Last month, Mark Zuckerberg helped further popularize the concept of the "metaverse" with his announcement that Meta, formerly called Facebook, was doubling down on the idea.
The term, which was originally coined by author Neal Stephenson in his book Snow Crash, generally refers to any immersive online environment that uses virtual or augmented reality technology — and while that may sound like the stuff of science fiction, it's increasingly a topic of interest for brands that see the metaverse as a new way to engage with customers.
Perhaps the highest-profile example of this is sports giant Nike, which last week announced a partnership with online gaming platform Roblox to create a virtual world called Nikeland.
The world, modeled after the company's actual headquarters, will include games, events, and digital showrooms of Nike products, where avatars can browse and even try on gear. The announcement came after news broke that Nike filed several new trademark applications in November, hinting that the company would soon sell virtual versions of its apparel.
As another example, Gucci over the summer also partnered with Roblox to sell virtual versions of its luxury products to young gamers in an online space called the Gucci Garden.
A number of brands have expressed excitement or interest in the possibilities of the metaverse, even as others express confusion about what exactly it is and where they may fit into it.
One thing worth keeping in mind is that while the virtual reality elements of the metaverse may be relatively new — at least when it comes to shopping — the idea of a marketplace for virtual products isn't. Video games have been in the business of selling in-game items for years.
But the fact that the buzz around the metaverse is lining up with the holiday shopping season does present a compelling question for brands: Will they try to pitch virtual items as gift options, especially as shipping delays and shortages make some physical items less available?
For companies that were already pushing into the space, the answer is a resounding yes.
"Many brands are looking closely at offering virtual goods and gifts for their holiday activations," Enrico D'Angelo, a vice president of product at Roblox, told Cheddar. "This is definitely top of mind for them, and the market is there for it."
He pointed to the example of Vans shoes, which, in partnership with Roblox, launched Vans World in September and has since gotten 50 million visits. The space markets virtual shoes, skateboards, and other apparel to gamers looking to deck out their avatars.
D'Angelo added that Roblox's user base of Gen Z gamers value their online identity more than other generations and that they see less of distinction between virtual and physical items. So expanding into the metaverse could give brands the opportunity to engage these users.
Both Vans World and Nikeland combine virtual items with new access points for buying physical goods.
"This kind of community engagement with digital goods provides a great opportunity for brands to test new products, experiment with ideas, as well as reach new consumers and existing fans at a truly global scale," D'Angelo said.
Roblox's own Avatar Shop, which is a sort of general store for the platform's users, typically sees an uptick in sales around the holiday season, according to the company.
"Once we enter the holiday season, we have typically seen an increase across most clothing and accessory categories for holiday-related items in our Avatar marketplace," D'Angelo said. "We absolutely see virtual goods becoming a larger trend, and with that, people thinking more about virtual gifting as well."
As a leading gaming platform with multiple corporate partners that take opportunities in the metaverse seriously, the company's bullishness isn't surprising.
But what about a company that has long operated in the world of physical goods?
'That Dopamine Hit'
Topps, the collectibles and trading card company, is also banking on increased sales from digital items this year and in the years to come.
"People are ready for this to be a gift," Gino Ferrazzano, marketing director of Topps Digital, told Cheddar.
The company now offers digital versions of its collectibles in its sports and entertainment categories, from its partnerships with MLB and Disney to its own Garbage Pail Kids collection.
This is also the first holiday season that Topps is really pushing non-fungible tokens (NFTs) as a potential gift option. The company now has lines of NFTs for MLB, Bundesliga, Bazooka, Godzilla, and the company's classic science fiction-themed trading card series Mars Attacks.
Ferrazzano noted that he's unsure if the holidays will drive up sales or not, but he's hopeful that customers are getting adjusted to the idea.
"I think this season will indicate if there's been too much of a digital overload or if people still appreciate that they can get things in a digital space with value," he said.
One thing that is top of mind for Topps is the gift opening experience or delivery method. In some cases, that could be an email with a link, or a physical gift card with a QR code.
"A key component to that is the animation, the pack opening experience," he added. "It's something that we've tailored over the years to make sure they get that dopamine hit, that excitement and delight when they open a pack not quite knowing what's going to be inside."