT, thank you for supporting them on the interview today. This is the first time, certainly at Yahoo Finance I think, the first time in a few places.
And Natalia, I mean, when we look at the opportunities here, you guys are working with names that people recognize in fashion to build these things and offer amounts of the public. I mean, talk to me about the demand you're now seeing from those companies that may not be used to doing this and kind of their excitement in joining in the wave.
NATALIA MODENOVA: Oh, sure. So our goal at DressX to open up the new domain for fashion brands and to open up the new category for fashion brands, which is digital fashion. And there is a space for luxury digital fashion and mass market digital fashion.
Of course, sustainability aspect is very important for us, from day one because digital item emits on average 97% less of their carbon footprint than the physical one so we believe that in many, many use cases, it is viable and worth it to switch into wearing digital fashion. And it's also democratization of fashion but with NFTs we open up the opportunity of having a luxury category for digital.
Because with NFTs, it is unique and it is possible to open up the secondary market and resell opportunity, resell models, growing and this is something that driving the traditional market. So we know about companies like StockX, RealReal and all this model it's growing and now fashion industry recognizes that. But definitely in digital fashion, this is something that is going to be a big market as well.
There is a data that 9% of clothing is purchased for the sake of content creation. And if we turned this 9% on consumption of digital fashion, that's already a big market. And gaming industry and the rise of the culture war worlds also opened up this big opportunity.
And recently we finished the auction with Balmain where the unique fire flame dress was sold for $10,000 and only the owner of this NFT, it was only digital and only the owner of the NFT will be able to wear it in AR, in augmented reality, just the way that I am wearing this hat right now. And this is a great new universe for NFT and wearing and actually using digital assets that you are owning.
- So, what kind of price range are we talking about? I mean, I've realized that the case for digital use but at the end of the day, people also spend money to step outside their homes and use in real life. So I'm wondering who you're appealing to, how broad do you think the market is?
NATALIA MODENOVA: The market is pretty broad so because the AR technology opens up the possibility to democratize fashion, we can actually address the audience who would wear something like a mass market and would be in a like middle and lower price category also because it's just on the tips of your fingers.
And at the same time, with the possibility of implementation of NFTs, we open up this higher priced category where digital only items can be priced, hundreds, thousands of dollars.
And that's an example of what actually like Megan is wearing the crown now and this is something that is unique and it's only exists in one copy. And that's like her NFT and that's why she can wear it. That can go in the prices similar to the price of the physical item and app so there is a big opportunity.
- Yeah. And I mean, I don't know if you knew I was a sucker for Bucket hats so to bring one on here in NFT that has flowers grown out of it, I also enjoy what we're seeing here on the show today. But Megan, I mean, when we talk about the long term growth potential, obviously DressX has shown a lot of the potential here and being the first to move on this space and leader in the e-commerce digital NFT space.
When you look at the mainstream consumer, we're talking about clothes I'm wearing right now, I think, I don't know, this might be from Banana Republic, but when we're talking about the opportunities for mainstream fashion to offer some of these things, to more maybe applicable prices for mainstream purchasers of clothes, I mean, talk to me about the opportunity there. Or if you're looking at this investment space as strictly maybe on the higher end.
MEGAN KASPAR: Well, you have both. So you have platforms like DressX that can offer a wide range of items, I see DressX is sort of the net-a-porter 2.0 of the metaverse and then you'll have a whole category of a higher end luxury item similar to what we bought.
The crown from Dolce and Gabbana, like you said, was over a million dollars a few of their other items which were jackets. These are couture pieces so the industry can span from median to lower dollar apparel, all the way up to higher priced items like the Doge crown.
- And lastly, I mean, Antonio, when I think about how it all works together, it's fun to be able to wear wherever you are, and that's going to take I suppose AR technology coming along a little bit more if you want to just see it around town.
But for now you guys are using this right now on our video call so there are real and we've all been working from home. So there are real use cases right now but I mean, talk to me about working across this. I know I was just playing around with DressX, seems like it's integrated with Snapchat as well.
The technology in that, in terms of being an important piece of DressX and others are working on too. I mean, how far off is that technology from becoming something that young people might be using it now but everybody might be using it.
NATALIA MODENOVA: So I would say that AR implementation and AR use case for fashion NFTs, is something that has a biggest potential so far. At the moment just because we all have our own bodies and we don't need any kind of 3D avatars to appear on the screen, we all have some kind of device which will help us to show ourselves on the screen.
And that's why it opens up the biggest market. And the biggest opportunity and that's why we are focusing now on developing the AR fashion NFTs and launching the marketplace where all the items, all the NFTs will be wearable in AR. Of course, the other use cases will follow and they are already popping up and you can wear some of the items in the gaming environment and virtual world but it is way more limited compared to AR use case at the moment.
Of course, virtual NVR will be more widespread moving forward. But the biggest opportunity now for sure in augmented reality, that's why DressX is developing and pioneering in this direction.
- Or we're going to have to talk with my team here and figure out how I can get a flower growing bucket hat for the next time we have both of you guys on, but appreciate you coming on to chat. The opportunity is there, it's exciting times, Natalia Modeova, DressX co-founder alongside Megan Kaspar, Magnetic managing director, thanks again for chatting with us.