What I Wanted To Speak About At #HPMKT, But Won't Be
For the first time in years, I’m not attending Spring High Point Market next month. I decided to stay home as I will be speaking at the Midwest Design and Furniture Fair in Kansas City in May [ more on that to come].
But if I had been speaking at High Point Market, the below image shows you what I would have been my topic of choice as so many brick and mortar retailers are struggling right now. Not all, but a lot.
It’s no news to anyone that the first quarter of 2024 has, in general, not been a great one for brick and mortar home furnishings or home related retailers. There have been a few notable exceptions for big retailers, ARHAUS being one, and several very small, niche, design oriented independent retailers [ many owned by my friends like Jeanne Chung, proprietor of Cozy Stylish Chic ] have also been doing just fine.
However, the latest news last week [March 2024] of design oriented kitchen and bath appliance retailer, PIRCH, halting operations, as reported by Business of Home, has most everyone I know wondering which respected retailer could be next.
So, I thought writing this post about something new, something that is working for some retailers in other industries could help brick and mortar retailers in the home related industries see a way forward, would be helpful.
So, I thought I would write this post
about how some retailers are utilizing metaverse spaces to make money.
What Are Metaverse Spaces And What Are Some Of The Benefits?
Before I start really sharing more, I recognize that some of you reading this may not know anything [ or much ] about metaverse spaces and what they are - or what they allow for, so I hope the below graphic will be helpful to you in giving you a fast, general understanding.
Now, let’s talk.
The chart below from Feb. of 2023, shows how much money is being made through the sale of real and virtual goods in metaverse space activations…and how much is projected to be made in just 6 more years.
Examples of brands with a track record of very successful sales of both physical and digital merchandise now, in their metaverse space activations are Gucci, Nike, Dolce & Gabbana, Tiffany and Adidas. Many other smaller retail brands are also making money in their metaverse space activations but these 5 brands are leading the way.
It’s important to note that their are many different metaverse platforms, including Roblox, The Sandbox, Decentraland, Minecraft, Horizon Worlds and Spatial [ the choice of many designers due to the realistic look of the build outs, but without the enormous consumer usage of Roblox or Minecraft ] .
West Elm is now producing virtual furniture for the metaverse of Roblox, but it remains unclear how much money this has generated for them so far. But, are they reaching their next generation of consumers to establish that all important brand awareness? Absolutely.
According to the tech newsletter, The Verge, 3 billion real world dollars a year is being spent per year on Roblox, alone!
Read the Verge’s interview with Roblox’s CEO, here. It’s fascinating. Roblox itself also has a blog, well worth subscribing to so you can understand where our next generation consumer is spending their time [ and their money or their parent’s money ].
Besides the benefits listed in my first graphic, what is really the #1 advantage for retailers of having a metaverse space activation of their own?
The ability to showcase much more real world product, in much less physical space, thereby decreasing long term lease costs, energy costs, labor costs and all other costs associated with physical retail.
Should metaverse space activations replace physical retail? No. I think it’s already been shown and proven that people value the ability to visit a physical space, so they can see, touch, and experience the quality of physical items in person.
In addition, we value the opportunity to connect, face to face, with well trained sales people who can explain to us the story behind the particular item we might be considering purchasing and who can help us compare why one item might be a better choices for us than another. In addition, we also value the ability to take an item home with us right away.
However, for brick and mortar retailers who are concerned about the very high cost of physical space in prime locations, and/or who are concerned about locking themselves into long term leases with such an uncertain economic and political environment, having a metaverse activation or virtual showroom that allows them to expand the amount of products they can show , in addition to their physical footprint, is a very attractive financial proposition.
Recently, my company had the opportunity to showcase this concept to attendees of Dallas Market Center’s January 2024 Lightovation tradeshow, North America’s largest residential lighting tradeshow.
Savour Partnership was contracted by Dallas Market to deliver the Metaverse Lighting Trendhouse project where both a 1 on 1 virtual showhouse was created and a metaverse space was created by my collaborator, Annilee Waterman, who designed, built, 3d modeled and rendered both spaces, assisted by my other collaborator, celebrity designer Shay Geyer, owner of IBB Design Fine Furnishings, who chose the 21 highlighted lighting fixtures, and provided design direction re: finishes and decor selections to Annilee.
The comment we heard most often from the lighting retailers who experienced the metaverse activation wearing 3D goggles was,
“WOW. This would be a less expensive way to expand our footprint and sell more product, and a way to attract a younger clientele into our stores.”
