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Investing in the metaverse: 3 reasons to get started [Analysis]

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Investing in the metaverse is very trendy. In particular, in the fashion and luxury industries, companies are showing significant interest. If we can debate the generalization of the metaverse or the ethical problems it poses, one thing is sure. The metaverse is a reservoir of opportunities for those who want to reach early adopters. In this article, we analyze 3 reasons companies invest in the metaverse: to generate additional revenuesattract new customers, and make the link between real and virtual.

We propose 10 detailed examples with illustrative videos for everyone to benefit from this article. You will quickly grasp the extent of the possibilities and the diversity of the marketing operations put in place.

Investing in the metaverse: an overview in 30 seconds

Experiments in the metaverse have multiplied since this “buzzword” was popularized in 2021. In the fashion and luxury industries, several brands have decided to invest in the metaverse and have launched their first marketing operations. These operations remain technically complex, and their implementation requires elaborate marketing plans, especially collaborations between brands.

Each brand bets on a single virtual universe (Roblox, Zepeto, Animal Crossing, Fortnite), but some do not hesitate to develop their universe (Balenciaga, Royal Crown). Finally, some brands like Maison Berger are opting for solutions based on augmented reality.

Initiatives are currently limited to the fashion and luxury sectors. They fall into 3 categories:

  1. generation of additional revenue (Gucci, Nike, Vans, Balenciaga)
  2. conquering new brand territories and new audiences (Crown Royal, Balenciaga, Gémo)
  3. the implementation of an offline/online continuum to simplify the customer experience (Vuitton, Zara, Maison Berger)

However, we can wonder about the craze observed for these virtual goods. A virtual Gucci bag sold for more than its tangible counterpart, and nearly $8m was spent in 1 week to buy virtual Nike sneakers (CryptoKicks). This madness is reminiscent of the crazy prices of the Abloh x Vuitton sale, where authentic sneakers sold for more than $350,000 a pair.


The metaverse: a new sales channel

Diversifying sales channels may seem evident in the age of omnichannel. Retailers need to be present on all channels because the customer experience is becoming more and more complex. The metaverse is undoubtedly an opportunity to diversify sales by proposing new “products.” Unlike traditional channels, these are entirely virtual products whose ownership can be guaranteed by an NFT.

Here are a few prominent examples. As you will see, this diversification strategy is, for the moment, mainly the prerogative of luxury and fashion giants.


More than $8m (3100 Ethereum) of revenue was generated by Nike in one week with the sale of its virtual sneakers


Nike

At the end of 2021, Nike’s acquisition of RTFKT, a studio specialized in the “creation of high-end digital shoes,” is symptomatic of this novelty race. In April 2022, RTFKT released its first collection of customizable virtual sneakers: the CryptoKicks (see video below). More than $8m (3100 Ethereum) of revenue was generated in the first week.

Besides the fact that these sneakers are virtual, their particularity is to be customizable. This is reminiscent of Nike’s efforts in the real world with NikeID, launched in the early 2000s.


Balenciaga

Balenciaga has announced the launch of a line of products, projects, and experiences designed entirely for the metaverse. A dedicated video game, Afterworld, has even been created. It highlights the designer’s collections.


Gucci

Gucci made headlines in the trade press after selling a virtual handbag on Roblox that was more expensive than its real counterpart.

gucci bag on roblox


Vans

The brand Vans launched in 2021 on Roblox the Skatepark “Off the Wall.” Internet users can create shoes and clothes but also buy them. Style is no longer a prerogative of the real world. It is also displayed in virtual worlds.


An opportunity to attract new customers

The 3 examples we analyze below illustrate how brands can reach new audiences on the metaverse. The marketing operations are particularly complex and show how much creativity is now required to defend and increase brand territory. There is no such thing as a simple marketing operation in the metaverse. Entering the metaverse territory requires technical skills, collaborations, and elaborate activation strategies. This probably explains why these operations are still the prerogative of very large brands that dedicate substantial budgets.

Crown Royal

The case of the Canadian brand Crown Royal is quite interesting. It produced a commercial from scanned and 3D printed environments. The result is quite stunning (see video below). The brand didn’t stop there, as an immersive experience allowed one to dive into the recreated world. In this city, with the brand’s colors, the participants could practice various activities and … indulge in the joys of virtual drinking.

This marketing operation is interesting not only for the technologies used (scanning, 3D printing, metaverse) but also for the way it extends the brand’s territory. By investing in a 3D world of its own, it is conquering a new audience and introducing its brand to new potential consumers.


Balenciaga collaborates with Fortnite

Balenciaga’s collaboration with Fortnite, announced in September 2021, is another case. A priori, the world of video games and luxury is quite distant. By launching a virtual clothing collection for 4 Fortnite characters, Epic Games has allowed Balenciaga to get closer to a new potential customer base. The brand territory has expanded as in the previous case, and Balenciaga’s awareness has penetrated a new circle.

It should be noted that the financial aspects were not absent from this operation since the virtual clothes had to be purchased for the most part. However, the purchase of real clothes automatically entitled the virtual counterpart in Fortnite.


Gémo is present on Animal Crossing

The French clothing brand Gémo took advantage of the confinement to present its collections outside its physical stores. After a poll on social networks, the Animal Crossing game was chosen to recreate the brand’s universe. The new collection of clothes was recreated in “pixel art” so that the Animal Crossing characters could wear them. A virtual Gémo store was even set up to present the latest collection, and a virtual fashion show was organized with an influencer in the fashion world.


Linking the real and the virtual

Linking the offline and online worlds is one of the challenges for retail in the coming years since Covid and the subsequent acceleration of e-commerce, food and non-food retailers are faced with the challenge of reading the customer experience.

The metaverse is a further manifestation of this complexity. It is a new space where consumers can “consume” the brand. Therefore, it is essential to be able to follow them there and propose options to make the transition to the real world. Because no matter what we say, the real world (offline) will always be the preferred sales and communication channel for brands.

The examples below show how brands are transitioning from the real to the virtual world. For the moment, we have to admit that the examples are pretty basic. But let’s bet that this is only the first step towards a more refined understanding of consumer behavior.


Vuitton x Leagues of Legend

Vuitton was the first luxury brand to invest in virtual worlds. In 2019 a collaboration with Riot Games, publisher of the game Leagues of Legend, was announced. Nicolas Ghesquière, the designer of Vuitton, first created “skins” for characters of Leagues of Legend. A series of limited-edition pieces, using the aesthetic codes of the game, was launched in March 2020 at prices that many considered excessive (500€ for a t-shirt).


Zara x Adder error

Ader Error has collaborated with Zara to launch a line of products available in both the real and virtual worlds. This time, the ZEPETO platform has been chosen to market the “skins” of the ZaraxAden collection.

Ader Error is a South Korean brand launched in 2014. It became known for its collaborations with Camper, Maison Kitsuné, or Casetify. It is on the same platform Zepeto that it had released the skins of its previous collaborations. Its strong positioning has already pushed it to invest in virtual worlds.


Maison Berger

Finally, here’s an initiative that stands out a little from the crowd since it mixes augmented reality, real and virtual worlds, and live interaction. Maison Berger, the French home fragrance brand, organized a live on Instagram in augmented reality for the 2021 holiday season.

The live was realized in its Parisian concept store. Participants were able to discover the real world, augmented with Wilkins Avenue AR technology. Their avatars (clearly visible in the video below) were able to interact during the demos.

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Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

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