Metaverse Shopping 101, from the maker of the Roblox store for Forever 21

The metaverse – a virtual world where people repeat their true identities or have the freedom to live as a completely different person – is coming. For retailers, it can be a revenue center where virtual merchandise can help the residents of the metaverse realize their vision for themselves.

But as Meta has shown in its latest financial statements, it also carries financial risks. Its metaverse division, Reality Labs, Billions of losses were recorded over the past two years.

Most potential Metaverse users, retailers, and marketers have many questions about how all this works. We asked Justin Hochberg, founder and CEO of Virtual Brand Group, to explain how this emerging technology works. His agency built Forever 21 Shop City, a virtual retail setup in Roblox that is itself a social gaming environment — not technically a Metaverse, but a prototype that gives retailers a taste of things to come.

In Shop City, customers buy virtual clothes for their avatars and create their own Forever 21 stores. In the Roblox environment, customers receive coupons to purchase the same physical item – for those who wish to pair up with their Roblox avatar in real life.

Describe the metaverse for retailers and marketers who don’t yet understand the concept.

Justin Hochberg: Let me describe it to you on a deep level. The first thing in the “metaverse” isn’t whether it’s Roblox, Fortnite, Meta, Layer2, crypto or NFT.

Justin Hochberg

Marc Andreessen invented the Mosaic browser 25 or 26 years ago. Then I started seeing URLs on billboards.

People were like, “What is this?” And they were like, Can you explain the Internet? What is that ?”

I would say, “That’s what you want it to be.”

“Well, who do you belong to?”

“Nobody.”

“What can you do with it?”

“what ever.”

None of these answers were helpful at all. Now, 26 years later, enter the word metaverse We are in the same place. Three years from now, you won’t wonder what the metaverse is, just as you won’t wonder what the Internet is. Internet, who cares? What interests you is Facebook, Amazon, Netflix, whatever. This is what people understand. People don’t understand it because they haven’t used it yet. It’s just an idea, not “Hey, can I get a book cheaper and faster?” It’s the Internet.

Let’s go back a little. So what is the Roblox experience for CX managers who might be wondering if they would go in that direction.

Hochberg: Any kind of brand — whether it’s in fashion, television or movies — if you’re selling to consumers, you want to be where your customers are. For many people, that means you have some kind of shop, whatever it looks like. You have a form of e-commerce, you have a form of social media, and you probably do a bunch of other things – an end-to-end channel – to meet your customers wherever they are. Metaverse is a very complex thing, but everything else is where there are already many consumers. But it’s – and here’s the trick – better than your store, your electronic communications, and your social media. It’s the most effective sales channel since the advent of selling things you’ll never find.

why?

Hochberg: Let’s approach it in three ways: The first thing is that it’s a frictionless customer experience. Going to the store is kind of a flawed business model. I have to go – now is the time. I have to stand up. I have to find the store. I have to walk into the store. I have to find the article. I have to wait in line. I have to reverse everything. The average time people spend at a Home Depot store is 5.9 minutes — that’s how much time they actually spend making a purchase the outside from the shop. You want to get out as quickly as possible. E-commerce removes a lot of that friction because I don’t have to do half of it. If I search on amazon and find it has it or not, I buy it or not and that’s okay. So in terms of transaction efficiency, it’s great but it’s not proven. Incoming and outgoing transaction. I have no attraction to the transaction.

Roblox Forever 21 takes time – in a good way. It’s insanely sticky. Its marginal cost is zero. So it is the most profitable thing you can sell. We’ve simulated the world’s #1 retailer: Disneyland, which is just an ultra-luxury retailer. You’re actually in flight only about 18% of the time. Most often it is about extracting money – when buying a pass, a mug, a T-shirt, lunch. Not only do I want to spend time there, but I will spend all day there to give you my money. I’m going to spend the whole week sailing to give you my money. It’s sticky. Stores have been pursuing experimental retail for decades. Barnes & Noble started by getting comfortable sofas to read on. Starbucks has given you free Wi-Fi. Chanel offers you champagne and Evian water. This is all about experiential marketing. Still not sticky. Disneyland sticky.

We’ve taken the Disney model and the experience you want to keep. We transform a retail brand into an entertainment experience. People come to Roblox because it is social.

