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Writer's pictureAmy Edwards

Ecommerce & Real Estate in the Metaverse

Mark Zuckerberg (Facebook founder and chief executive) has renamed his company Meta, and “plans to realign resources on efforts to build the metaverse.” However, building the Metaverse will “require years of investment of time and money” (Bain, 2021). As the Metaverse will most likely be “a persistent virtual plane,” a key feature will be how we present ourselves as avatars, as social norms and restrictions of the real world may no longer apply. Besides the challenge of simulating clothing, there is also the issue that virtual fashion items must be able to be transferred across different platforms. As a result, people in digital fashion are looking for NFTs (non-fungible tokens) as they can prove ownership of digital items using “blockchain ledgers” (Bain, 2021). NFTs are the equivalent of couture in the metaverse, as they often sell at a better price than global brands due to their scarcity, making them “crypto status symbols” (Why the Metaverse Is Fashion's Next Goldmine, 2021).

Fig. 1 Meta Logo Graphic (2021)


Dimension, a virtual production start-up that specialises in creating digital humans and virtual worlds, “made $6.5 million in revenues from 2020-2021;” double what they made the previous year. Fashion brands are increasingly experimenting with “virtual activations,” creating everything from AR try-on to VR showrooms and fashion games in order “to catch a new marketing wave” (Maguire, 2021). Dimension produced Balenciaga’s Afterworld game and a virtual catwalk for London Fashion Week in 2020, and worked with H&M to create an AR pop-up book for the Simone Rocha collaboration this year. The company have also reported a rise in demand for avatars, more specifically digital influencers used by fashion and beauty brands for “use across social media and marketing channels” (Maguire, 2021).


Cathy Hackl (a futurist and metaverse expert consultant) stated that “the professionals of tomorrow will already be thinking in 3D,” and agencies must partner with people who have game design experience and theory (Maguire, 2021). Additionally, Benoit Pagotto (the Co-founder of RTFKT Studios) explained that although the worlds of gaming and fashion are merging, “very few people can actually make that bridge and make something that is culturally impactful,” successful, and will fit in the product market. He also said that when developers create 3D game assets or digital items, a lot of craftsmanship is involved; “it's sculpting, modeling, texturing…a lot of things you can find as well in traditional fashion.” In a sense it is “an atelier workshop” (Why the Metaverse Is Fashion's Next Goldmine, 2021).


Pagotto designed and launched a virtual sneaker collaboration over a two week period, and made $3.1 million in less than 5 minutes. He believes that the future is augmented reality glasses, which will become mainstream, as they will enable consumers to view and purchase virtual garments everywhere, and even see who owns expensive NFT-based garments. Furthermore, with more consumers becoming aware of our impact on the environment, and the desire for sustainable fashion increasing, digital garments could provide a solution as they emit 97% less CO2 than physical ones and will not deteriorate over time. Nonetheless, “minting and mining NFTs requires skyrocketing energy consumption in the real world,” and there is still more research to be done on environmentally efficient manufacture of garments (Why the Metaverse Is Fashion's Next Goldmine, 2021).


Fig. 2 Virtual Store (2021)


Luxury beauty brand Charlotte Tilbury has a focus on digital engagement with consumers through game mechanics, and as of November, Charlotte Tilbury has moved further into the metaverse with the new “Shop With Friends” feature included in the VR store; allowing consumers to add up to four people in a video call while browsing the virtual experience and products. By next year, Charlotte Tilbury will release a feature that enables consumers to create avatars of themselves and browse the virtual store, bringing the brand “further into the metaverse of online shopping.” Tilbury explained that digital innovation is at the heart of everything the brand does, and by launching these new features in the VR store, they are “truly operating as an omnichannel business to bring customers rich and immersive experiences whenever and wherever they meet the brand” (Flora, 2021).


Neha Singh, founder and CEO of virtual store platform Obsess (responsible for CT), described the metaverse as the “new mall,” as consumers in these platforms “are not just playing games. They’re just hanging out [too]” (Flora, 2021). Recently Obsess has rapidly scaled its team, due to the increasing demand from major fashion and beauty brands. Other than Charlotte Tilbury, the company have created over 100 virtual stores for brands including Ferragamo, Coach, Ralph Lauren, Tommy Hilfiger and Dermalogica, providing insights that will be crucial to the success of virtual stores. Olga Dogadkina, CEO of virtual retail company Emperia explained that “virtual experiences have the advantage of being able to granularly track users’ activity, from tastes, to movement around the space, to demographics appeal and checkout process” (McDowell, 2021). Furthermore, consumers are more likely to spend time in immersive VR stores, as unlike brick and mortar stores, they have few limitations; enabling the creation of “fantastical elements.” Having said that, successful virtual experiences must not neglect practicality or utility, as “intuitive navigation, realistic 3D renders and access to customer support” are essential elements (McDowell, 2021).


