JPMorgan calls the metaverse a trillion-dollar yearly revenue opportunity, noting in a recent report that about $54 billion in virtual goods are sold every year, more than twice what is spent on buying music.

 

The report described how just one parcel of land within Decentraland, a more adult-oriented metaverse space than Roblox, sold for almost $1 million. Its developer, Everyrealm, uses the space for an online shopping mall.

 

“Instead of having stores in every city, a major retailer might build a global hub in the metaverse that is able to serve millions of customers,” the report said.

 

In that vein, Nike recently launched Nikeland, also on Roblox, where shoppers browsing digital Nike products are greeted by a virtual reincarnation of basketball star LeBron James. Chipotle launched its own “restaurant” where the first 30,000 visitors got a voucher for a real burrito, while shoe brand Vans took the obvious route with its customer base — and opened a skate park.

 

“How you present yourself or how you allow your brand to be utilised in this environment is critical,” said Steve Rendle, chief executive of VF Corporation, which owns Vans, as well as North Face and Timberland. “We’re going to be very thoughtful and very careful in how our brand is represented inside the metaverse.” But he added: “I think there’s work to be done in how you connect this to commerce.”

 

Some see the potential for using the spaces as a means to drive e-commerce and real-world sales by stoking the growing attachment some have to their digital selves.

 

For instance, one of the most popular products in the Forever 21 store is a black beanie hat with the word “FOREVER’‘ written on it. It can be bought for 61 “robux”, the in-game currency bought with real-world money. At the current rates, the hat works out at about $0.75.

 

Virtual Brand Group would not say how many have been sold so far, but even lofty targets of a million by the end of this year would be a blip on Forever 21’s income statement, Hochberg acknowledges, though with some notable benefits.

 

“There’s no marginal costs. If I sell one or a billion, it’s the same. There are no returns, there’s no defects. There’s no shipping. There’s no global supply chain problems,” he said.

 

The interest in the virtual beanie has led to Forever 21 looking to release the product for real next winter, capitalising on popular phenomena among those who frequent metaverse spaces: the idea of “twinning” with your avatar, buying the same clothes and accessories for your real-world self.

 

Ultimately, creating a successful metaverse e-commerce space is about forgetting the formats of brick-and-mortar, said Sam Englebardt, a general partner at metaverse-focused venture capital group Galaxy Interactive.

 

“What a waste of technology if you just make, say, the PRADA store in the metaverse look the same as the PRADA store on Fifth Avenue,” he said. “That would be a huge waste of an opportunity to express yourself as a brand and sell to a customer.”

 

One of Galaxy Interactive’s investments was in RTFKT — pronounced “artefact” — which specialises in digital streetwear, typically one-of-a-kind digital sneaker designs in the metaverse, traded as non-fungible tokens. A promotional event in early 2021 saw the sale of 600 pairs of sneakers at a combined value of more than $3.1 million. RTFKT was acquired by Nike in December for an undisclosed sum.

 

“It reminds me of the Instagram-Facebook deal in its potential,” said David Jones, chief executive of The Brandtech Group and former CEO of Havas. “It has so much potential to give Nike a massive head start in the virtual sneaker world.”

 

 

Within all the hype, however, some sober analysis comes via polling that suggests the wider public is yet to be sold on the idea. Roblox users have given the Forever 21 store an approval rating of 39 per cent. More broadly, a sampling by Forrester Research last year suggested fewer than a quarter of US adults were interested in spending time in the metaverse.