Christina Binkley  

This is Hot Buttons, a show about the future of fashion and culture on a changing planet. I’m Christina Binkley. I’m a contributing writer at Vogue Business and the Wall Street Journal. This week, we are back in the metaverse, and Natalia Modenova of DressX is our guide. Since launching in 2019, DressX has been building a multi-brand retail model around digital fashion, and we had to have them on. We’ll talk sustainability, collaborations, digital design, and how the market for Web3 fashion may evolve in spite of all the headwinds facing crypto today. Rachel Kibbe of Circular Services Group is in New York. Rachel, how’s it going?

Rachel Kibbe  01:21

It’s going great, Christina. How are you?

Christina Binkley  01:23

I’m good! And the CEO of Thrilling, Shilla Kim-Parker, is back. Welcome! And she joins us from the basement, as usual. 

Shilla Kim-Parker  01:30

As usual, nothing changes 🙂

Christina Binkley  01:33

Okay, guys, before we get into this, I just want to have a brief discussion about Balenciaga. We had a big discussion about Balenciaga last week, and some things have evolved since then. Demna. He apologized. Personally. I think last time I looked on his Instagram, he apologized like, three times. He keeps trying to get it right. They did– 

Rachel Kibbe  01:54

And it’s his only post on his Instagram. Everything else either was taken down or there was nothing there before.

Christina Binkley  02:00

It’s just like, “I… AM… SORRY.”

Rachel Kibbe  02:05

How do you like my sorry now?

Christina Binkley  02:07

Is this one better? But you know, here’s the thing: the brand also issued a pretty– the CEO– issued… again, he has also issued several apologies. One kind of explained what they’re doing, and a lot of it sounded good. Like, they’re gonna go on a listening tour, and talk to advocacy groups for against child abuse. But there’s a line in there that said that they restructured their image group, and I thought, oh, no, they fired some poor middle management guy who had no real control over what that campaign was, which was toddlers playing with toys in bondage gear.

Rachel Kibbe  02:44

At least they dropped the lawsuit, right?

Christina Binkley  02:46

Yeah, that’s good. 

Shilla Kim-Parker  02:48

So trying to do everything, basically, to save Demna is what it sounds like. 

Rachel Kibbe  02:51

Yeah, I would agree with you, Shilla. It’s like, it’s trying. It’s just seeing how much they can sort of appease people without doing that.

Shilla Kim-Parker  03:03

The social chatter is about going through the history of  Balenciaga, and how far they’ve gone. And I just think, this is exactly not where you want to be as a brand. People talking about how off track you are, and how much you are disrespecting its heritage… I don’t see how you survive.

Rachel Kibbe  03:18

It was funny, I had a friend come up to me who loves Balenciaga, and he was saying, “What do I do? Do I like, get rid of all my stuff? I feel like I’m having an identity crisis, because it’s very much my personal style. It’s not just about Demna. It’s just, I really love the brand.” And from an environmental perspective, I was like, “No, don’t get rid of it all. The brand is going to recover, I just don’t know if Demna will.”

Christina Binkley  03:39

Yeah, I mean, he’s shown incredibly bad judgment. Right?

Shilla Kim-Parker  03:42

I just– I want to understand better, what was the thought process? Like, clearly it was intentional. I just want to understand why, and what happened, like, how did this happen? I feel like that is what I want to understand better. I don’t know if we’ll ever– I don’t think we’ll ever get that.

Rachel Kibbe  03:58

I’m saying he won’t survive. While I do think this is a pattern and it’s the brand’s fault, and it’s probably the team’s fault. Like, is it really his fault? I don’t know. You know, I know he probably has the ultimate say in these sorts of decisions, but what truly went on we’ll never know, to your point.

Christina Binkley  04:15

Well, we do know that he – because he has been a god in fashion for quite a few years now, and he is the creative director who is responsible for the brand’s creative decisions – we absolutely know who was responsible for this. I mean, even if somebody else said, “Why don’t we try posing these little toys with young children?” He decided to do that. He’s the decider. 

Rachel Kibbe  04:38

That’s what comes with the title, anyway.

