Fashion Finally Has the Upper Hand with Mark Zuckerberg

Zuckerberg needs the fashion industry to realize his metaverse dreams. Yet his work on wearable tech so far doesn’t exactly inspire confidence.

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Well LOL you guys – Mark Zuckerberg finally changed from his crappy hoodie into something more billionaire-like – a Thom Browne suit! Get that Met Gala invite, Zuck!

Only, he isn’t flashing his actual ankles in paparazzi photos in St. Tropez (he sadly doesn’t appear to have attended Ari Emmanuel’s wedding, according to Vogue’s truly extensive reportage) or at a red carpet at, say, this week’s NFT NYC conference. And in fact, he isn’t wearing Thom Browne at all – his avatar is. And he’s only advertising his virtual #ootds with the hope of extracting more money from the public when Meta’s avatar store launches this week.

Featuring looks by Browne, Prada, and Balenciaga – prices to be announced – users can buy clothes from the virtual store in Facebook, Instagram, and Messenger to style their avatars. In a statement, Zuckerberg said, “Digital goods will be an important way to express yourself in the metaverse and a big driver of the creative economy. I’m excited to add more brands and bring this to VR soon too.”

We could do worse than turn to another billionaire, Bernard Arnault, who runs LVMH, for some thoughts. “At this stage, we are very much in the real world, selling real products,” he said in January during an earnings call. “We are not interested in selling virtual sneakers for 10 euros. We’re not into that.” However, he left the door open, adding, “There may be relevant applications, but we have to see what universes might actually be profitable.”

After all, virtual fashion checks some appealing boxes: it’s actually sustainable, it’s high margin since it costs almost nothing to produce, and it probably sounds to a lot of older executives like the type of thing that will appeal to people much younger than Mark Zuckerberg.

One doesn’t have to be a fan of Arnault to find his ability to put some distance between his vast portfolio of brands – everything from Louis Vuitton to Benefit Cosmetics – and Zuckerberg’s misery-inducing monopolistic assortment of social media and communication tools refreshing. And he might actually be onto something, at least when it comes to Meta’s plans for a virtual world, since Zuckerberg’s track record so far doesn’t exactly inspire confidence in his ability to bring the metaverse and the fashion world that could exist within it to the masses.

Earlier in Back Row: Fashion’s Instagram Exodus Begins

First, let’s remember that Zuckerberg has had one good idea, which was the original Facebook – a social network that allowed people to connect with one another online, share updates, and ultimately aggregate those updates into a newsfeed. Since then, Meta has grown by acquiring and copying competitors. It snatched up popular apps like Instagram and WhatsApp. When buying Snapchat failed, Meta copied its features like Stories and cutesy face filters on Instagram, now more of a dumping ground for products and functionality knocked off from other apps than a fun time-waste. The avatars Meta will soon dress in designer clothes launched four years after Snap acquired Bitmoji in effort to compete, and allowed users to customize hair, piercings, complexions, clothing, etc. The company was too big to acquire TikTok once that became a threat, so it attempted to copy its video format with Instagram Reels. However, the content stream on Instagram was so different that it had no chance of getting videos to take off — the same reason IGTV could never compete with YouTube. Instagram had to insist that users make them by suppressing other content.

Meta’s insistence that Instagram users work to turn the app into another TikTok is perfectly in line with the company’s spirit of expecting its community to do its bidding on command in order to juice Facebook’s profits and cement its dominance. Meta’s platforms have for years existed in a hideous pay-to-play landscape where users and small businesses, including fashion brands, must pay for their posts to get seen and their followings to grow. This marketing is, for many businesses – including fashion’s solopreneur influencers – essential. Facebook made it easy for any user to pay for increased exposure to an audience it could target better than anyone else. This basically killed the old business model of traditional publishers like Vogue parent company Condé Nast, whose CEO recently went on Kara Swisher’s Sway podcast to proclaim it’s “no longer a magazine company.”

This ad model worked in a world where Apple wasn’t asking users if they wanted to opt out of being tracked by apps like Facebook. But now, Apple devices allow users to opt out of being tracked, and Android has plans to do the same. Many would argue this is a good thing, because all the tracking we’re subjected to online is disturbing.

While Facebook was trying to get us to pay for exposure instead of serving it up for free, TikTok’s popularity exploded, probably because it’s a more fun time-waste than any Meta platform. Also, on TikTok, engagement and followers come easy, which makes users feel better than being on Instagram or Facebook, wondering what the hell is wrong with them that they reach a fraction of the followers that they used to.

The advertising problem and the TikTok problem conspired to result in a dramatic bursting of Facebook’s bubble when its earnings report came out in February showing an 8 percent profit decline from a year earlier. This was followed by another quarterly report in April showing a 21 percent decline from the previous year. These subsequent profit declines were the company’s first in more than ten years. The other problem was the company’s commitment to the metaverse – a staggering $10 billion expense in 2021. The metaverse might be the future of the internet, sure, but it isn’t used by most people today and has no imminent path to becoming mainstream.

Getting back to fashion: Facebook has yet to enter the device market in a meaningful way, but needs to in order to come between Apple and its users who are turning off tracking. Fashion could be crucial way for Facebook to do that, since it has decided that wearable technology is a necessary gateway to the metaverse. However, the average person isn’t going to wear a dorky headset that pairs with robot gloves and feels cumbersome and complicated. They’re going to want things that are similar to what we already wear, like glasses. This is why we’ve already seen smart glasses from Google, Snap, and Meta. Last year, Meta collaborated with Ray-Ban on a pair of smart glasses that look almost indistinguishable from regular Ray-Bans, but allow wearers to record video, among other features.

