Sufficiency and the dematerialization of fashion: How digital substitutes are creating new market opportunities

Abstract

The global fashion industry is a trillion US dollar market and one of the most wasteful industries in the world. Digital fashion has the potential to decouple some crucial aspects of the fashion industry from their material requirements. Combined with the growing interest around the metaverse, non-fungible tokens, the rapid evolution of AR and VR technology, and the growing presence of major fashion brands in gaming, an understanding of the commercial feasibility of digital fashion is becoming increasingly relevant. In this article, we explore the commercial feasibility of digital fashion and expose a strategically significant alignment of digital substitutes with four emerging consumer expectations, i.e., excitement, utility, relatability, and circularity. Our research shows that these expectations are contingent on consumers’ increasingly sufficiency-oriented mindset and the modes of consumption this mindset generates. By developing what we call a ‘sufficiency-model’, this article provides companies with the heuristic tools necessary to gain future-looking and practical insight that helps them navigate this dematerialization of consumption and to identify long-term market opportunities within this area. Specifically, we offer eight implications that are designed to help companies take their first steps into this emerging space.