Christina Binkley  04:40

So Ralph Rucci is probably, if not America’s greatest criteria, certainly one of them, and he has a very small clientele these days. He doesn’t show anymore, but he has a very loyal clientele. And he was an assistant to Cristobal Balenciaga back in the day, and he got so angry last week about this. He posted– he actually slid into Demna’s DM’s and posted– and then took a photograph of that and posted it on his own Instagram. He says, “I am sending you this message as a DM since your public forum has been closed to save you much, much embarrassment. My name is Ralph Rucci and I have worked with deep devotion within the metier of couture for the past 42 years. My most significant mentor has been Monsieur Cristobal Balenciaga. I have stood by for years now and witnessed your disparaging behavior, remarks, and complete lack of acumen for this legacy. I am qualified to tell you, sir, that you are utterly unqualified to be the director of this house.” 

Shilla Kim-Parker  05:42

Oh, damn.

Christina Binkley  05:44

He ends it. He goes, “sneakers!”

Rachel Kibbe  05:45

SO, so, sneakers– How else has he really disrespected the house? Oh, sneakers? Okay, okay. All right.

Christina Binkley  05:58

Okay, let’s bring on Natalia. If you’ve followed digital fashion at all lately, you’ve definitely heard of DressX. Since 2019, they’ve been in every conversation about what fashion in the metaverse could be. They’ve created a retail ecosystem for digital fashion that works as well as any ecommerce platform. And they’ve partnered with brands, designers, influencers and bloggers to bring digital fashion to the masses. And for those of you who may be scratching your heads wondering what digital fashion is, I should explain that it’s clothing that you can wear online. You can buy an outfit and wear it and your Instagram posts, or on Roblox, or on your gaming avatars, or in your zoom calls. But it has never actually made IRL. It’s just purely living in the digital universe. Welcome, Natalia Modenova. And congratulations, by the way, on being named to the inaugural Vogue Business 100 Innovators list that came out this week.

Natalia Modenova  06:49

Thank you. Thank you, Christina. So good to see you, to hear you again, and to meet in the capacity when it’s not just fashion, but also tech and digital fashion. And indeed, we believe that digital fashion is a future. And it’s so exciting to build it, because lately all the innovations happened in the intersection of different industries. And being in a traditional fashion industry, and running a wholesale business, and also the Fashion Week, we saw this development, and actually, everything exciting and impactful and scalable that happened and shaped and changed the fashion industry in a significant way happened with intersections of technology. So that was definitely something that was exciting for us, for both of us, with Daria, because we co-founded DressX with Daria Shapovalova. And we did a lot of other things before together, basically, both the showroom and the Fashion Week. And really, now it’s, like, building this future that we believe will be coming. And we honestly believe in this scale of digital fashion, which is already kind of happening in, I would say, just the virtual apparel industries, maybe not necessarily virtual fashion, because brands are a significant part of it. Because gaming has been selling skins for years and years. I also met the founder of this game, like a social game– Second Life– at the economist conference. We were actually speaking at the same panel, and he was sharing numbers about GDP, in particular in Second Life, but it’s, like, millions of dollars, and most of it is outfits. That’s how people present themselves online. So definitely, this is already happening. And when we started, we approached brands, of course, and we approached individual creators as well. And for brands, it was like a story to hear and maybe scratch the head a little bit and come back to it later and see who will go first and what are the other cases. But the power of the creatives and talented people who want to kind of invent something new is actually moving the needle and moving this whole industry. 

Christina Binkley  09:26

You know, I have to say that I think it was–- for me personally, Zoom is what made me start to be able to understand this. And, full disclosure, you and I have met before. I’ve known Daria, your co-founder of DressX, since she was a Ukrainian television announcer, you know, a million years ago. And you guys had… I think I was at one of those 2019 pop-ups that you guys did. You had me come out and sit on a panel, I remember, in Santa Monica or someplace, and I had no clue what the hell you guys were doing. Just like– they’re doing something, and they think there’s such a thing as digital fashion. Okay! I get it now. I get it. I’m looking at you, and you’re wearing digital fashion on our Zoom call, but I have a gazillion questions about where it’s going. And, for instance, you’ve got Adidas on DressX right now. You’ve done a collab with them. And when I saw that, I thought, well, what’s to stop Adidas from just doing it themselves without DressX and sort of putting digital fashion on their own website, and cutting out DressX in the same way that brands cut out department stores over the past 15 years and opened their own retail? Can we start there?

