According to our president Catherine Seeds, one of the best parts of her job is learning “the next big thing” happening within the retail industry. Her latest video discusses the latest trend: Direct-to-Avatar.
Prefer to read a transcript of her video? We’ve included one below!
Catherine Seeds presents: Direct-to-Avatar
The best part of my job is learning and researching “the next big thing” happening within the retail industry. For more than 20 years, I have had a front seat for hundreds of game-changing innovations. It’s always exciting to see what’s coming next.
Hi, I’m Catherine Seeds, president of Ketner Group – thanks for listening in.
Right now, there is a huge momentum shift for brands to create strategies around direct to consumer (DTC). We all know that the customer experience is everything.
This means it is critical for brands to figure out how to create closer connections with their customers. Whether that means bypassing the more traditional retail model or even opening retail concept stores. Our very own Jeff Ketner talked about this trend in his most recent blog.
When it comes to creating closer consumer connections, the “next big thing” on the retail horizon is a step beyond the DTC trend. To be more accurate, it’s a step into the vast virtual world of avatars.
Direct-to-Avatar: changing the digital economy game
The Direct-to-Avatar term, or D2A, refers to the business model of selling products directly to shoppers’ avatars. The model sidesteps the management and logistics of sending an actual physical product to a consumer.
It was described in a recent Decode_M article, as this, “The DTC business model forever changed how we shop, cutting out the middleman. The next evolution of sales channels (D2A) will bypass humans completely, selling straight to our avatars instead.”
This might sound like a trend for only future generations. Wrong! Direct-to-Avatar is here and now. According to Crucible, Direct-to-Avatar expects to be the largest digital economy in history, topping $1 trillion during this decade.
Need further proof?
According to Nicola Mendelsohn, vice president of global business group at Meta, “Within the next decade, the metaverse will reach one billion people, host hundreds of billions of dollars of digital commerce and support jobs for millions of creators and developers.”
The complete potential of the Direct-to-Avatar business model has yet to be realized. The fashion and luxury industries, however, have certainly already taken full advantage of this movement. More on that later!
Roblox and Gen Z: a match made for the metaverse
If you are familiar with the Direct-to-Avatar trend, then you have most certainly heard of Roblox. As the biggest player in the metaverse, Roblox has more than 50 million daily active users with nearly 10 million developers on the platform.
67% of Roblox users are under the age of 16, also known as Gen Z. For fashion brands, Roblox is a perfect gateway to Gen Z – a generation whose disposable income has reached an estimated $360 billion, according to Gen Z Planet.
Brands dipping their toes into the metaverse should also be paying attention to Generation Alpha, those born after 2010. These young consumers influence $500 billion in purchases per year.
As Christina Wootton, VP of global brand partnerships at Roblox says in NYLON, “Self-expression is a huge part of any shared experiences, be it in real life or in the metaverse. The Roblox community, over half of which is over 13 years old, is very engaged, spending billions of hours on the platform every month, and digital fashion plays a hugely important role in our community’s creative self-expression.”
According to Wootton, 25 million virtual items were created by the Roblox community in 2021 alone, and over 5.8 billion virtual items (both free and paid) were acquired on the platform.
Becoming fashion-forward with D2A
Given their proclivity to all things digital, it’s easy to understand why the Direct-to-Avatar model is so attractive to younger consumers. This is especially true for the fashion industry. It creates an easy way to access and engage with younger demographics. It also provides a more impactful way for companies to connect with their shoppers beyond digital ads and content.
Here are a just a few examples of fashion brands releasing D2A digital collections, as featured in a recent Wunderman Thompson blog:
- Ralph Lauren released a 50-piece digital clothing collection in August 2021, available for purchase in social networking app Zepeto.
- American Eagle announced a digital clothing collection for Bitmoji avatars in July 2021.
- Gucci and The North Face released a joint collection for avatars on Pokémon Go in January 2021.
- In March 2021 Gucci released virtual sneakers that can only be worn with AR, using technology developed by Wanna.
- Digital fashion house The Fabricant has partnered with brands like Adidas, Puma, and Tommy Hilfiger to virtualize their garments.
Most recently, youth retailer Pacsun, announced its first dedicated experience on Roblox called PACWORLD, a fantasy interactive mall experience where players are the owner and operators of a new mall. Their objective is to make the mall as profitable and popular as possible.
Is Direct-to-Avatar the future of shopping?
Time will tell if the Direct-to-Avatar movement will stick. Looking at the stats, however, the odds are certainly in its favor. Digging into this topic has encouraged me to borrow my son’s Oculus headset and journey into the world of the metaverse.
The Ketner Group team will be keeping an eye on this trend as it continues to develop. For brands, Direct-to-Avatar brings endless financial and customer loyalty possibilities.
As WGSN Insight’s Cassandra Napoli said recently at NRF 2022, “The possibilities are truly endless for brands in this avatar economy, as avatars will extend the scope of storytelling for brands. And while digital fashion is not a new concept, it’s gaining momentum. It provides brands with a potentially more sustainable and inclusive — not to mention lucrative—way to reach consumers.”
Thanks for joining me today. Let’s keep the conversation going!
Get in touch today to find out how our retail expertise can help drive brand awareness and support your marketing goals.
Austin
New York
