With all the buzz around the Metaverse, what are the opportunities for your brand to expand and find success in this growing, virtual space?
Luxury and global brands like Gucci and Nike have been early adopters in the Metaverse marketplace. But, with a critical mass of users spending an increasing amount of time, and currency, plugged in and purchasing virtual products, there are endless ways in which smaller brands can monetize their goods and expand their brand awareness.
Dan Wallace-Brewster is the Senior Vice President of Marketing at Scalefast. A pioneer in ecommerce for entertainment and consumer brands, he is the perfect resource to help you understand, and incorporate, the Metaverse into your future brand strategy.
Don’t miss this episode or your chance to get in on this young and exciting market!
Mentioned in this episode:
Voiceover: This is Performance Delivered. Insider secrets for digital marketing success with Steffen Horst and Dave Antil.
Steffen Horst: Welcome to the Performance Delivered Insider Secrets for Digital Marketing Success podcast, where we talk with marketing and agency executives and learn how they build successful businesses and their personal brand. I’m your host, Steffen Horst. The topic for today’s episode is how retail brands need to approach opportunities in the metaverse. Here to speak with me is Dan Wallace-Brewster, who’s the Senior Vice President of Marketing at Scalefast an end-to-end digital commerce solution provider. Dan is a pioneer in the development of digital marketing and E commerce for global entertainment and consumer brands. Through the planning and execution of digital strategies over 20 years, Dan and his teams have repeatedly driven marketing growth and sales of events, travel, home goods, and apparel among other categories. Dan, welcome to the show.
Dan Wallace-Brewster: Thank you. Nice to meet you.
Steffen: Now Dan, before we explore today’s topics, tell our listeners a little bit about yourself. How did you get started in your career? And how did you end up at the point where you are?
Dan: Yeah, it’s been an interesting path. I started my career actually in sports marketing. And it happened to coincide with the development of ticket sales online. I was a big part of installing the platforms to be able to sell tickets and merchandise for sports teams. And eventually I figured out that I wasn’t in the sports business anymore. I was in the E commerce business. So I worked with GSI commerce and eBay in my career, and really worked with every kind of brand from big box retailer to a brand and manufacturer premium apparel. And so I’ve really built a good understanding of what brands and retailers need from an E commerce ecosystem to be successful.
Steffen: Now today’s topic is about the metaverse. It’s something that you see on your screen, whether you’re targeted by ads via digital property, or Facebook talks about it. In your own words, Dan, what is the metaverse?
Dan: Well, it’s been quite the buzz word the word lately. But it’s really existed for a long time. And it’s the artificial existence of people and things in a virtual world. Lately, brands have been more involved and certainly a brand like Facebook or now called meta deciding that they want to get invested in it creates a critical mass of users, or customers who are willing to spend time in that type of virtual reality. And when there’s that critical mass, you’ve got customers. And where customers are, brands want to be. So we’ve seen a lot of investments from name brands, international luxury brands, like Gucci, Chanel, Nike, that are investing very heavily in what the metaverse is and what it could be.
Steffen: Interesting. Now another word or abbreviation that that is thrown around a lot are NFT’s. Can you explain where NFT’s and virtual goods actually fall in the metaverse?
Dan: Yeah, so for a long time, the publishers or the really it’s been gaming publishers that created the metaverse. They have built currencies and exchange on the worlds in which creators can build their own products, which are usually games that people buy and invest those currencies in. And as they’ve done that, there have been products that you can’t touch, feel, smell that those currencies are exchanged for. Usually it’s a skin or a uniform or costume that customer or the player can use in that universe. And that has really translated into a great deal of money for those publishers. And what we’re seeing is that that has created user adoption acceptance at a level that’s never been seen before.
And I think a great example is in my 10 year old came to me a couple years ago and he said, you know dad, I want $50 for roblox. I laughed at him I was like so what you can buy something that you’ll never touch, feel or smell. Didn’t make any sense to my mind. And over the last couple of years, I’ve I’ve learned more about the metaverse and how virtual products can gain value and and have a tangible value to customers or players in the in the real world. And I’m more accepting of it. I’ve, I’ve evolved on the topic you might say. So, as I’ve done that, the guy who has the money in the household is more willing to pay money, pay real greenbacks into the metaverse to for a virtual currency that’s exchanged for virtual goods.