Natalia Modenova  10:38

Starting from tough questions, but of course, happy to cover. When we started DressX, we understood and we were sure that every brand will have this line of digital fashion, this category of digital fashion, and it applies for all the brands; mass market brands, luxury brands, all of them. Just, like, for example, sneakers became a category that, like… brands like Chanel and Gucci started doing sneakers. It was not the case 30 years ago, right? And significant revenue comes from that. That’s the business point of it. Same situation with beauty products– when the number of people who can buy Chanel bags, this total addressable market, is X, but so many more people can afford the Chanel lipstick, for example. So the total addressable market for Chanel lipstick is way higher than the market for the bags, right? And we believe that digital fashion is that next category that will help brands to build new relationships with customers and approach new audiences that will make the fashion industry more inclusive. 

Christina Binkley  11:59

How is it more inclusive, because you can do digital fashion in any size and shape you mean?

Natalia Modenova  12:03

Any size and shape, any geography, you don’t have to wait for delivery. It’s… yes, size and shape, that’s for sure something that is an issue in a traditional fashion industry. Because if you want to wear, like, a dress from the runway, sometimes it’s super hard to find the right size in the stores because it goes… I’ve been in the wholesale business, I know this, like, formula. One, two, two, one. When smaller stores sometimes would place an order immediately, in the showroom, and they would just say, like, okay, one this SKU in sizes, right? And sizes go like, extra small, small, medium, large. It can be, like, extra large, and others, and, like, extra smalls, but usually it goes from, like, extra small to large. And they say “one two two one.” It means one extra small, two small, two medium, one large. And the same statistic is for the large stores as well. The ones who are placing, like, big orders. But still, it’s, like, the same curve. 

Christina Binkley  13:14

Same size range. 

Natalia Modenova  13:16

Exactly. So, in digital, it doesn’t matter. And also, today you’re one size, tomorrow you’re a different size. Still, you can wear digital fashion. It would fit everyone. And another thing: it is definitely a creative tool. Because look what Instagram did to fashion. Everyone became a content creator. An online persona is so much more important than the physical persona, and how much content, especially people from the fashion industry, should be creating. And that’s also not super sustainable, because, again, we worked a lot with influencers. And sometimes they were like, well, I cannot even scope time to unbox everything that I receive, because I have a brand partnership, but then a lot of brands just send me it as a gift hoping that I will wear it. But I cannot have so many events to go to, to change so many times, and a lot of clothing just stays there. But it’s like, deliveries and things like that. So sustainability actually has been a super important pillar for us from day one. And we actually couldn’t find the proper data on how much more sustainable digital fashion is compared to the physical. And we started our own research, and now we patented the methodology of calculating environmental impact of digital fashion compared to physical. 

Christina Binkley  14:49

I’d like to know some of the elements, too, that you’re measuring. I guess its electricity use for digital fashion, and then…

Natalia Modenova  14:56

Absolutely. So what we compare mostly is the usage of water and the carbon emissions. So for usage of water, we can say that it’s, like, really zero. And for carbon emissions, it’s significantly lower. On average, a digital fashion item emits 97% less co2 compared to the physical. And again, it’s an average. We can go into, like, digital couture and compare a super complicated, beautiful dress, and the rendering time for it will take longer and the computing power will be significantly higher and compare it to the tee shirt, then the ratio will change. But still, on average, it’s a fair number. And it’s been verified with the Ellen MacArthur Foundation and United Nations Environmental Impact department also reviewed that, and we work with most of the stakeholders related to it, but we continue this research because more and more technologists emerge. Like, for example, there was a boom of blockchain. And there was a lot of conversation– is it sustainable or not sustainable how  do an NFT? It’s so bad for the environment. But really, it’s important, there are different improvements, even in a blockchain technology, like moving from the proof of work to proof of stake protocols, it’s, like, very technical terms. But still, this is something that the industry cares about. And we definitely follow all of this and implement all the innovations as well. But getting back to the Adidas question, actually. Why are they not doing it on their own? Because it’s a very early stage, in the early, kind of, emerging industry. However, I have to say, Adidas very much advanced in the whole 3D processes, in the whole 3D developments, because… a lot of the brands, actually, like PVH group is super, also advanced in it, they have a huge library of 3D assets, but it’s helping the production of physical items. So the whole 3D technology in the fashion industry has been used only to reduce the number of samples and streamline the process of creation of the prototypes, a little bit in wholesale, but not significantly. And now, we understand and come up with this concept that it doesn’t have to be only backstage, all this 3D world, because this content is actually available already, without any physical aspect. Because when we communicate online, we communicate so much more. And when we wear something, we use this as a language to tell a story about ourselves.

