Creating value in the Metaverse

11-11-2022 | News

There are now new tools that can help businesses create value, engage customers and beat the competition

Chiara Piancatelli, Marta Massi and Deborah Carolina Raccagni

Creare valore nel Metaverso - Festival del Futuro

Despite the Facebook-Meta crisis, which in these days is firing one in eight of its nearly 80,000 employees, the Metaverse remains one of the great innovative opportunities of the moment. In fact, one of the biggest challenges for brands in any industry isn't just create valuable content, but also to define new interactions to involve current and potential customers by exploiting the infinite possibilities offered by digital technology. With the passing of the years and the consolidation of a corporate vision no longer oriented to the product, but increasingly to the customer, the ability to involve customers (engagement) has become vital for the success of brands. Thanks to the rise of social media and the consolidation of immersive virtual platforms, which allow the audience a growing level of interaction with brands, the concept of engagement has evolved and is increasingly attractive for companies that base their positioning on co - creation of value together with their communities. 

Today, Millennials and Gen Z take full advantage of functionality offered by new technologies and digital environments to become active co-creators of value for brands and, therefore, to live unique and unrepeatable experiences within the brand community. While in the past engagement was developed by anchoring the three key components - cognitive, emotional and behavioral - to physical contexts such as the store, in recent years, thanks to Virtual Reality (VR) and Augmented Reality (AR) technologies and the consolidation of dimensions virtual parallel such as the Metaverse, the development of interactions between brands and consumers finds its complement in digital worlds.     

Defined by Mark Zuckerberg as “an immersive version of the internet, in which to transfer a growing part of our daily activities, having the opportunity to experience them thanks to augmented reality in the first person”, the Metaverse was brought to the fore during the change of strategy of Facebook. In reality, however, in addition to Meta, there are several players who have already been working for several years develop this ecosystem, such as Roblox, Sandbox and Decentraland. Within these universes, “virtual terrains” are sold, real new worlds, where brands can build 360 ° digital experiences. Some companies have even created their own virtual currency, coins that can be used to buy territories, products, accessories for digital twins, skins that can also be converted into real money. 

The novelty of Non Fungible Token

With this in mind, among the tools that companies can use to strengthen and implement evolve the concept of customer engagement, NFTs, i.e. Non-Fungible Tokens, are among the most precious and exciting, allowing brands to design experiences phygital with their own brand communities. NFTs can be described as digital assets based on blockchain technology, aimed at identifying in a unique, irreplaceable and non-replicable way the ownership of a digital object through an identification code, the so-called ID token. NFTs can represent the most varied products: accessories, clothing and objects from the world of fashion & luxury, for example, concert tickets, works of art, video game skins, avatars. Put simply, they can be imagined as virtual copies of real objects. With the explosion of the Metaverse, NFTs are gaining more and more relevance, turning into complex tools that allow their owners to unlock unique experiences both in the physical and in the virtual world.

The case of Dolce & Gabbana

Some luxury companies have been forerunners in harnessing the wave of enthusiasm around NFTs to experiment with new experience-centric engagement models phygital. An exemplary case is Dolce & Gabbana, which NFTs have given the opportunity to strengthen their own community, providing an ecosystem of benefits for its members both in the physical universe and in the Metaverse, such as access to a selection of clothing and accessories of special collaborations, as well as the possibility to participate in unique events.

For Dolce & Gabbana, fashion has always been a fusion of very distant worlds and new technologies have inspired the vision of Domenico Dolce and Stefano Gabbana from the very beginning. It is therefore not surprising that the brand is among the most active in the Metaverse. It all started in 2020, when Dolce & Gabbana participated in the China International Import Expo (CIIE), giving both visitors and online users the opportunity to enter the universe of the brand, thanks to interactive digital features, including augmented reality and a dedicated mini-program that offered visitors the opportunity to scan the products on display and access the videos directly from the catwalk. Starting from 2020, the Italian fashion house has continued to develop its digital offer, focusing on an increasingly omnichannel experience. Immediately after participating in the CIIE, the brand launched the Virtual Boutique Experience, a project that allows users to explore some of the most beautiful boutiques in the world through a 360-degree virtual tour. The platform allows you to see the products on display and to collect information, and to interact with a sales employee, ready to guide the consumer along the purchase path.

More recently, Dolce & Gabbana officially entered the world of NFTs with the launch of the Genesis collection, a unique collection of 9 NFTs personally designed by Domenico Dolce and Stefano Gabbana. The exclusive garments were the protagonists of the Dolce & Gabbana Alta Moda, Alta Sartoria and Alta Gioielleria events, held in Venice at the end of August 2021. The first concept unveiled within the Genesi Collection is Dress from a Dream, followed by The Impossible Jacket and The Glass Dress. While Dress from a Dream is The Glass Suit have a physical counterpart, the three versions of The Impossible Jacket they are digital only and inspired by The City on the Water. The collection also includes three jewels: The Impossible Tiara, a digital-only tiara, worthy of the Queen of the Adriatic, made with rare gems and a 16-carat red emerald with an extra metaphysical inner fire; The Crown of the Lion, which draws inspiration from the architecture and symbols of the Serenissima; And The Doge Crown of which, according to a legend, the owner will be the self-appointed King of Crypto.

The entire collection, which sold for $ 5 million, was the first collection Luxury NFT to include both digital and physical objects, thus combining reality and the Metaverse. The Genesi Collection was followed by the launch of #DGFamily, an exclusive NFT community in collaboration with UNXD, a marketplace for luxury and digital culture. The community consists of a unique ecosystem of digital, physical and experiential privileges exclusive to owners of DGFamily Boxes. The DGFamily Boxes, made in three increasingly rare levels, are NFTs that also act as a multi-level belonging to the Dolce & Gabbana universe. The #DGFamily is the first community to create afully phygital experience, combining the advantages of an online and offline community. The sense of belonging to such a community not only allows for the co-creation of value, but also increases loyalty, after-sales engagement and love for the brand. Furthermore, a stronger bond between the brand and its customers increases its profitability. 

A new way of investing

Experiences related to NFTs help separate property value from the purely financial opportunity to resell the token and distinguish NFTs from other forms of investment, such as the purchase of works of art or collectibles, such as Rolex, especially in the world of luxury. In fact, while consumers usually buy a luxury item to signal their social status and communicate wealth, people buy NFT for live unique experiences and connect with their favorite luxury brands without the need to invest large sums of money. 

The introduction of NFTs therefore allows the creation of new sharing spaces community-based where users can create content and, at the same time, acquire ownership rights on goods and services. A new concept of engagement is imposed, based on the effective co-creation of value and on participation in a collective identity defined by the NFT.

Chiara Piancatelli, SDA Bocconi School of Management. Marta Massi, Catholic University, Milan. Deborah Raccagni, Luigi Bocconi Commercial University.

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