And now that that customer base is there, there is this expansive opportunity for retail to take advantage of it. And so virtual products were really the first step. And then along came NFT’s. And NFT’s non fungible tokens are the, I would say, a virtual attachment, or virtual equivalency of things that you find in the real world. This is to date, been works of art. It could be video or an image, or music, a piece of music, things that are uniquely identifiable. And NFT’s became a path to transacting or changing ownership of those creative works. And the secondary market or the exchange of these NFT’s has really created a lot of buzz. Because the the, I guess, appreciation for a lot of these early entrepreneurs, has been eye popping. I mean, you have stories of 16 year olds becoming millionaires almost overnight. With very, I would say, pedestrian works of art.
But so you can, you can only think about what a masterpiece would create in a virtual space. And now you’re seeing NFT’s attached to pieces of real estate or stars and planets or other things that you would have thought there would have been known or shared value of but in a virtual space or the metaverse, there is literally no limit to what can be bought and sold. As long as the platform respects the ownership and the license to that thing that is bought or sold. And that’s where we’re finding the challenges. You need universal recognition of ownership for anything to truly be owned.
Steffen: Interesting. Interesting. Now, for for companies like Nike, to start investing in the metaverse and and kind of paying attention to it. Something must have changed. So is the fact that more and more people move to the metaverse, the only reason why all of a sudden, these these big brands are going there, or are other other reasons?
Dan: I think there always has to be early adoption. And Nike has actually been a very early adopter. In the virtual world, they’ve seen the potential. And I think it’s been accelerated by COVID and supply chain problems. The harder it is to access physical goods, the less people go out and experience the the physical world, the more appreciation they get for things that they can access from their sofa. And certainly in Nike’s space that is very meaningful, because they increase, they benefit from people being very active and being out in the world. It’s it’s core to their brand. But if you talked to my marketing executive at Nike and said your total addressable market was all the runners in the world, or all the people who are actively exercising in the world, they would say, okay, you know, that’s maybe 40% of the addressable market.
And then add all of the people who aren’t active, who don’t run, who would normally not wear Nikes. But you can create a Nike branded skin in a game of fortnight and make just as much money or sell it for just as much money and infinitely higher profit, and also extend our brand. That’s going to be pretty appealing to those marketing executives, and the operations company and the CFO, everybody who’s involved in that organization, and that corporation is going to be excited by that. It’s pure profit, to be honest. Now, everything I say today is certainly not an advocacy for this path. I think there’s a lot to be concerned about as we move in this direction, but we’re in the wild wild west. That really undefined stage. So all of the possibilities good and bad are still out there.
Steffen: Yeah, yeah. Now, you mentioned obviously monetization, you mentioned brand awareness and probably connecting with with a target audience. What are those the only opportunities for retail in the metaverse? Or are there others that we even haven’t talked about?
Dan: There are products we haven’t even conceived that are opportunities in the metaverse. Certainly the easiest first step to comprehend is the thing that we can see right now, in front of us, a Gucci handbag, for example, and it has an intrinsic value, both on the primary and the resale market to a luxury customer. But in a virtual world, two things happen. One, you can reach a much broader audience. That Gucci handbag in a virtual world may only cost $400, instead of $4,000. Because it was never manufactured, there’s no cost of distribution, that’s a choice a business choice that the company would make. Or they could charge $4,000. For it, they could charge the same amount as in the in the real world.
But there are products or things that you could associate with, I think a great example is experiences. So I came from the the sports marketing space and experiences used to be associated to a ticket stub. And now ticket stubs have gone away. No one uses ticket stubs anymore, your ticket is on your phone. And there’s been a missing piece for the fan. Something that allows them to remember that day. Now, there are things that can be tied to your seat in that arena, on that particular date and time that can be re experienced through a virtual world. You know, and linked with an NFT and the blockchain. And you could continue to re experience that over time. In fact, that experience could then be resold on an exchange and appreciate over time.
So if you saw something historic, that was rare, then your experience sitting in that seat in that arena on that date, and that time can be resold to somebody who wasn’t there and would have a an intrinsic value. This is something that doesn’t exist today. So the sponsor of that event, the sponsor of the building, the whoever wants to sponsor the distribution of those NFT’s, for the team. All of these things are product categories and inventory that is not currently categorized in today’s retail world, but could be soon.