Christina Binkley  17:56

But how does that stop Adidas from just saying, “Oh, DressX has a good idea, and we can just do that on our own, and we’re just going to have a tab on our website that’s 3D clothes you can buy.”

Natalia Modenova  18:07

Well, they actually do. They did an NFT drop, and they sold a collection of certain outfits as NFT’s. But then, what are you going to do with those NFT’s? We provide the utility. We provide the wearable aspect to it. And this is actually how DressX started, and this is what is unique about DressX. I remember the very beginning, when, actually, there was an inspiring example of the fabricant happening, and they sold the dress– digital dress– and they created the collection, but it was available for free to download the 3D files. And I would go and download, and you cannot do anything about it. If you’re not a 3D designer, you have to learn the software. You have to buy a license for the software. Like, you have to spend a significant number of hours putting it on yourself. So that’s definitely not something that the majority of people would do and would enjoy. But they would definitely enjoy this image of themselves wearing something fun and cool and different. And actually, this whole Adidas thing was presented at the event here in Miami, which was dedicated to this new collection. And there were several activations. It was, like, huge screens with this jacket, with these puffers and with a beautiful animation of how it’s created. And that’s fun, but there was a huge line to get to this dressing room to try this experience on. That’s exactly what fashion is about. You can actually wear it. It’s not just to collect it, but it’s to apply it on yourself, to make it personal. So that’s what you’ve brought. That’s what DressX is bringing to the table. Let me ask you this, then: do you foresee a time– and I’d be curious to hear you put a timeframe on it– when most fashion brands will also offer digital clothes? Yes. I believe it will happen very soon, because we see it happening already. There is a Gucci collection in Roblox or, like, a Marine Serre collection in Zepeto. We see a Balenciaga collection in Meta along with Prada, and DressX was the next brand to join this list and now dominate in this avatar store with a significant number of items. It’s already happening, it just doesn’t come as one solution for every brand. This is a really interesting time– how brands are finding their ways in this digital space, and finding the way to translate their aesthetics into this digital realm and digital reality. And this is where DressX comes into the place, and having experience in the fashion industry and understanding how important certain aspects for the creative directors are, and how it can be translated into the digital format, and understanding the tech part of it, because there are no, kind of… on the first side there are no limitations, you can wear anything in digital, but then there is the hardware limitations, there is the software limitations, there is the data limitations. Like, okay, you cannot do 100% real render on your phone. Maybe because your phone is amazing, but the connection is not enough. Or you have a 5g but the device doesn’t have enough GPU power. So all these things are happening as well, where you can make an amazing outfit, but, like, it should have a certain number of polygons. So, it’s like, a lot of this technical aspect, which, kind of on a consumer level, or on a purely creative level, is not happening, but that’s exactly why the creative technologists profession emerged. And, like, DressX is this, kind of, platform with expertise in both combining this to make it a usable product for the customers in the end. 

Rachel Kibbe  22:28

Do you believe that people are going to be as loyal to brands in the metaverse as they are in real life? And the reason I ask that question is because it seems like it’s so expensive, and there’s so many resources you need to launch a collection, where creators ostensibly can just have software to design clothes in the metaverse for people. And when I was playing around in your app, I felt much less… I wasn’t looking at the brands, I was just looking at how interesting the designs were to me. So, it could be made by someone down the street, or it could be made by Prada. I didn’t care. I just wanted to try it on and see if it looks cool. So that makes me wonder, how important is brand going to be in digital fashion? 

