Some companies have invested more than $1 million to buy virtual land for shopping malls and other buildings that will provide new opportunities for brands. In these virtual worlds people can let their avatars stroll around, meet others, visit virtual stores and buy products. 'This is how the future of social media will look in the metaverse'.
In the emerging 3D shopping malls retailers can rent stores and launch and sell their products. They may invite pop singers and celebrities to attract their audience. These shopping malls are located in virtual cities on the internet on sites like Decentraland and the Sandbox.
Metajuku virtual shopping district
Some locations are so attractive that investors have paid several millions for a patch of virtual land. The Canadian firm Tokens.com invested $2.4 million (via its subsidiary Metaverse Group) in land in the virtual Fashion District in downtown Decentraland. Another company, Republic Realm that develops real estate in the metaverse, paid $4.3 million for land in the Sandbox. The location will be used to create a virtual shopping mall called Metajuku (named after the Tokyo teenage fashion district Harajuku).
„Metajuku is a natural evolution of the retail environment that went from 2D websites to 3D immersive retail stores that people can shop in," says Janine Yorio, managing director at Republic Realm in a video interview. „You can actually walk into a store or pick up an item like a shoe and be able to look at it in 3D, and you can buy either the digital version which you can wear in the metaverse, or you can buy the real-life version and have it shipped to your home. I strongly believe this is the future of e-commerce and what the next generation will be doing to find products and buy them."
Looking for the best location in the metaverse
Why are these companies paying so much for something that only exists on the internet? The answer is: location, location, location. These are places where people will come together to discover what is going on, to attend virtual concerts and fashion shows, to discover products they might be interested in. At the same time, there is uncertainty about the future of these sites because everything is so new. Which sites will survive in the long term? Are frontrunners taking too much risk? Technologists believe that the metaverse will grow into a fully functioning economy in just a few years.
The question for companies and marketers is: is it time to take part or is it still better to wait? „These new 3D worlds will offer new opportunities for brands," says Arjan Leest, Strategy & Innovation Director at marketing agency Cogonez. „You can present your brand in spaces where many people get together. We have seen similar things happening in popular games such as Fortnite. You have to weigh the risk as new sites show up and other sites may see a decline in visitors. But it definitely offers new opportunities for brands."
Finding your way in Decentraland
Decentraland has 90.000 parcels and each parcel is a unique non-fungible token (NFT) that proves ownership. The first 45.000 parcels are owned and managed by Decentraland and include rivers, fountains, parks and forests, things that make a city beautiful. The other 45.000 parcels are owned by people or organizations that help develop the city. They can build constructions, skyscrapers or malls and organize events.
„As more people go to these cities, the more valuable the land becomes," co-founder and CEO Andrew Kiguel of Tokens.com says in a video talk with Blonity. „So, if you have parcels of land in downtown Decentraland and people are going around, the land becomes very valuable. It provides opportunities for retailers or brands that are looking to advertise or somehow reach those people. Demands continue to increase as people are using the space."
Virtual shopping streets of luxury brands
The value of virtual shopping centers will vary depending on which companies you find there. „It is similar to the real world. On Fifth Avenue or Rodeo Drive all the luxury brands have stores. Our idea is to attract those people to our virtual estate, so they can build virtual storefronts," Kiguel explains. „They can have their employees represented by avatars that can interact with people in a 3D environment. If shoppers want to check out what is happening with these brands, they can come to our district and everything in there. It is a place for advertisers and for people who are looking to buy."
Virtual shopping districts mirror those in the physical world and even go beyond the possibilities of the outer world. „In high-end shopping streets you find names like Gucci or Louis Vuitton," Leest says. „These brands have also been leading the way in creating experiences in the digital world. Not only can they sell physical products to be delivered at your home, but also digital clothing and accessories for your avatar."
Product discovery in a virtual 3D world
The pandemic has accelerated the development of virtual realms, but is not the main driving force. „We see the real world changing," Yorio argues. „It is not as easy to do product discovery in the real world as it was because of external factors in the retail market, and those were accelerated by the pandemic. The metaverse is a place to actually do product discovery the way we used to walk around downtown or in a mall."
But which target groups are brands going to find in this 3D virtual shopping world? Is it for everyone? „First of all, it depends on the devices people use," Leest says. „Using only a smartphone, you will not get the best experience. But using VR glasses you enter a new virtual world with many possibilities. It looks like a digital gaming environment. People under 35 will probably be most interested in it. Young people who are used to playing games and visiting 3D spaces will love going to a virtual pop concert or taking part in 3D shopping experiences."
The next generation of social media
The new 3D worlds are often seen as a step toward a next generation of social media. „In this new world people are interacting. They are looking around to discover what is happening. On buildings they see blocks with advertisements that are part of this new form of social media," Kiguel elaborates. „It is a much more immersive type of social media. They are holding fashion shows where you can go and a brand can display its new line. There are concerts and if you are a musician you can go there and play music for people and see what their reaction is. There are all kind of interesting things you can do."
The new spaces are transforming the internet. „With the introduction of 3D worlds, we are rapidly moving the internet from 2.0 to 3.0," Leest says. „It is too early to say which virtual worlds will dominate in the future. Sites are coming and going. The most important for brands is to experiment and not lose these opportunities."