The metaverse provides opportunities for luxury brands to grow, but Trevor Thomas, Vice President of Strategy at VMLY&R Canada, explains why he expects these brands will remain ultra-cautious to avoid mis stepping and damaging their brand image in the process.
Aside from a spellbinding turn as the Pirate King in a 1993 primary school production of The Pirates of Penzance, I have never been one for musicals. And yet, coincidentally, that same year I was surreptitiously introduced to another musical that would stick with me to this day: The Music Man. (Disclosure: it wasn’t the actual show or film I saw, it was the monorail episode of The Simpsons.)
In the original, a travelling con man, Harold Hill, convinces a town that he alone can bring about significant change and improve the townspeoples’ lives through the creation of a boys’ band program. He’ll provide all the uniforms, instruments and instructions, and even guarantees he can teach all the boys to play.
The problem, though, is he has no musical knowledge and plans to skip town before delivering on his promises.
The good old “professor” came to mind recently as I continued to read about the ongoing commitment of Mark Zuckerberg and Meta, née The Facebook, to the metaverse.
They promise to “bring the metaverse to life and help people connect, find communities and grow businesses.” Sound good? Well, there’s more! They also plan to “let you share immersive experiences with other people even when you can’t be together.” Significant changes to everyday life that can only be provided by one man. Sounds familiar.
And, while the Meta version is – and will be – far from the only iteration of the metaverse, the underlying equation of nearly every vision is remarkably similar:
Massive tech corporation + walled-garden ecosystem + pay-to-play + advertising = metaverse.
In her phenomenal piece, The metaverse doesn’t have a leg to stand on, Katie Knibbs states the metaverse is “understood by the world’s profiteers to be a frontier created specifically to be colonized.” Its purpose, she concludes, is “wealth extraction.”
Wealth extraction of the users. Wealth extraction of the brands who want to reach them.
Last year, I wrote a piece about my personal introduction to early stage metaverses and – with tongue very much planted in cheek – I imagined a world where insurance companies could become the heroes of the metaverse by providing real world protection to the virtual masses.
My opinion has not changed regarding personal insurance in this space, but as the plans of Zuck and his ilk come into focus, I believe it’s time for brands to channel their inner Marian Paroo and protect themselves – with a healthy dose of skepticism.
In particular, I’m thinking about luxury brands, who seem to have been identified as first-movers in the space. Balenciaga has already made character skins for Fortnite, there’s a Gucci Garden on Roblox and Dolce & Gabbana participated in Metaverse Fashion Week, on Decentraland.
At first glance, the appeal makes sense. The metaverse embodies luxury’s three favourite Xs: expensive, exclusive and excessive. But I find it hard to believe that they would omit some simple audience profiling before committing their hard-earned marketing dollars.
Fortnite maintains an average daily rate of about 30 million players, which is a huge audience, but that audience is about 90% male and 63% 18-24.
Roblox has about 60 million daily players, a male-female split of nearly 50-50, but 67% of players are under 16.
Over in Decentraland, the current number of daily active users is around 8,000. While it’s been described as “full of cool Web3 people doing cool Web3 stuff,” it’s still very new and is trying to take a more decentralized approach to the metaverse. So, there’s potential.
As for Meta’s Horizon Worlds, well, it’s probably best you just enjoy this play-by-play of the virtual holiday party thrown by Wired’s Eric Ravenscraft.
Potential exists throughout, but can’t be the lone draw for typically ultra-cautious luxury brands who are on board. There’s a reason why you won’t find Prada stores in rundown strip malls, or Hermes seals on dollar-store products. Brand image is paramount, and even the slightest misstep can knock them off their pedestals.
So, how to explain Burberry’s decision to sell a virtual handbag in Roblox for 800 Robux (the equivalent of about $9.99)?
I’d like to suggest these brands are experiencing a version of something we’ve all encountered, but, in their case, related specifically to the metaverse. Let’s call it FOMOM. Fear of Missing Out on the Metaverse.
Charles Hambro, co-founder and CEO of GEEIQ, a firm that helps brands navigate the metaverse, believes all this enthusiasm is linked to perceived errors of the past. He claims because these brands were slow to the web and social media, they’re fearful of being late to this new virtual party.
Luxury runs on the bleeding edge. You’re first, or you’re last. There’s often nothing in-between, so the fear of falling behind is far from imagined.
When it comes to a new luxury item or hot fashion trend, the risk of being late can be catastrophic. Whereas the reward in being first can lead to exponential growth for the value of both the brand and the business.
The risk/reward for luxury brands in the metaverse is a completely different equation because of the addition of a new variable: the platform.
In this instance, it’s the platforms (and their respective tech corporations – and CEOs) who risk being left behind. It’s their risk/reward equation, and they’re keen to sell it to brands to build their own image.
And like Harold Hill before them, they are selling hard.
Even though they’re not entirely sure what they’re selling, they’re well-aware of the FOMOM, and keen to capitalize on it in any way they can.
Will it all work out? Will there be a happy ending for luxury brands and the metaverse as there was for Marian and Harold? It’s possible, maybe even likely. But, if it does, it won’t resemble a seasonal fashion trend. It will be here to stay, providing brands a ton of time and space to experiment and grow.
So, be skeptical. Be patient. And don’t let someone else’s desire to be first impact your ability to be right.