Natalia Modenova  23:17

That’s a great question. Of course brands will still play a role, and, even now, at, like, Art Basel, you go and see these artworks and there are several art pieces where it was, like, brands featured. And there was a Gucci and Louis Vuitton. It was not some super cool new brand like Jacquemus or whoever, right? It was, like, brands that people understand: this is fashion. When I say people, I mean the majority of people on the planet Earth, if you ask what is the fashion brands. So, this will not go away anywhere. This new dialogue is the metaverse, because this is the place where you can launch a brand, you can have a relationship with your audience, with your community, build your community, and supply them with amazing digital outfits that are unique, that are amazing. And actually, that’s another great reason why we started DressX, and we opened it up from the very beginning to all kinds of 3D designers who wanted to start their own brand, because we’ve been working with talents a lot and we know it costs like tens of thousands of dollars to launch your brand. And then, it doesn’t mean it takes off. But here, it’s really a place where a lot of talented people can find themselves, can build a business based on that, can find their voice in all this noisy space. And the first six designers who joined DressX two years ago, some of them were just students who couldn’t launch the physical brand tomorrow, but they were creating, and it was great. And they’re all adopters.

Rachel Kibbe  25:11

What Tik Tok and social media did for creators– you don’t have to have a news station, and you don’t have to be an actor to become an influencer and famous now. So you’re providing this platform for creators to have access to an audience, at a lower, sort of, entry point, lower cost, and it could potentially democratize this type of art. I did want to sort of drill down on the sustainability piece. I noticed that on your site, you said, “Don’t shop less, shop digital fashion.” And, you know, I love that. It’s very catchy, it’s a great tagline. You also have stated in some of your articles that your goal is to sell 1 billion digital fashion items to replace 1% of physical. And you said– you’ve been quoted, you and your co-founder talking about, sort of, your mission as democratizing fashion and getting instant verification from followers. So, all of this is interesting to me because the concept of selling more at a lower price point, democratizing fashion, that sounds a lot like how fast fashion was described, and what brought people to fast fashion because they felt like it was more accessible, that fashion was more accessible. Now, what you’re saying is that this is digital, it’s lower environmental impact, your goal is to replace physical goods and replace those habits of purchasing physical goods with digital. But it brings me to the question: can we really afford to keep encouraging people and validating consumption? You’re wearing a bucket hat that is beautiful, and it gets me really excited. I want all of them, but it’s changing colors and shapes. And it just makes me think that maybe… is there any psychology-based evidence that encouraging digital consumption is going to actually replace this addiction we have to physical goods? And I know that’s a tough question to ask, and I’m asking you to sort of predict the future. But I’d love to hear you talk more about that.

Natalia Modenova  27:16

It’s a great question. And actually, it’s related to the previous one that you were asking, about the creators and the role of the individual creators and brands. So, first of all, there is room for everyone. Second of all, we say, “Don’t shop less, shop digital” not to replace all of the physical consumption. We are pro-physical consumption, however, it should be done smart. Because there are statistics from Barclays banks, and actually, it’s quite an old statistical ratio. However, they found out that, in the United Kingdom, 9% of fashion purchases happen for the sake of taking the picture for the content creation. It’s 9%. And it’s a great goal, to replace this 9% with digital. That will be, already, a huge impact. And that’s how we look at this point. However, it gets into a question, of course, we are asking ourselves, and it’s a part of our research about the displacement rate of digital and physical fashion. And we keep monitoring that. 

Rachel Kibbe  28:33

How do you monitor that? How do you monitor, “They bought this, not that.”

Natalia Modenova  28:38

We just, like, have focus groups, and we ask them a bunch of questions related to their purchases. So we asked people who are buying digital fashion on a regular basis, we are asking people who bought digital fashion once. It’s kind of their opinion, of course, it can be biased at some point. But still, it’s kind of the most evident data that is out there in the market. And actually, now, a lot of companies are just coming to us asking for the data, asking all these questions, because this is a very new industry, and nobody knows the answers. That’s why we are drilling and asking and finding those answers, just like we did for the sustainability aspect, and find out, is it really, like– how much of co2 it is polluting, and we calculate it and we monitor it for now. So I can say– I can give you some numbers. 77% ready to pay more for sustainable fashion. Of course, that 61% is a level of acceptance for digital garments in social media, or to replace some real items, according to the participants of course. 11.5% responded that they shopped for clothes to make a post on social media. So, of course, we are targeting these people who care about their online persona, and curate their image with physical fashion for their online persona. But we give them a new tool, which is more sustainable, which is more affordable, which is more inclusive, and which is more scalable. 

