Foresight 19: The virtual real estate rush + the new key to consumer loyalty
A bi-weekly newsletter diving into the concepts, people and brands shaping the future of retail, entertainment and connectivity.
Welcome back to Foresight!
There’s a land rush happening in virtual worlds, where developers are snapping up real estate to build immersive, virtual shopping districts as the future of e-commerce. The Sandbox and Decentraland have become leading platforms in the space and a new area of focus for brands and designers, as the virtual platforms enable people to buy, rent out and develop virtual real estate, including stores and event venues. We explore this more below and why brands should be paying attention.
We’re also discussing how NFT purchases are increasingly unlocking premier access and memberships for consumers, and how this is bringing a new layer of exclusivity and luxury to the digital world.
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IDEAS, INSIGHTS & FORWARD-THINKING PERSPECTIVES
Should brands be paying attention to the virtual real estate rush?
In hopes that empty patches of virtual real estate will someday be the foundation of successful shopping districts, people and brands are spending millions on digital plots of land. In 2021, a subsidiary of the crypto-investment site Tokens.com called Metaverse Group spent $2.4 million on a large plot in the Fashion Street district of virtual world Decentraland, with other decentralized networks following with similar purchases. These deals are being compared to past retail land rushes such as developers buying up farmland in the 1960s and Soho’s transformation into a luxury shopping destination. Brands haven’t rushed to invest, with a few exceptions. Adidas recently purchased real estate in The Sandbox, which lets people and brands buy and develop virtual real estate, and is working to fill the space with experimental moments and exclusive content. Gucci also recently announced on Discord that the brand secured land in The Sandbox to create an interactive fashion experience based on Gucci Vault. Although no participating brands have been announced yet, Decentraland will host a Metaverse Fashion Week during which a range of luxury and high street brands and independent designers are expected to show virtual goods, some of which can be purchased both digitally and physically. “If you think about cities in general, in New York you have Fifth Avenue and in LA you have Rodeo Drive. We want to create the equivalent of those streets in the metaverse,” said Andrew Kiguel, co-founder and chief executive of Tokens.com.
The general vision for these shopping districts is to take e-commerce from two to three dimensional, using capabilities seen in video game development to create modernized online shopping destinations. “At some point in the next year to five years, they will need to have some sort of brand presence in these virtual spaces,” says Emma Chiu, global director at Wunderman Thompson Intelligence, the consultancy and creative agency’s innovation think tank. Although renting a virtual store may be more cost-effective than a physical one, the time-consuming process and technical capabilities required to build these experiences need to be factored in. Al Dente, a creative agency that consults with several luxury brands, has secured real estate in The Sandbox to offer brand clients a testing ground. “It was the same thing when e-commerce was coming out,” says Al Dente founder Patrizio Miceli. “They said, ‘Look, we cannot sell things on e-commerce… Everybody is selling now on the internet and it feels very natural.”
Are NFTs the new key to consumer loyalty?
Brands across industries are leveraging NFTs to give consumers exclusive access to products and services which poses the question - are NFTs the new key to consumer loyalty? From exclusive restaurant access to lifetime admission and one-of-a-kind products, here are a few examples of how NFTs are unlocking the next era of consumer loyalty.
Flyfish Club, the first NFT restaurant in NYC will open its (physical) doors in 2023 as a members-only restaurant where guests will pay using cryptocurrency for their membership: an NFT itself. A relatively modern concept for the dining industry—the membership could stand as a true “asset”: users may be able to lease, sell, or use their membership on a monthly basis.
Coachella launched an NFT marketplace earlier this year with each purchase of the Coachella Keys Collection, earning the purchaser lifetime access to the festival. Exclusive perks are also available to buyers for the 2022 festival, including a celebrity chef dinner and front-row access to events.
PATRÓN unveiled its first NFT: a limited edition Chairman’s Reserve, earning the buyer a one-of-a-kind physical bottle of the limited-edition exclusive blend.