Steffen: Really interesting. Now, when I think about the metaverse, and you said earlier, I just think about gamers. Fits nicely with, you know, Nike shoes, or some Nike apparel to dress your basketball player in a, you know, well known NBA PlayStation franchise serious. That all makes sense to me. But what is known about the customers beyond the gamers? Are there other people that that would be interested in what you just explained and beyond that?
Dan: Yes, I mean, I think that matters investment in the metaverse has really opened the eyes of the non gaming consumer base into what it could mean, both negative and positive. And I think that there has always been a desire for people to communicate across long distances and channels. And they do it through games today, and through social media. But one could imagine that a world where you could go to a concert with a million other people as appeal as well. And that has nothing to do with games. But you know, although that concept was introduced in a gaming platform like Fortnite, it’s something you could see becoming its own industry. And those social events or our virtual experience will attract people with the same interests just like the real world does.
And in so doing, you’re going to expand farther and farther out of the gaming paradigm and into the true nature of a Metaverse which is an artificial reality. And because the internet and technology is expanding so quickly, the barriers between people that exist today like geography for example, or, or even socio economic classes, will virtually drift away because the technology brings people together is no longer people no longer have the limits that that keep them where they are today. At least virtually. Physically, they’re still on their couch. And you can certainly argue that is not a good thing.
Steffen: Now, when we talk about this one thing comes to mind, which is Second Life. I don’t know if you remember that, it was like, early 2000s. Like this, this virtual environment. Where in the beginning, a number of people went to it was kind of hailed as the new thing to engage with people from a social perspective, make money, etc, etc. What has changed since then, since this platform Second Life, and there were a few others, where kind of out there, to now.
Dan: I think Second Life still as a couple million diehards still on that platform. Still exists today is the development of hardware, both networks like 5g networks, the continued evolution of mobile phones, which are usually the tether required to get to the metaverse from an Oculus from Oculus goggles, for example. All of these things have become less clumsy and sleeker. I mean, everyone made fun of Google for the Google Glass a few years ago, that little glasses where you had a little screen, and it just looked dorky, right. But now you look at the kid wearing an Oculus goggles and they look like an insect of some sort. Nobody seems to care. I can only see that becoming, or the envelope, so to speak, getting pushed further and further. I have another company that is constantly retargeting me. I think it’s called woofer or something like that. But it’s a vest to haptic vest that.
Steffen: Oh, yeah, I know which one you mean.
Dan: Yeah, they can translate what you’re experiencing into your body feeling it? Usually, you know, if you went to a concert, and you feel the bass, the concert, you feel the music. That’s really what this product was designed to do. But clearly, it could be extended to anything in the in the metaverse. Certainly from a gaming standpoint, but, you know, just overall, the whole concept of haptic clothing and apparel is really in its infancy. And you can certainly see companies like Nike being leaders in the development and the ownership of the patents to deliver those experiences from a virtual world.
Steffen: Now, what are the barriers for entry for for any, any company? You know, what do they need to have in order to start offering, you know, virtual products online in the metaverse?
Dan: In many ways, I think that the, there’s never been a more democratic system of introducing new products to the masses. Because creators are only limited by their creativity. The whole idea of a decentralized marketplace, gives anyone who can come up with a concept, the ability to reach millions of people with that concept. And if there’s a market for it, then they can get rich really fast, or certainly make it worth their time. And I think that’s really just now being defined. The market is still very young, not only literally, but it’s still being defined. What kind of persona is going to be attracted to these products, these experiences. What kind of categories evolved from it? I think there are a ton of questions that are to be answered. What I do know is there’s a lot of corporate interest because they believe that there is a long term market for this world of products.
Steffen: Now, if brands buy into this, right, if brands say, you know what? I’m with Nike. I see a big opportunity there. How should they incorporate the metaverse into their strategy for the future?
Dan: You know, what I’m advising my clients is that they first focus on their physical products, and their existing customers, and identify ways that the metaverse can augment the experience they already provide not replace it. I think that brands who start to ignore what got them there are going to alienate their existing customers and probably do a disservice to the brands that you’ve created. So first and foremost, look to build upon, do no harm, to borrow from the Hippocratic Oath. First do no harm. And then the next phase will be companies that are native to the metaverse. And they need to think about things that are uniquely provided in a virtual world, and not try to beat the Nikes of the world at their own game, that they’ve proven very successful at.