All you have to do is watch the sizzle reel at the beginning of this 10-minute YouTube video by “Ray-Ban Films” to see that these Ray-Ban Stories are a ploy to tap into Gen Z and harvest some of their delicious young-person data.

Many reviewers called the glasses creepy – and they are. While it’s easier to take video with these glasses without taking out a phone, this is exactly the problem – when you take out a phone to record something, people around you at least know you’re doing it. The $299 glasses allow people to record social interactions secretly, especially since they look so much like regular Ray-Bans.

Though these glasses check a major wearable tech box of not being hideous, the rollout was sloppy. Many Facebook users have never even heard of the glasses. Also, the product was never set up for mass adoption. Otherwise, it might have been able to integrate corrective lenses, but this isn’t the case, as CNET’s Scott Stein reported in December:

At Lenscrafters, they wouldn't install the special prescription lenses I had made for the glasses. According to a shop employee, they couldn't service the glasses. There was even an internal memo about it. The glasses needed to be made to order with the prescription lenses preinstalled, at least according to everyone I asked about it. 

This underlines a big problem with smart glasses, still, at the end of 2021: These things are not ready to be your everyday prescription glasses yet, much less be doorways to the metaverse.

Nonetheless, Ray-Ban parent company EssilorLuxottica did a bit of bragging about the collaboration in its March report, the crux of it being (as translated from French), “The partnership with Meta (formerly Facebook) and the launch of Ray-Ban Stories have also enabled the Group to be more visible to younger generations.” So, who cares how many people buy these, as long as they make the brand seem hip? After all, the company sells plenty of other popular high-margin analog products – glasses by Prada, Michael Kors, and Valentino, to name just a few. This wasn’t a make or break product for them.

The launch was surely a much bigger deal for Zuckerberg, who has been hyping the EssilorLuxottica partnership. On May 4, he Instagrammed a photo of himself with CEO Leonardo Del Vecchio in Milan. You know, the city where all the fashion people go!

zuck

A post shared by Mark Zuckerberg (@zuck)

The caption reads, “Here Leonardo is using a prototype of our neural interface EMG wristband that will eventually let you control your glasses and other devices.” See, Facebook thinks that users should control VR glasses with a separate device, like a watch. After all, the Apple Watch is probably the biggest success in wearable technology since it came out in 2014. What could go wrong?

Well, a lot, as Meta now knows. On June 9, two damaging pieces of news broke on its wearable tech. Bloomberg reported that the company was canceling the inaugural version of the smartwatch, apparently code-named “Milan,” after it had been in development for two years. Various elements of the design weren’t working well, like the battery, which wasn’t holding charge for a day, a source told The Information. The watch was supposed to be released in the spring of next year and cost around $349. (The company is, reports Bloomberg, “working on other devices for the wrist.”) The other bad piece of news, from The Information, was that Meta was canceling its first edition of AR glasses (with another cutesy name, “Project Nazare”), originally intended to launch in 2024:

Meta now plans to prioritize what was going to be the second version of the glasses, internally codenamed Artemis. The shift means Meta is unlikely to release a version of the glasses for several years.

And June 17, eight days after these embarrassing stories broke, Meta announced that Prada, Thom Browne, and Balenciaga would sell avatar clothes. Eva Chen, the vice president of fashion partnerships for Instagram, did an Instagram Live with Zuckerberg to announce the avatar store. In promotional images, her avatar appears alongside Zuckerberg’s wearing the new items. Through Chen, Meta has been able to use Instagram to cultivate relationships with the fashion industry. Chen came up at Condé Nast under Anna Wintour, who made her editor-in-chief of Lucky, and now serves as a judge for the CFDA/Vogue Fashion Fund. Instagram has sponsored the last two Met Galas.

However, there is an important altered power dynamic with Zuckerberg’s metaverse that the fashion industry could exploit. Today, Facebook seems to believe that it really needs the fashion industry for its next phase of dominance. And the idealist in me wishes the industry would just opt out – that it would resist the temptation to build its house on somebody else’s lawn, the way the publishing industry did to effect so disastrous that Condé Nast’s CEO is now advertising it as “no longer a magazine company.” Living and dying by Meta’s algorithms has been a soul-crushing reality for too many businesses and people.

There’s not yet strong evidence that the world’s biggest and most recognizable fashion brands are banking on the metaverse like Zuckerberg. For instance, Gucci, which is owned by Kering, recently announced plans to increase revenue from 9.73 billion Euros to 15 billion Euros, but not through selling virtual dresses. Business of Fashion reported they plan to do more mundane things like raise prices and offer a more extensive assortment of products like “precious leathers” at the highest end of the price spectrum. (A number of other brands are seeing success with price increases, such as Chanel, which increased the prices of some handbags by more than 50 percent since last year, along with Louis Vuitton, Rolex, and Cartier.)

Visions of a realized metaverse are much creepier than Ray-Ban Stories. Take ads. “In the real world they’re in squares, they’re in rectangles, you can choose to ignore them. That’s not true in a metaverse. The ad is that person across the street, who isn’t necessarily a real person; they’re an ad,” Philip Rosedale, founder of Linden Lab, which built Second Life, the “original metaverse,” told the Wall Street Journal. But the fashion industry, like most others, has never been terribly moralistic. Ultimately, it’s going to do whatever enables it to make the most possible money.

Zuckerberg might not be the guy who figures out the metaverse, and his shop full of virtual Thom Browne suits could be a complete failure. But as with the beginning of Facebook, dabbling in this new world is cheap and easy enough for fashion brands. Unlike the beginning of Facebook, the industry has long been playing in Meta’s sandbox, so it’s more comfortable go along with the company’s ambitions in the near term than it was a decade ago.

But one of fashion’s great strengths is that it’s quick to move on when the time is right. After all, starting trends and shifting culture is what the industry does best of all.

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