Brands In the Metaverse: Opportunities, Risks and Strategies

Opportunities for Brand Awareness and Expansion

The metaverse presents brands with an opportunity to reach a new audience, particularly in the realm of gaming — currently the most developed incarnation of virtual worlds. Tens of millions of (mostly young) active users engage regularly on platforms such as Roblox, Decentraland and Fortnite, spending countless hours in online environments that feature limitless opportunities for brand penetration beyond traditional gameplay. These platforms include concerts, fashion shows, e-sports events, and other social and entertainment experiences. As with billboards and real-world event sponsorship, brands can reach new consumers and enhance their relevance among a younger demographic by purchasing valuable real estate and lending their names to these events or even creating their own.

Luxury designer and apparel brands have been especially ahead of the curve. Louis Vuitton, for example, introduced an interactive game involving limited edition virtual products where users can customize their avatars with digital Louis Vuitton branding as they learn more about the designer's history by collecting memorabilia. The benefit of this foray into the metaverse is indirect; while the game is free to download, Louis Vuitton can reach a younger audience in a space more familiar to them then high-end shopping districts. More closely meshing the real-world to virtual experience, Gucci hosted an experience called "Gucci Garden," where users could enter Gucci themed rooms and purchase exclusive Gucci virtual goods. Gucci described the value of the experience this way: "While fashion and art may feel out of reach, the metaverse is bringing them closer and making them accessible for millions of people, building on Gucci's quest to empower individuals and expanding self-awareness to new virtual territories." Put otherwise, the accessibility and lower price of entry of virtual goods allows Gucci to reach a new audience, while consumers get the experience of owning a product (albeit a virtual one) from an iconic high-end brand. Nike has also been especially proactive. In addition to hosting a branded environment (dubbed Nikeland) where users can outfit their avatars with virtual Nike products, play games in their new virtual apparel, and even watch digital concerts, Nike has acquired a company called RTFKT that creates virtual sneakers and collectibles for the metaverse, positioning itself to expand its virtual offerings.