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The metaverse—the virtual world where your avatar shops, dines, and hangs out with digital buddies—is a place where the digital streets are paved with real gold.
JPMorgan Chase sees this new digital universe as a trillion-dollar market, where $54 billion in goods are selling at an annual rate, more than is spent to buy and download music.
Google, Roblox, and other companies already have spent tens of millions of dollars building the infrastructure of this alternative universe; Meta, Facebook’s parent, has pledged a $1-billion annual investment in the metaverse and has staked its future on this seemingly limitless new world.
“Instead of having stores in every city, a major retailer might build a global hub in the metaverse that is able to serve millions of customers,” JP Morgan’s analysts said in a report.
Customers already are waving their real dollars at these digital stores.
RTFKT, a start-up funded by metaverse-focused Galaxy Interactive investment fund, sold a digital sneaker as a non-fungible token in the metaverse, selling at least 600 pairs last year and collecting $3.1 million.
Some are sparing no virtual expense to cash in.
Customers at Nikeland, the shoe company’s metaworld, are greeted by a digital version of basketball hero LeBron James.
Forever 21, the fast-fashion house targeting young women, leads your avatar through a crowd of paparazzi and cheering fans into its five-story style palace, where you can spend your virtual currency on a wardrobe, get a makeover, and finally reach the roof, where you float in a bubble gently back down to where you began.
A popular item is a digital beanie bearing the word “Forever” that customers can buy with 61 “robux,” the currency of Roblox’s make-believe world, which can be bought with real-world dollars—in this case, about 75 cents.
That’s small change, but retailers see beyond the price: virtual stores have no returns, no shipping costs, no supply chain problems, no dark hours, and no holiday closures.
Also, the beanie’s popularity has led the chain to consider selling a physical version of the same beanie next winter, enabling customers to dress themselves and their avatars alike.
“How you present yourself or how you allow your brand to be utilized in this environment is critical,” CEO Steve Rendle of VF Corporation, which owns North Face clothing and Vans and Timberland footwear brands, told the Financial Times.
“There’s work to be done in how you connect this to commerce,” he added.
Fortunately, the metaverse already is populated with service companies such as Virtual Brand Group, which designed and built Forever 21’s metastore, which has welcomed more than 200,000 visitors to its virtual store since it opened not quite three months ago.
“We design the clothing, we come up with the marketing strategies, we work with the influencers, and we build out the entire world” for clients, Virtual Brands’ CEO Justin Hochberg told the Financial Times.
So far, however, not many are impressed.
People visiting Forever 21’s metastore have given it an approval rating of 39 percent; fewer than 25 percent of U.S. adults have any interest in visiting the metaverse, according to a 2021 Forrester Research poll.
Also, visitors will leave the same digital trail in the metaverse that they do on the web, enabling marketers to collect even more data about their interests and shopping habits.
TREND FORECAST: Hanging out in the metaverse requires more time, attention, and expense than looking up something on the Internet. The metaverse will eventually be well-populated, but its denizens are likely to be today’s young people who grow up with it, not those of us who have learned to find most of our enjoyment in the real world.