Luxury Brands Are Leading the Way to the Metaverse
A huge mindshift is already taking place within retail businesses across the globe, as they strive to stay ahead of the curve and capitalise upon the breadth of opportunities that the metaverse will bring.
In fact, the change has already begun — virtual goods worth $50 billion were purchased globally in 2021 with items ranging from a Gucci bag (more about this later) to a Burberry jetpack NFT. Transactions you would never even have imagined just a few short years ago have already taken place.
With predictions from Eric Sheridan of Goldman Sachs putting the potential of the metaverse at $8 trillion, it’s no wonder brands are clamoring to get on board early.
“We think this could be as much as an $8 trillion opportunity on the revenue and monetization side. We see the digital economy continuing to grow, and on top of that we see a virtual economy that will grow within and alongside this digital economy…”
It’s fascinating to watch as the early adopters begin their first forays into the virtual world. Last year’s ‘Gucci Garden’ event was hosted on Roblox. It offered its attendees the opportunity to virtually explore elaborately themed rooms featuring six years of their iconic campaigns. Crucially, and testament to the potential of luxury retail in the metaverse, it was also home to a store selling limited edition avatars and digital items. One handbag alone sold for 350,000 Robux — or around $4115 which is around $800 over the list price of the ‘real’ bag itself!
There are further examples of brands capitalising on the desirability of NFTs. Prestige watch brand Panerai launched an NFT initiative with their exclusive Radiomir Eilean Experience Edition watch. Each of the limited edition timepieces were created, alongside an exclusive collection of 50 NFT artworks that accompany each purchase.
“Through the creation of our first NFTs, the brand will use dynamic new measures to respond to our customers and allow them to enhance the ownership of their treasured Panerai watches.” said Panerai chief executive Jean-Marc Pontroue when speaking to Boat International.
Towards the end of 2021, fashion giant Balenciaga also took steps into the metaverse through a collaboration with Fortnite. Players of the open-world video game could purchase digital outfits inspired by real-life Balenciaga pieces from its virtual boutique. In fact they announced an entire business dedicated to exploring marketing and commerce in the metaverse.
These shifts in traditional retail have got experts and commentators across the globe excited for the future. Reddit founder Alexia Ohanian took to Twitter to share his thoughts;
So, what’s next?
Naturally, selling goods (and services) in the metaverse will be significantly cheaper than investing in physical stores. It’s also no secret that footfall in previously busy shopping areas has declined over recent years — perhaps this shift and extension to the next version ‘online shopping’ is long overdue.
Not only that but it opens up access to new target markets and segments, with unprecedented ways to tailor online experiences and nurture customer relationships in ways only dreamt of previously. A study by Razorfish and Vice Media Group showed that one-third of Gen Zers would like to see brands develop virtual stores, and 30% were receptive to brands selling skins and apparel to outfit digital avatars.
Let’s not forget the benefits for the consumers too. Imagine sending your avatar off to try on clothes for you in a digital store, the new ‘try before you buy’ — pretty cool, right! Consumers will be able to visit retailers at any time of day or night, in any place as they finally take complete control of how and where they chose to make purchases. What’s more, they will be able to order those goods from a virtual store to be dispatched in a physical format or even as an in-game NFT.
Perhaps most excitingly, this is just the tip of the iceberg for brands in the metaverse and we cannot wait to see what else the future holds — one thing’s for certain we’re ready and excited to welcome these brands into Victoria VR.