Forever 21 virtual outfits
Forever 21 offers coupons to its customers to discount physical clothing items that are similar to the metaverse shopping apparel they have purchased.

Why Gen Z wants to buy pixelsUnlike material things?

Hochberg: Why would you want to buy something? Take the average person. They buy a lot of things. They buy T-shirts, sneakers, and sweatshirts. They may buy suits, ties, or whatever they buy in their daily lives. Why doesn’t everyone dress like Mark Zuckerberg, wear the same jacket every day? Most people don’t. They have clothes to go out on Saturdays and a costume to clean the yard. They can wear the same outfit, but they don’t. why then? Because as human beings we want to present ourselves in a certain way in certain circumstances.

The #1 trait of Generation Z is self-expression. How do I feel? How do I want to express myself? In the real world, we are restricted. … in the virtual world. You can be whoever you want to be and are expected to express yourself as you wish. I can wear a dress, I can be a fry, and I can share. I can be cyberpunk. I can do this differently every day, or with different groups of friends.

Here’s the other thing: the real world is hard. Most people can’t visit the Grand Canyon, let alone buy a pair of Nikes or even Guccis. In the virtual world, we can recreate the Grand Canyon, the Eiffel Tower, the Taj Mahal, or an NFL game. You can own Nike sneakers, a Forever 21 wardrobe, and a Gucci wallet. So the reason the metaverse is so powerful is because it has massive scope, it interferes with ambition, and it has a world where you socialize, rather than engage. This is why people spend time there and buy things there – they want to present themselves in their own vision of how they are understood.

Let’s say a Roblox game goes offline, either by choice or necessity. Is there a way the people who bought the stuff can take it to another platform, or does the virtual clothes fall off the ship?

Hochberg: People think Roblox is what it means. This is not the case. It is a social gaming platform. Facebook is a platform, and you go in there, and you build your profile. I can’t do anything with it except put it on Instagram and WhatsApp. closed.

Roblox is a 3D version of it, in which there are games, houses and games. It’s not technically part of what we call Web 3.0. Web 3.0 is about the consumer’s ability to own the item, not the platform. This is why when you buy something in a decentralized sandbox, when you go to other platforms, you own it and no matter what happens to those worlds, you still own it. Just like when buying Nike sneakers, if Nike goes bankrupt, you still own the sneakers. It’s Web 3.0. The infrastructure allows you to bring it anywhere, it is on a publicly transferable blockchain technology protocol that allows you to own the asset.

How do NFTs get there?

Hochberg: It’s just a digital asset on the blockchain. That’s it, whether it’s a piece of art, a sneaker, a movie clip, a LeBron James highlight, whatever. Many people now see it as art, digital photos, or Bored Ape Yacht Club. A lot of it is very speculative, which is why so many people lose money. Sometimes what they see is a headline like “Snoop Dogg sells NFTs for $44 million”, but most NFTs don’t.

For marketers and technology leaders, what is the real opportunity for the metaverse? to earn income? To increase brand awareness? Monday? And how do you get started without spending a lot of capital until you get fired?

Hochberg: Using the metaverse as a sales channel unlocks entirely new revenue at no marginal cost. I sell millions of dollars’ worth of Forever 21 costumes that cost me $10,000 to make a line, and then every item has zero marginal cost. This item can live forever without defects or problems in the supply chain. no answer. It can live on Roblox for as long as Roblox is around, without any degradation.

You can’t leave a white shirt in the store. You do not have storage space. It will deteriorate, it will get dirty. Inexpensive virtual objects to create, with no marginal cost. You want to be where your customers are: 200 million people play Roblox every month. People spend millions of hours per month in Forever 21 Shop City, which goes beyond social media.

Whatever you’re building in your metaverse, building a NF T or a virtual fashion line could cost you a few thousand dollars, or it could cost you half a million dollars. It’s not very expensive stuff compared to what people pay for TV advertising or activations in South by Southwest or anything else. The key is that if you go in now, it’s relatively inexpensive. Not only can you generate new revenue, but you can also create new connections with consumers.

These questions and answers have been edited for clarity and brevity.

Don Fluckinger covers enterprise content management, customer relationship management, marketing automation, e-commerce, customer service, and enabling technologies for TechTarget.

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