Foresight 13: Direct-to-avatar business models + how brands can help Gen-Z co-create the Metaverse

A bi-weekly newsletter diving into the concepts, people and brands shaping the future of retail and entertainment.

Welcome back to Foresight!

The direct-to-avatar (D2A) business model is a concept I’ve been thinking about a lot as virtual collections and product launches continue to pop up. This week we’re looking at why this is a key strategy and how quickly the mass-market is embracing it.

On the topic of staying relevant, Gen-Z is looking for more co-creation opportunities in the Metaverse and brands can make that happen. Christina Wootton, VP of brand partnerships at Roblox outlines creative strategies for consideration to ensure brands keep up with Gen-Z in the real and virtual worlds. 

Lastly, an article titled Apple and Facebook are coming for your face next at the bottom of this week’s newsletter is a great opinion piece if you have extra time. I went into the article expecting a dystopian opinion on the future of devices for our faces and was pleasantly surprised. Although the writer is skeptical about certain aspects of “wearing computers on our faces,” we later learn they’ve been meditating in VR and can’t seem to stop. A lighthearted read while asking the important questions we didn’t understand or know to ask when we were introduced to the smartphone.

Questions or comments? Reply to this email—let’s chat!


The direct-to-avatar (D2A) business model

In a recent report from Wunderman Thompson, the idea of direct-to-avatar (D2A) is explored as the next big business model predicting this as a key area of strategy for brands in the near future. D2A digital collections and product releases aren’t new and are being adopted more regularly by established fashion and auto brands—luxury and mass-market—as they look to reach new audiences and embrace new revenue streams. 

Kerry Murphy, founder and CEO of digital fashion house The Fabricant believes the future of consumerism lies within virtual products. “People are going to start seeing value in digital items and realize that they’d rather interact with a digital item, or have an infinite wardrobe of digital fashion items but a very limited wardrobe of physical items.” With digital ownership on the rise, brands must understand that the Metaverse is an opportunity for brand integration, expansion and expression on a mass scale. Murphy believes the transition in more value being placed on virtual items has already begun. Avid gamers already engage in daily digital habits such as dressing their avatar in the morning. Once interactive experiences that have a daily functional value beyond gaming and entertainment appear more regularly, we’ll see D2A move outside the gaming world. Functional values that could begin pushing virtualized daily habits that require selecting a digital outfit could include work, socializing and video calls to name a few.

On average, a digital house is worth $76,000, original digital art is worth $9,000 and a digital designer handbag is worth $2,900. As brands continue to see digital collections quickly sell out (NFT marketplace RTFKT sold 600 pairs of digital sneakers in seven minutes) and digital products sell for thousands more than the average costs, D2A will become a necessary business model in the future.

How brands can help Gen-Z co-create the Metaverse

It’s no surprise that Gen-Z, hyper-connected and highly opinionated individuals who are experts at expressing themselves through digital creative tools, responded to a recent survey from the National Research Group saying they were “excited about participating in experiences that change in real time and the ability to create anything, anywhere.” The essential factor in staying relevant with this generation is to seek out and test opportunities for co-creation. On user-generated platforms, co-creation is already an organic part of community interactions where anyone can imagine and produce ideas, which will become an expectation from Gen-Z. Christina Wootton, VP of brand partnerships at Roblox has a few ideas on how brands can build interactivity and co-creation into their strategic initiatives. 

Grant users ownership over how they engage with branded experiences.

A strong recent example of this is the Twenty One Pilots virtual concert. Attendees were offered multiple avenues for engagement, such as selecting the order of the setlist and taking part in an interactive scavenger hunt where the user could teleport between the concert and other virtual worlds within Roblox.

Provide creation opportunities as part of the virtual branded experiences.

Tapping into the desire for self-expression, a characteristic often seen in virtual experiences, using personalized design is another way to go about providing co-creation opportunities. A strong example of this is the virtual Vans World experiment that offered users a shoe customizer to create shoes for and worn by their avatars. 

Establish a sense of shared experiences through community interactions.

One of the primary goals of the Metaverse is to bring people together in an immersive way such as through shared and interactive community activities. The recent In the Heights virtual launch party welcomed users into Washington Heights to learn dance routines from video tutorials taught by the cast. A virtual flash mob was then hosted (and open to anyone), which saw over 900,000 participants in a single day.

“When co-created content and experience drive a brand’s strategy, users transform from passive viewers to active participants,” says Wootton. When consumers feel like active participants, loyalty to and ownership of the brand they choose to engage with increases. Embracing new forms of consumer engagement will help ensure brands are capturing the attention of Gen-Z while guaranteeing their relevance in the real and virtual worlds.


Apple and Facebook are coming for your face next

Balenciaga launches on Fortnite: What it means for luxury

These startups are creating NFTs and digital swag for the Metaverse middle class

Dior enters the Metaverse with customizable avatars

Influencers are wearing digital versions of physical clothes now