Welcome to the Glossy+ Research Briefing, your weekly curation of fashion and beauty research insights. Glossy+ members have full access to the research below.
In this edition, we share focal points from Glossy’s emerging technologies series highlighting marketers’ use of blockchain and augmented reality.
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Retailers take an experiential approach driven by technology to reach consumers
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Many retailers are facing challenging macroeconomic conditions, including labor strikes and consumer slowdowns in North America from rising inflation. Fast-fashion retailer H&M reported flat sales growth in yesterday’s earnings report. Even Zara, which is considered more upmarket than H&M, is halting price increases at the moment.
On the other hand, analysts remain confident in Nike’s ability to recover in the long-term even with flat sales growth in the first quarter ahead of today’s earnings report. The company has had record-breaking performances in China this year, including becoming the No.1 selling sports brand on Tmall, Alibaba’s China e-commerce service.
Nike has seen success in China by focusing on innovation and brand storytelling. For example, Nike China ran a Chinese New Years ad this year that used deep fake technology to depict the country’s best-known athletes as their younger selves. Many other retailers are also taking an experiential approach driven by technology to reach consumers, in particular younger shoppers within Gen Z. That includes beauty retailer Sephora, which announced the return of its largest beauty event of the year, “Sephoria”.
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This year, Sephoria will offer both in-person and virtual events and will incorporate virtual reality and blockchain technology. Virtual attendees will be able to create their own avatars to socialize online, chat live with Sephora Beauty Advisors and play games to earn rewards points. Attendees can also redeem a free NFT POAP (Proof of Attendance Protocol) that can be added to cryptocurrency wallets.
Glossy+ Research surveyed industry professionals at agencies, brands, retailers and publishers to uncover how they’re currently using blockchain technologies, like NFTs and cryptocurrency, and uncovered that the most common reason industry professionals use blockchain technology is for NFTs — 64% of respondents.
Similar to Sephora’s approach with its Sephoria event, the majority of respondents (81%) said they use NFTs for brand awareness, while more than half (64%) use NFTs as a new revenue stream. Companies hope NFTs will increase brand recognition and thereby drive revenue, but they tend to be employed as a short-term strategy to generate immediate public awareness rather than as a long-term technology strategy. The Sephoria beauty event is positioned to attract new customers and hopefully encourage long-term loyalty.
A downside of using NFTs to create immediate buzz and awareness around a brand is that companies struggle to maintain ongoing consumer interest. The Sephoria event aims to keep attendees engaged with the combination of in-person and virtual events, as well as take-home goodies and virtual tokens.
Key findings:
- The most common use of blockchain technology is for NFTs, according to 64% of respondents. NFTs have risen to the top of the list of potential applications because companies can readily market and sell NFTs to consumers as digital art pieces or collectible items, foregrounding the aspect most understandable to consumers.
- Companies mainly use NFTs with the goal of generating brand awareness. NFT drops can be a quick way for larger companies with research and development dollars to spend to create attention-grabbing headlines and potentially generate new revenue in the process.
READ MORE ABOUT HOW MARKETERS ARE USING BLOCKCHAIN
More fashion brands bet on AR as they incorporate digital fashion
Digital fashion brand and studio The Fabricant is showcasing AI-powered couture fashion with its latest launch on the web3 platform Cornerstone. The brand is introducing its “Primal Rave” collection and a corresponding virtual reality experience called “Wholeland.” The moves are part of the company’s focus on making profitable and innovative digital fashion.
During today’s Cornerstone experience, attendees can interact within the digital environment and purchase the clothes. Each purchase comes with 3D files and an immersive, Instagrammable augmented reality (AR) experience featuring the garment. The garments can be worn on Ready Player Me avatars, which are compatible with over 9,000 games and digital experiences.
The Fabricant’s use of Instagrammable AR is a strategic move by the brand. According to Glossy+ Research, Meta-owned platforms currently dominate the AR landscape. Meta’s Instagram is the leading AR host platform with 64% of survey respondents who use AR saying they produce AR content for Instagram. Snapchat, which previously held the first-place spot among third-party platforms (and was second overall), fell to fifth overall, with 30% of marketers using the platform.
When Glossy first surveyed marketers in 2017, marketers showed less interest in using AR then than they did in 2022. Thirty-eight percent of marketer respondents said they were using AR in 2022, up 15 percentage points from 23% in 2017. Among marketers who were using AR six years ago, marketers were “employing AR [both] for entertainment (39%) and as an information resource (36%), in almost equal parts.” It was anticipated that, as the technology matured and made its way into more everyday devices (for example, smart lenses), using AR as an information source would take the lead over entertainment purposes.
However, that wasn’t the case for marketers using AR as an information resource. In 2022, the top reason marketers use AR remains entertainment. Social media/camera filters took the No. 1 spot, with 74% of marketer respondents who use the technology saying they use AR for those reasons. That indicates that AR is still used primarily as a marketing tool to create buzz rather than to push consumers to purchase or provide utility.
Key findings:
- The AR landscape is currently dominated by Meta. Meta’s Instagram is the leading AR host platform with 64% of survey respondents who use AR saying they produce AR content for Instagram.
- The top reason marketers use AR remains entertainment. Social media/camera filters took the No. 1 spot, with 74% of marketer respondents who use the technology saying they use AR for those reasons.
READ MORE ON HOW MARKETERS ARE USING AR
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