Christina Binkley  30:28

I’d love to hear a little bit more about your origin story, how this got started. And could you tell us a little bit about how you’re funded– if it’s VC funding– and how you make your money?

Shilla Kim-Parker  30:38

I think it would be really great for folks who are not familiar with DressX, like, even just taking them through, what is the purchasing journey like? And how does the checkout process work? Because that’s unusual.

Natalia Modenova  30:48

So let me start with what DressX is. DressX is your meta closet. Meta closet is a wardrobe of digital-only items that can be worn across different digital spaces. Metaverse is such a hyped-up word now. But yes, it’s to wear it in the metaverse. However, what does it mean step by step? We started from the first use case of letting people dress up in digital fashion on the photos. For posting it on social media, on Instagram, was the very first use case, and it was very popular on Tik Tok as well. And that’s all the type of pictures like, “Oh, look at me before, look at me after, look how fun it is.” And, an interesting point is that the majority of users would not say… would not hide that it’s digital. They would say, “Oh, my God, look, it’s so cool. It’s like just digital.” We wanted to make this process very easy for people, because we understand that the concept of digital fashion is pretty new and challenging. And that’s why we didn’t do it on blockchain, for example, from day one, because it would add a huge layer of complexity. We wanted to give them a simple journey, how people use, like… how they know how to shop. You go online, you scroll, you see something you like, you check this item closer, and you put it in your cart. And then you upload the picture of yourself where you can… where you want to see yourself wearing this item. And you checkout, you pay with the card, like, super easy journey, and you receive it back to your email, the same one that you provided for the email confirmation. However, also, we understand that we should get closer to the notion of the wardrobe of a person for digital spaces and reentry. We launched the mobile app, and it’s available right now on iOS and on Android, on both platforms. Because, again, for us, it’s very important to include everyone in this conversation. 

Christina Binkley  33:00

Who uses it more, Android or iOS?

Natalia Modenova  33:02

We have more people on Android. However, people who spend more time in the app are iOS users. That’s interesting. So the Android people are curious, but not really hanging out. And the iOS people are Really taking care, yes. Really taking care of their image. And really taking care of curating their image and using the available tool for that. For the beginning of our conversation, I think it was off record, but we were joking that people in fashion use iPhone and people in tech use Android. So that’s proof. Data proves that, data proves that.

Shilla Kim-Parker  33:43

And Natalia, then, for the bucket hat that you’re wearing, how would somebody get that? Because… are you able– for the item you purchased, you’re able to rewear it in different contexts, or you only get that one image per use?

Natalia Modenova  33:55

That’s a great question. So, here I will make an analogy with the physical world again. When you go to the gym, and when you go to a Gala, and when you go to the office, you would definitely wear different outfits. And different social environments are also like that. So when you are posting something on LinkedIn, it’s probably something different from what you would post on Tik Tok. And that’s exactly how we approach this usability question. So we create collections for Roblox, and we understand it’s mostly kids and, like, teenagers in Roblox, and they would want to have some, like, wings, or, like, something like that. That’s exactly why when we did the collaboration with Dundas, with Peter Dundas, and created a collection for Roblox, we were selecting the outfits with him and his team that should be, kind of, translated from physical to digital, and we selected these beautiful accessories that Emrata was wearing for the Met Gala in 2019– this, like, wings around your ears accessory. And this is a very beautiful one, and it was viral, and super popular,and it was in all the red carpet reports. And the Roblox audience embraced it. And that’s to the question of, like, how brands should approach their present, this should be something relevant to the platform, relevant to the audience. And that’s how we approach it as well. Though, this particular hat is part of the NFT drop that we do. So we distribute digital fashion off chain, as I mentioned, something that is super easy to buy with a credit card, or to have a subscription in our mobile app, just with one click of a button, just like any other subscription in any other app. And you can have access to more exclusive items in digital fashion, because we also provide an opportunity to try it for free.

Christina Binkley  36:02

If I bought the hat that you have on now, could I wear it on our Zoom call today? I could post it on Instagram, and then next year, when I want to go to an event where I think it’s the right thing, I could use it again? So I can repeatedly wear it on different places, or do I just get to use it once?

