The building blocks of the metaverse and NFTs are in place. Coresight Research estimates that the digital innovations market could be worth $100+ billion by 2023, driven by hyper-growth in crypto, the metaverse, NFTs and other related DeFi (decentralized finance) technologies. Seventy-five percent of retailers and brands will have a presence in the metaverse by 2025, and according to Mark Zuckerberg, this next platform will be even more immersive than what we have now. It will be an in-bodied internet where consumers will be in the experience, not just looking at it.
A recent Retail Marketing Society webinar explored the implications of this platform for the retail community. Subject matter experts were Robin Lewis, CEO, The Robin Report; Marie Driscoll, Luxury Research Analyst, Coresight Research and Andy Griffiths, CMO, Cult&Rain.
Why the Metaverse
Lewis opened the discussion with some statistics from research conducted by Fortune Analytics. This study found that 37% of U.S. adults say they’ve heard nothing about the metaverse, 48% said they have heard a little and only 15% have heard a lot. Second point, 0.9% of U.S. adults say they’re extremely interested in using the metaverse/3D virtual world. Another 13% say they’re very interested. Twenty-nine percent say they are somewhat interested. Fourteen percent of U.S. adults say they’ve used the metaverse/a network of 3D virtual worlds while 86% said they had not. Twenty-seven percent of adults would like to shop in the metaverse. Among millennials and Gen Zs, that number is 32%. Among Baby Boomers and older, 71% wanted nothing to do with the metaverse.
In its Retail Reset Framework, Coresight Research highlighted the metaverse as a key trend for 2022. It predicted that the world’s biggest consumer brands would be leading the charge to the mass appeal of the metaverse and related transactions like NFTs. However, the development of the metaverse depends on essential technological infrastructure that’ll make it fun for consumers to be there.
“If the early days of e-commerce taught us anything,” said Driscoll, “it’s that retailers need to be where their consumers are even before their consumers get there.” Retailers and brands need to pay attention to the metaverse.
“The gist of it,” continued Driscoll, “is that the barriers to entry are driving adoption. New VR sets will make it even more exciting, and shoppers will enjoy immersive experiences. It is generational, 13- to 24-year-olds are really the most familiar and 75% of Gen Zers have actually purchased a digital asset within a virtual game. 60% of Gen Zers believe that brands should be selling on Metaverse platforms.”
Griffiths concurred. “There is a generation of our children … and our children’s children who are going to live parallel lives. They’re going to have a digital life, and they’re also going to have a real life, and they’re going to be interchangeable.”
A Luxury Brand at the Forefront
Cult&Rain is a disruptive digital luxury fashion house brand that merges innovative NFT art with exclusive high end physical redeemables. The brand saw that within the NFT and Web3 community, there were digital assets that weren’t being tied to physical products, particularly in the luxury fashion space. To date, they have launched two “phygital” collections — collections that transcend both the physical and digital worlds. Genesis is a collection of 2,000 4K animated NFTs which collectors can redeem for an identical pair of Italian-made luxury sneakers. Drop 001 is a collection of varsity jackets with both digital and physical versions.
To engage the Web3 community, collectors (not customers — the appeal is to people who want to possess multiple NFTs) can select a unique patch artwork design from pioneers within the Web3 space: Deeze, Wonderpals, Robotos, The Heart Project and HPPRS. Although, at this point, the majority of collectors are male, Cult&Rain does not want to be a singular gender brand. Therefore, the Varsity Jacket collection was deliberately designed to appeal to all genders.
Opportunities for further collector engagement are in the works. Cultr World will essentially be a gateway to multiple experiences in the metaverse, including Cultr Lounge, where it will host meetings, town halls, discussion groups and a Cultr Shop, where collectors can collect and buy physical products that correspond to their digital wearables.
Revenue Streams
“In terms of revenue,” said Griffiths, “the future of digital brands doesn’t start and stop with physical products. We have identified four different revenue streams: 1) digital assets tied to physical products; 2) digital only. Selling digital collections for avatars to wear, to be worn in gaming, to be interoperable with different metaverses; 3) physical only, which we’re also working on now, where we will have 300 physical sneakers, different to the Genesis Drop, same mold, same styles, but different colorways to sell within traditional platforms, traditional eCommerce platforms and 4) trades and revenue that you get from the secondary market by trading NFTs.”
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