And it’s because of hearing that comment over and over from the 4 days I spent inside our activation space talking to attendees on the 3rd floor of the Trade Mart building, that I am writing this post.
Francisco, the young scion of a major Mexican lighting and home decor retail empire, was transfixed when exploring the Metaverse Lighting Trendhouse. He and I had quite a long conversation about it all.
I did not catch the name of the young woman in these images, unfortunately, but they were not together. She, too, could not get over how exciting the experience was for her!
As you can see in the image, she’s looking at one of Lightovation exhibitor, Schonbek’s chandeliers in this image, but virtually. If she had wanted to, she could have have seen this in her home, via the augmented reality functionality embedded into the Trendhouse or she could have downloaded the 3D model…via the links to each highlighted lighting fixture in the Showhouse.
Ready to see it for yourselves?
Explore both the 1 on 1 virtual trendhouse experience and the metaverse trendhouse experience on this custom landing page link on Dallas Market’s website here:
https://www.dallasmarketcenter.com/metaverse-lighting-trendhouse
This young man was having the best time exploring the Metaverse Lighting Trendhouse. He was an avid video gamer and understood just how to use the controls.
Do you know how many people play video games? Over 600 million. The video game industry is bigger than the movie and music industries - combined.
Metaverse spaces - when gamified [ ours wasn’t this time] are simply fun video games where multiple people can gather at one time to play, connect, win.
Wanting to know how to attract young male customers into your store? THIS is how.
Many interior designers came to explore the Metaverse Lighting TrendHouse, too, including Tiffany of Mid City Design Group, shown below.
As some of you know who are reading this, I had already been doing quite a bit of national speaking in 2022 and 2023 on the benefits of metaverse spaces for our industry, so hearing actual lighting retailers who attended Lightovation from all over the US, Mexico and Canada have this response, over and over, as their first reaction to seeing and experiencing our Metaverse Lighting Trendhouse activation was affirming.
I am so grateful to Cindy Morris, CEO of Dallas Market Center, for greenlighting this project, to Cole Daugherty and Allison John at Dallas Market Center for being responsible for shepherding this project through from beginning to end, and also to Laura Van Zeyl for assisting in critical moments. And, of course, to the Lightovation board, now led by Hubbardton Forge’s President, Maria Mullen, for allocating the budget.
Are There Any Big Home Related Retailers With A Metaverse Activation?
Yes! Ethan Allen is the first.
Explore what Ethan Allen has done, white labeled to their own website, here:
https://www.ethanallen.com/en_US/virtual-design-center.html
How Much Does It Cost?
Building out a metaverse activation - something my company can help any retailer do, is not inexpensive. Pricing starts close to 100K if you want all the bells and whistles [not including gamification which adds another layer of complexity as that must be coded ] but it is much less expensive than signing a long term lease, building out physical space in a prime location and all the associated costs over the lifetime of that lease.
In addition, a virtual space can be enjoyed and experienced by anyone around the world, 24/7, and a link to the virtual space can be shared with anyone - across any platform.
The investment is dependent on several factors:
1. Amount of product to be 3D modeled.
2. Square footage of space to be built and level of finish out detail desired.
3. Number of products to be included, even if 3D models are already available.
4. Level of detail needed on the rendering work to be done on the 3D models and amount of rendering work.
5. Physical deliverables: # of still images, # of animations.
6. Gamification or no gamification.
7. # of links to be included and amount of information on each link.
8. Administrative time involved for meetings, review of work, etc.
Again, I want to re-iterate that I am a FIRM believer that physical retail stores are important, for all the reasons I’ve already mentioned in this post, but I do think that now and in coming years, locations won’t need to be AS big as they’ve been in the past.
If you’re a retailer reading this, and you own your real estate, adding a metaverse activation will not help you if you are not prepared to invest in consistently promoting your metaverse activation over time via events, signage, ads, social postings, etc.
It will not be worth the investment if sales are your goal - although it WILL be worth it for the thought leadership and brand awareness aspect within your regional market[s].
Consistent marketing and promotion to your desired ideal customer is the key to any retailer’s success, whether you own physical retail or have a metaverse activation or both.
So, who’s ready to think different? Who’s ready to work with my company to help you develop your own metaverse activation - and to help you market and promote it? Who’s ready to attract your next generation of customers?
If that’s you or your company, contact me via IG here or Linked In here or via the contact form here on my site.
Leslie Carothers
Principal, Savour Partnership
Named One Of Home Furnishing News Magazine’s Top 40 Most Inspiring Women In Home
