Updated: Oct 16, 2022
Stephen H. Haliczer
Director of Metaverse Research
In this second blog post unpacking Polycount’s definition of the metaverse and the business opportunities that it suggests, I will take up the section that reads “3D virtual spaces within which people (represented as avatars) …….”
To understand the business opportunities presented by people using avatars to represent them in 3D spaces, there is probably no better example than the fashion industry. The digital-only Gucci bag that sold for $4,115 on Roblox demonstrates the lengths that some players will go to adorn their avatars even though the virtual bag has no value outside of the Roblox virtual world and could have been purchased for $700 less in a Gucci store. What this instance made perfectly clear is that some people place as much or more value on the digital wardrobes of their avatars as they would spend on dressing themselves.
The potential benefits of designing digital clothing for use by avatars has led more and more leading fashion industry companies to create digital only fashions for sale in specific virtual worlds. Zepeto, a metaverse platform with a user base of more than 300 million and some 20 million monthly active users, has been one of the most successful at attracting major fashion houses. Gucci partnered with Zepeto to create an elegant virtual mansion for avatars to show off their digital Gucci-wear which they could obtain through in-app purchases. Gucci Villa has pulled in more than 1.5 million visitors since its launch
Ralph Lauren took an even more ambitious approach. It’s partnership with Zepeto included the creation of three digital twins of New York City
Avenue store. Zepeto users visiting any of the three locations could choose from among over 50 items, including several created especially for sale on Zepeto. The company also understood the need to engage visitors to its virtual locations with unique events that could not take place in the real world. Using the digital twin of its Madison Avenue store, the company has enlisted a K-Pop band for a live virtual event at which band members will mingle with visitors as avatars wearing digital clothing from the collection.
But why would high fashion brands choose Zepeto which had always been associated with young teenagers? For the very simple reason that those same users are now five or six years older than they were when the app was launched in 2018. Introducing them to a famous label like Gucci or Ralph Lauren on their favorite app becomes a way of forming their tastes just before they begin to have more disposable income and freedom as young adults.
It goes without saying that the automobile industry also wants to engage with millennials and Gen Z who will comprise the customers of the future. But unlike the fashion brands, the automobile industry is at the beginning of a paradigm shift from traditional internal combustion vehicles to electric and autonomous vehicles. As a result, the industry is encountering an unprecedented level of consumer anxiety and uncertainty combined with sticker shock over the cost of the new vehicles. Faced with the need to introduce these new vehicles to as wide an audience as possible while constrained by the lack of actual vehicles because of supply chain issues, companies like Renault, and Nissan have turned to virtual worlds. Renault has partnered with The Sandbox to develop games and other experiences related to its new models. Nissan has gone much further by developing a complete virtual showroom on the VRChat platform. But Nissan’s plans for the metaverse are among the most ambitious in the industry. The (12V) “Invisible-to-Visible project integrates an augmented reality interface with metaverse based VR as a way of enhancing the automobile rider experience.
Fashion houses and automobile manufacturers, seemingly as different from one another as any two industries could be and yet both eager to enter the metaverse. One overarching reason is the need to connect with the tech-savvy Gen Z and Millennials who are or will be their customers. Introducing these new customers to new products is clearly another common objective drawing companies to the metaverse. Creating a new line of digital only products to tap the potential of people representing themselves as avatars has certainly motivated the fashion industry. Finally, engaging the consumer with the brand by providing compelling metaverse-only events motivates the marketers in both industries.
So, does every business need a presence in the metaverse? If the business is not interested in attracting new young customers, exploring the possibilities inherent in developing virtual products for avatars or introducing new products in VR worlds probably not. But if a business wants to remain relevant as consumer interest in the metaverse increases, then it’s about deciding how and when to become engaged.