Obsess ensure that the layout and path of their store is very clear to the consumer, as when presented with multiple options, “people don’t go anywhere…an easier path increases engagement.” For this reason, on entry of the Charlotte Tilbury VR store, an introductory video zooms out to display the entire space. Tilbury believes that in virtual experiences, “simplicity, delight and space for curiosity is key,” and consequently she chose her products to be displayed very selectively (McDowell, 2021). To prepare for the future of “metacommerce,” Neha Singh believes that brands must decide what their VR store will look like, and “create assets that can be used in multiple platforms” (similar to being consistent across physical locations). Then they need to evaluate which metaverse platforms align the most with their consumer demographic. Singh’s vision for Obsess is that it will have the ability for brands to automatically publish on platforms such as Roblox and Fortnite, so that they can maintain a consistent presence across platforms (McDowell, 2021).


Fig. 3 Woman Wearing VR Headset (2020)


There is already a demand for permanent locations from Obsess; Charlotte Tilbury sees her virtual store as an ongoing, adaptable space. Threedium (a 3D software company) raised $2.1 million to buy digital real estate and create a headquarters in Decentraland (the “Fashion Street district”), to better enable brands to create and sell digital fashion and virtual spaces (McDowell, 2021). Moreover, blockchain investor Tokens.com also purchased “the largest metaverse land acquisition to date” in Decentraland, with the aim of using the space to host digital fashion shows and collaborate with fashion brands (Lee Hood, 2021). Tokens.com purchased 6,090 square feet of digital land for 618,000 MANA (an Ethereum-based token); equivalent to around $2.4 million USD. Following this transaction and Facebook’s metaverse push, MANA increased in value by almost 40% (Lee Hood, 2021).


To conclude, as we spend more time in virtual environments, the barrier between the physical and digital will blur. It is predicted that digital fashion will be a key part of the metaverse, and in a few years virtual stores will be as commonplace as online shopping (McDowell, 2021). Although VR stores are seemingly more fun than conventional shopping, I believe that they still have a long way to go, as the technology needs developing. Charlotte Tilbury’s virtual store for example, is not easy to navigate and lags (making it time consuming to use). As a result, it has an overall clunky feel which undermines the luxury aspects of the brand, and makes regular online shopping features the preferable option.

As of today, there are also no brands that have attempted to rethink and gamify the traditional e-commerce checkout, and Maria Prados (head of vertical growth teams at Worldpay) believes that the traditional ‘buy’ button is becoming obsolete as the consumer is being taken out of their virtual experience to complete the purchase, and the bubble is burst. In order to secure customer loyalty and boost checkout conversion, brands must create a check out experience in line with style and voice and in some middle ground between AR and real life. They also must not forget the power of adding traditional gamified elements to the checkout process. Evidence has shown that by adding gamification “retailers can increase the volume and value of transactions” while boosting conversion by up to 15% (Dewaele, 2017). Finally, my opinion on the “meta-commerce” (property development in particular), is that we should be focused on restoring what is left of our own planet in real life, not competing to make virtual investments instead.



Bibliography

Bain, M. (2021) Facebook’s Vision for Fashion in the Metaverse. At: https://www.businessoffashion.com/articles/technology/facebooks-vision-for-fashion-in-the-metaverse/ (Accessed 19/11/2021).

Ball, M. (2020) The Metaverse: What It Is, Where to Find it, and Who Will Build It. At: https://www.matthewball.vc/all/themetaverse (Accessed 19/11/2021).

Boson Protocol (2021) Fashion in the metaverse. At: https://medium.com/bosonprotocol/fashion-in-the-metaverse-2235b14c47b (Accessed 19/11/2021).

Dewaele, G. (2017) The future of checkouts: Gamify the experience. At: https://www.itproportal.com/features/the-future-of-checkouts-gamify-the-experience/ (Accessed 10/12/2021).

Maguire, L. (2021) Dimension Studio: How fashion is being brought to the metaverse. At: https://www.voguebusiness.com/technology/dimension-studio-how-fashion-is-being-brought-to-the-metaverse (Accessed 19/11/2021).

Why the Metaverse Is Fashion's Next Goldmine (2021) [Educational Video] At: https://youtu.be/UBZ6Bd0LDjs (Accessed 19/11/2021).

Bibliography

Flora, L. (2021) Charlotte Tilbury steps further into the metaverse. At: https://www.glossy.co/beauty/charlotte-tilbury-steps-further-into-the-metaverse/ (Accessed 22/11/2021).

Lee Hood, A. (2021) Plot of Metaverse “Land” Sells for $2.4 Million. At: https://futurism.com/biggest-metaverse-land-purchase (Accessed 22/11/2021).

McDowell, M. (2021) Virtual stores: Fashion’s new mode of shopping. At: https://www.voguebusiness.com/technology/virtual-stores-fashions-new-mode-of-shopping (Accessed 22/11/2021).


List of Images

Fig. 1 Johnson, S. (2021) Meta Logo Graphic. [Digital illustration] At: https://unsplash.com/photos/2UjheC7FBWQ (Accessed 19/10/2021).

Fig. 2 Charlotte Tilbury (2021) Virtual Store. [Website Screenshot] At: https://www.charlottetilbury.com/uk/virtual-store#/view-2 (Accessed 19/10/2021).

Fig. 3 Sideri, S. (2020) Woman Wearing VR Headset. [Photo] At: https://unsplash.com/photos/LFXMtUuAKK8 (Accessed 19/10/2021).

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