Natalia Modenova  36:18

For the photo look, Meta look, you just use it once. So, it can be compared to short-term renting, like for on the runway– you get a dress, you wear it for an event, you give it back. But you wore it. You have pictures, you have proof of it, right? And you don’t have ownership over this dress. However, when you buy this hat that I’m wearing– and this is an NFT– you can wear it and then you can sell it afterwards, and then a new owner will be able to start wearing it, whereas you will lose an opportunity to wear it at the same time when they can do it. So that’s how it works. And when we announce certain items, we always specify where they have a utility. So, for example, when we launch a collection for Roblox, of course, it works in Roblox, but also sometimes we give an opportunity to try on the same outfits in augmented reality. When we launch this bucket hat as an NFT, we clearly say that you can wear it in augmented reality, and it’s an exclusive experience only for their holders. And, also, we are catering to the NFT native people who already have other types of NFT’s. And we say that they can dress up not only their photos, but their PFP profile pictures like Bored Apes, or their CloneX, or their World of Women, all these things that people use as their profile pictures. And they can curate their profile pictures, that are, kind of, NFT native with our accessory. So that’s how we position it. And that’s the difference between items distributed off chain and on chain. 

Shilla Kim-Parker  38:10

Are you able to give a sense of scale in any way? Whatever you’re comfortable sharing, in terms of users, or design sold? Or just the amount of growth you’ve seen over the past couple of years?

Natalia Modenova  38:19

Yes, of course. So I will start with the number of items available. We started from just six designers and maybe 15 items on the platform. And now it’s over 3000 items, and we work with over 300 designers, we can say that, on average, people tried on digital fashion almost 300,000 times, which is very important for us.

Christina Binkley  38:48

And how do you make your money? I know I keep asking you that I’m assuming you take a percentage of the sales.

Natalia Modenova  38:53

We take a percentage of the sales when it’s a designer’s item, as the marketplace would do. We keep the whole revenue from our own design items. And if we distribute it with our partner platforms like Roblox, or Meta, or Zepeto, it’s also a revenue share model. When it’s an NFT, again, it’s a revenue sharing model with a brand with a co-creator. And in the mobile app, there is a subscription model for users to have an opportunity to wear a certain number of looks during a certain period of time, very similar to what the runway does, but in digital.

Rachel Kibbe  39:32

Interoperability. So what’s the future of that? And what I mean by that– you’re wearing a bucket hat right now, on a Zoom call. I don’t know… the audience isn’t going to be able to see that, but in the future, I think the goal would be for, potentially, that to be able to be worn on Instagram on any other social platform or a Metaverse platform that we haven’t conceived of yet. But is the goal, in the future, to have an interoperable wardrobe across platforms, across gaming? Because that’s really exciting to me. I like to wear things over and over.

Natalia Modenova  40:05

Yes, yes, absolutely. And that’s our vision, and that’s what we are building. However, when we started, it was just one use case per one item. And now we bundle several different use cases in one item. And, of course, the price of the digital outfit will also depend on the number of utilities that are provided together with this item. And right now, if you buy it, and you can wear it only on Instagram is one price, but if you wear it on Instagram and in, like, Roblox, and on Zoom, it’s going to be a higher price. But this is something that is coming, because when people talk about interoperability, they usually start from the notion of the 3D files, because 3D file for augmented reality is that the same 3D file that would be used for a Meta avatar. Sso that’s the first and very important question of making the asset and the visual interoperable. But then, there is another very important issue with interoperability of the ownership. Because when you buy something in Roblox, for example, you are not owning the item, the platform is owning the item. And how you can take it out of Roblox and wear it on Instagram… there is no way. 

Rachel Kibbe  41:30

So all those platforms would have to be in agreement with each other on…

Natalia Modenova  41:33

That’s right.

Christina Binkley  41:34

  Oh, my God, this is complicated. Wow. So you have a partnership with Meta, right?