So maybe that does take the form of categories of products that don’t exist yet. I don’t know, just randomly, my brain popped up with music, you can smell, you know, that’s something that doesn’t exist today. It sounds completely nonsensical. But in a virtual world, you could imagine a place where, you know, somebody mixes the right mix of essential oils that you smell at the right time during while music playing, and maybe it can create music, you can smell. But my point in saying some things are ridiculous is we just don’t know what’s going to be out there. And that the entrepreneurs of the future are going to come up with these ideas, are gonna catch lightning in a bottle and make a lot of money coming up with things that we haven’t even thought of yet.
Steffen: Yeah, I mean, from my perspective, hearing that it sounds like there’s there’s actually great opportunity for even lesser known brands, if they start to embrace and engage the metaverse early on to kind of potentially even build a much greater following there than they potentially have in the real world. And that could then reversely kind of come back here into rework were actually real products could be bought, in addition to the virtual products they’re selling in the metaverse.
Dan: Absolutely. And really, what’s going to happen is if you flash back to where Amazon started, Amazon started as a platform for themselves to sell things. What Amazon is today is because they made it easier for anyone to sell something and to sell it to millions of people. I think the future of the metaverse is going to be defined by a similar platform or infrastructure provider. Maybe it’s Apple, maybe it’s Google, maybe it’s a company that we haven’t heard of yet. But the key is going to be that they’re able to unify and translate virtual product from one platform to another. Meaning if you buy the proverbial virtual Gucci bag, on Fortnite, your character, your avatar will be able to share that value or that product on Roblox for example, or whatever other metaverses evolve over time. The point being is that transferability of product across multiple platforms is going to be the turning point. And the company or companies that enable that transferability, the portability, are going to be the next Amazon.
Steffen: Now Dan, before we come to the end of today’s podcast episodes. Are there any brands you are watching in the metaverse? And is any anyone doing it right or wrong?
Dan: I don’t think there’s a right or wrong yet. I think we’ve brought up some good examples of companies who have been early adopters, investors. What’s ironic is that, you know, you don’t often think of luxury brands as early movers. They’re low risk, they’ve been around 100 years, they don’t need to take risks. But they’ve been very active, particularly their holding companies in making investments. Here, I think that the especially appreciate the value of exchanges in the secondary market as it relates to virtual product. They especially appreciate the value that NFT’s can provide in protecting authenticity, or tracing the sustainable manufacturing of high end product.
I think those have been some of the early use cases for luxury brands to get involved in the virtual space and NF T’s in general. But everything has a cost and you know currently the power required to support the blockchain is certainly a downside to this, I guess emergence or this new world. But I think that those problems are going to be addressed and eventually we are going to have brands that crossover, brands that exist solely within virtual space, brands that are digitally native that extend into a physical world.
Steffen: Dan, thank you for joining me on the Performance Delivered podcast and sharing your knowledge on how retail brands need to approach opportunities in the metaverse. Now, if people want to find out more about you, and Scalefast, how can you get in touch?
Dan: Yeah, I’m happy to be available through LinkedIn. My LinkedIn handle is D. Brewster. And my Twitter handle is @mktgendavor endeavor and happy to talk more about this subject. It’s something that I’ve become very passionate about. I’m anxious to see how it evolves over the next few years. And then Scalefast is a solution for companies who want to take advantage of growth in this space. We are an end to end ecommerce solution provider for physical products today. But we’ve really built a unique platform that handles virtual and physical products in the shopping cart very seamlessly for as it turns out, gaming publishers. So this is an area that we’re very bullish about, you can find us at scalefast.com
Steffen: Perfect. Well, thanks everyone for listening. If you liked the Performance Delivered podcast, please subscribe to us and leave us a review on iTunes or your favorite podcast application. If you want to find out more about Symphonic Digital you can visit us at symphonicdigital.com or follow us on Twitter at Symphonic HQ. Thanks again and see you next time.
Voiceover: Performance Delivered is sponsored by Symphonic Digital. Discover audience focused and data driven digital marketing solutions for small and medium businesses at symphonicdigital.com