Brands Are Already Making Millions in the Metaverse. Here’s What Business Owners Need To Know.
Entrepreneurs who follow Gen-Z into the metaverse could gain a competitive advantage.
If you’re still skeptical about the metaverse, you certainly aren’t alone. According to a recent survey, 55 percent of adults with yearly incomes over $100,000 said they were not interested or excited about the concept, while 37 percent said they were primarily worried about it. Only 6 percent of respondents claimed to be excited about the metaverse.
Those numbers might not seem encouraging, but it’s important to remember that one of the most popular metaverse platforms currently available, Roblox, averages more than 54 million daily users, the vast majority of whom are Gen-Z or younger. Those users have cumulatively spent more than $1 billion on digital items such as outfits or accessories designed to be worn by player avatars in addition to in-experience upgrades and various other paid features.
Kids and young adults nowadays are incredibly literate in social media and technology, and they’ve already made their interest in the metaverse clear, says Winnie Burke, senior director of global partnerships at Roblox. In the platform’s creation engine, dubbed Roblox Studio, players can use Lego-like digital “blocks” to build virtual worlds from scratch, and then share those worlds online or jump into other environments with their friends. Over 30 million of these virtual worlds have been created so far.
In addition to creating worlds, young people are also showing a keen interest in customizing their virtual appearances. Around 20 percent of Roblox users change their avatar’s appearance on a daily basis, according to Neha Singh, CEO of Obsess, a New York City-based company that builds and designs virtual worlds in the metaverse. Singh added that a recent Obsess survey found that nearly three-quarters of Gen-Zers have purchased a digital item for their avatar within a video game.
In December 2021, clothing brand Forever 21 launched Shop City, a virtual playground on Roblox where users can shop for virtual clothes and curate their own stores by setting up displays, creating kiosks, and choosing designs to feature. Forever 21 CEO Winnie Park says that the key to engaging younger consumers is to create a presence in spaces that they already inhabit and then give them tools to express themselves.
“We’re really trying to focus on becoming more intimate with our Gen-Z target audience, or people from 9 to 22 years old,” says Park. “I think it’s critically important that the brand exists where that demographic already is, which is on Roblox.”
While Park says that the main goal of the company’s foray into the metaverse was to experiment and create a presence for the brand in spaces already inhabited by Gen-Z, it has also helped drive sales: In the Shop City Roblox experience, Forever 21 created a virtual black beanie hat that proved so popular the company will physically produce it and sell it in their stores. According to Park, the virtual beanie is one of the company’s best-selling items of all time, and is on track to sell over 1.5 million units in the metaverse.
Another reason to try out the metaverse yourself: Gen-Z highly values authenticity. If young people feel that the only purpose of your metaverse experience is to sell them things, you could risk damaging your brand. Park says that brands should use the metaverse primarily as a way of building brand loyalty, which in turn can lead to sales.
But how can brands direct users who aren’t already brand-loyal to their virtual experiences? Burke says that Roblox is working on implementing sponsored search results and a recommendations system that will allow brands to more efficiently reach their intended demographic.
Entrepreneurs who are interested but skeptical about the metaverse should download Roblox on their phones and experiment, according to Park. “I think you have to experience it directly in order to go, ‘Okay, I understand the parameters of what I can do here, and here’s what I think I want to do.'”
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