21 Mar The Wonderful World of Virtual Luxury
With the success of NFTs last year, designer brands are beginning to see profitable opportunities in investing in virtual worlds. A Gucci bag, for instance, sold on Roblox’s avatar marketplace for roughly $4,115. In another distant virtual universe, Balenciaga outfits are selling for close to $1000 on Fortnite. The virtual hype market is not limited to gaming experiences either. An NFT for a virtual pair of sneakers earned $3.1m in less than 7 minutes of being on the market. So what is it all about?
How You Look At It
As people’s identities and personas become more and more related to their digital presence, people are beginning to find value in non-tangible items that are marketed to solve issues like whether or not their Snapchat avatar is adequately representing Ralph Lauren or wearing the freshest Jordans. So is spending $4,115 on a Gucci bag on Roblox any less valid than spending $2,650 on that same Gucci bag in real life? Is all of this spending on virtual avatars a matter of careless buying? Well, it depends on how you look at it.
A survey conducted by Squarespace revealed that 60% of Gen Z and 62% of millennials believe that it’s more important to look good online than it is to make a good impression in real-life. In addition to that, a study by The New Consumer points out that 45% of Gen Z and 43% of Millennials feel more like themselves online. This is a deep cut-off compared to their predecessors where only 22% of Gen X feel right at home when they’re online.
Stands to reason that many people want their avatars to be laced up in only the latest and most luxurious virtual goods. Since there’s limited availability of these goods, there’s an authenticity to them and there’s status with owning a particularly rare item. D2A accessories allow the glamor and profit of their physical counterparts without all of the expensive logistics and without the ethical issues of taking advantage of relaxed international labor laws.
Testing The Waters
Of course, just like with any marketing strategy, these designer brands need to be able to reach out and grab their target audience directly. Around the same time frame, Gucci dropped its pricey bag onto the Roblox marketplace; they also collaborated with Roblox on a 2-week virtual event called, “The Gucci Garden Experience” – a sort of art gallery designed to showcase some of Roblox’s latest graphical updates. However, a graphical showcase might not have been the focal goal of this event as the Gucci Garden reportedly brought in thousands of purchases of virtual goods from over 20M visitors.
Gucci isn’t the only brand splashing around in a pool of “Robux,” either. Vans is also testing the waters with their Robloxian target audience through digital storefronts. Their contribution to the Robloxiverse is a virtual skating world where Robloxians can customize their skateboards, perform gnarly tricks, and purchase Vans branded virtual goods.
Having A Field Day
It’s not just virtual items that are gaining profitable traction either. The Sandbox, a block-based blockchain, gives users the option to buy and monetize virtual property and assets. The Sandbox’s virtual token called, “SAND,” experienced a 25% surge shortly after Adidas teased a partnership with the blockchain-based sandbox game.
As more and more virtual social hubs like The Sandbox, MetaVerse, and VRChat come out, designer fashion brands are going to be having a field day with Generation Alpha through direct-to-avatar (D2A) branding. We can already observe the value Generation Alpha sees in virtual goods through the fact that Roblox generated nearly $1 billion in revenue in 2020. With half of the children in the US on Roblox, this kind of profit would have been an impossibility without kids scratching and tugging on their parents’ pant legs for Robux.
Leaving Your Digital Footprint
Pretty soon, people may even be able to bring their $4,115 Roblox Gucci bag wherever they choose to leave their digital footprint. With avatar tech companies like Genies and Wolf3D working to allow users to create avatars they can use in nearly any game, the value in avatar accessories is only going to get much higher. In fact, the market for virtual goods such as NFTs and avatar accessories is currently valued at $190 billion.
For those who have seen Steven Spielberg’s ‘Ready Player One,’ this likely future can only seem all too familiar. As more and more people become unsatisfied with the real world, it should come as no surprise that many are wanting to latch onto virtual worlds where they have a little bit more control over things. Brands are having to catch up with this trend of escapism that is leading people to value in-game items more than physical items.
If spending thousands of dollars on designer clothes for their Fortnite character allows someone to make more sense of the stress involved in modern-day living, the opportunity is now certainly available to them. If someone wishes to strut around multiple online worlds with a $10,000 Ryan Gosling doppelganger avatar, they might also be able to do just that in the not-so-distant future. And there’s nothing wrong with that.