Natalia Modenova  41:39

Yes. So, first of all, for us it’s great to work with Meta because we are aiming for the scale, and of course, the scale that Meta achieved is definitely a great example for us. And, also, we see, usually, when we collaborate with the platform that has a big audience, they love the value proposition that we bring. And on bigger numbers, it’s even more obvious than on smaller numbers. So it’s really amazing to work with them. We started when this avatar shop was not available in all the countries. It was very early days, and they rolled it out step by step. And it was amazing how, actually, the response from the users was, because people from different countries would approach us and say, “Wow, this is amazing, but I don’t see it. But, like, how do I do that?” And I’m ready to take credit that we actually educated a lot of people on how to start using their avatars in Meta, and a lot of people would not even have their avatar just yet. But then, when they saw that they can actually… they saw, I can dress them. 

Christina Binkley  43:01

That’s the role of fashion in the world. Super quick– have you dressed Mark Zuckerberg? Yes or no?

Natalia Modenova  43:08

Yes. And we did it even before we started the official partnership. And Meta, if you go on our Instagram, he is wearing a bunch of outfits from DressX.

Christina Binkley  43:17

Please tell me it’s more than khakis and a T shirt.

Natalia Modenova  43:20

Absolutely. It’s like super fantastical outfits. We actually made it as soon as they announced that they will have an avatar store

Christina Binkley  43:28

Before we close this out, I just– I want to address something here. Natalia, you and Daria are from Ukraine. And I know I know you’re living in the United States now, but I’m sure you have family there that are impacted. How are your family? How’s that going?

Natalia Modenova  43:43

On a personal level, everyone is alive. But, of course, we all have a lot of very close people who are either fighting there or… really, we can say, like, continuing running a business in Ukraine is kind of a fight right now, right? So, even people who run a beauty business… people still do that, but still, it’s very challenging. Next winter is going to be even harder than this one. And this is– again, we can come back to the power of digital fashion, because that’s a tool to deliver a certain message. And immediately, on the first day, we thought, “Okay, what can we do?” And we launched this collection of digital fashion with Ukrainian flag colors. We are coming from the fashion industry, and we understand that some of the, like, influencers who translate this beautiful life, and beautiful lifestyle, and this dream life, they would maybe talk about it, but they don’t want to, like, scare people or put some content that is blurred, and Instagram says okay, this is like, “Are you sure you want to see that? It’s, like, something scary there.” So we use this fashion as a tool to still communicate about this war, about this problem and, like, bring attention. Madonna was wearing this dress from the Support Ukraine collection.

Christina Binkley  45:16

t’s– by the way, I should just describe it: literally, the dresses are largely like the Ukrainian flag, that beautiful golden flax color below and the sky blue above. And, fantastical. Serious. I mean, it’s fashion fashion.

Natalia Modenova  45:32

Yes. And it’s shaped as a heart. So it’s, like, showing this, like, love and support in the way that people know how to communicate, in this, like, fashion language.

Christina Binkley  45:45

You’re raising money for Ukraine with that, aren’t you? 

Natalia Modenova  45:48

Yeah, this collection, unfortunately, became a permanent collection. We hope it will be temporary, but it’s still available, and the funds that are raised through this collection go to support creative community of Ukraine, because there are a lot of, like, stylists, photographers, 3D designers. There was a case when a person left the house and never came back. But means of creation, means of work are there, like, computer, or, like, a monitor. So we tend to help people from creative industries to continue working, to continue creating value for the world. It’s not just giving fish, but giving a tool to keep giving their creativity out to the world.

Christina Binkley  46:34

I’m glad to hear, by the way, that your family is– I don’t know if safe is the right word. I noticed you said they’re alive, and I guess, in the state of things there right now, that’s something to be celebrated. So I’m glad to hear that. Thank you very much for joining us and helping us to understand. The more I learn about digital fashion, the less mesmerizing it is. It seemed hard to grasp to me at first for some reason. I don’t know why.

Natalia Modenova  47:01

Yeah, I understand. But now, actually, more of the big players are jumping into this. And there is more data about digital fashion that becomes available. When we were starting, it was like a blank paper, almost. And then you see the Bloomberg report, and, like, Morgan Stanley report, and, like, there are serious people looking into that and giving their data as well. So it’s becoming tangible. And we are… we’re big believers in it.

Christina Binkley  47:32

I’ll tell you what, if I’m putting something on on digitally, it’s going to be something that I would never wear in real life. Thank you very much.  

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