The Future of Retail: Direct-to-Avatar Economy
The interactive digital environment brought by Web3 introduced us to a brand new concept, “direct-to-avatar”.
Not so long ago, creating a digital identity was limited to the profiles we created on internet blogs or social media accounts. Today, with the increase of technologies like blockchain, metaverse, and extended reality (XR), we can acquire a completely independent and concrete identity in the digital world. Not only a virtual depiction of our personality but we can also create a completely new digital identity for ourselves. These digital identities created a new field called the "avatar economy". In this new economy, operations such as logistics are removed from the equation and the digital assets are marketed directly to the avatars. This may sound like a retailer's dream, but now it's all too real.
What is direct-to-avatar?
In its simplest terms, direct-to-avatar, or D2A for short, is based on a business model where businesses can sell their products to avatar owners without worrying about stocks and dealing with logistics problems. Direct-to-avatar, which opens a new window to the fashion economy, seems to pave the way for both new retailing models and customer loyalty tactics.
Concepts such as the Metaverse and NFTs fundamentally changed the direction of the fashion and marketing world, allowing both manufacturers and consumer audiences to digitally own goods. Now, anyone can develop and market their art, music, and creativity without the need for any intermediaries. The fits you created in the old dress-up games may not have caught the attention of famous fashion designers, but the next generation will start designing their avatar looks at a much earlier age in the metaverse.
The fashion industry, which has been caught in the clutches of overproduction and waste, has been the subject of sustainability discussions in recent years. Now it has another chance for the future with the support of progressive technologies such as AR and blockchain.
Fashion giants are also jumping on the bandwagon
3D avatar platform Ready Player Me announced a collaboration with Tommy Hilfiger last week. The fashion giant's version of the digital fashion brand is called Parallel Tommy Hilfiger and will exist in the metaverse. The sweatshirt you like can belong to your avatar in the digital world, and a shoe you choose for your avatar can be yours in the real world.
The direct-to-avatar model takes the concerns of the fashion industry such as supply, logistics, and returns, and turns these major eCommerce problems into a purely creative environment. The new model has already started to attract the attention and appreciation of young consumers.
Ready Player Me x Tommy Hilfiger
Gen-Z is becoming so out now. Meet Gen Alpha
In every technological development to date, the focus of businesses has been on Gen-Z and addressing their likely aspirations in a changing world. An entire generation that could be considered as old as the technological evolution process is the target audience and has a say in the marketing tactics of brands or the development of a product. Gen-Z accounts for 67% of Roblox users, one of the heavyweights of the Metaverse. Aware of this enormous market audience, brands have long invested in Gen-Z and their trends.
As Gen X-Y-Z, we are growing up as generations aware of what technology really adds to our lives. And yes, we experience different realities and developments to appraise reality, just as it was for Gen-Z. The internet, social media, and now the metaverse are an escape for us from the boredom of the real world. Likewise, technological developments such as online shopping, AR solutions, and 3D imaging are positioned as innovations that make our lives easier.
However, a new audience can change the game. Meet Gen Alpha. Gen Alpha, which corresponds to the generation born after 2010, will not witness the development of technological innovations, they will exist directly in it. We can say that the needs of a generation born into the metaverse instead of entering the metaverse have begun to be positioned on a more decisive axis for brands. Ultimately, the metaverse will be the space for Gen Alpha's fresh creativity to drive an economy that is dependent on them.
A creativity wave in digital fashion with direct-to-avatar
Let us mention some of the fashion giants that have entered the new digital age of fashion by adopting the D2A model.
The digital fashion house The Fabricant collaborated with brands such as Adidas, Puma, and Tommy Hilfiger to digitize their products.
In 2021, Ralph Lauren created a 50-piece digital clothing collection that can be purchased through the social networking app Zepeto.
In January 2021, Gucci and North Face released a joint collection for avatars in Pokemon Go. Again, in March of 2021, Gucci launched virtual sneakers that can only be worn with AR.
Maybe with our digital presence, we can strengthen our desire to be “permanent” and leave something behind, which is always in the back of our minds. Our high school t-shirt doesn't have to turn into a cleaning cloth, it can be stored in our avatar's digital wardrobe for years without any damage. Today, we can subtly engrave every detail that makes us who we are into our digital identity, and observe who we are like an outsider.
Ralph Lauren x Zepeto
Direct-to-avatar model is a win-win strategy for brands and customers
Brands struggle with another problem behind the scenes of logistics problems, returns, and disruptions in the supply chain: counterfeiting. According to the Harvard Business Review, the counterfeit trade constitutes a market that weighs around $4.5 trillion. Moreover, 60-70% of these products are luxury products. Brands can prevent these by adopting the direct-to-avatar model.
The ability of NFTs, which sit at the center of the avatar economy, to distinguish imitations from real ones, comes to the fore in the fight against counterfeiting. Moreover, the question marks in the minds of consumers, who have begun to care much more about the story of the product with concerns such as sustainability, will be answered to a large extent thanks to the transparency these new technologies have.
The future of retail is here, are you ready?
At this point, the biggest move from brands will be to act according to the expectations of customers with these new technologies. If you think of it as a game, playing the game according to its dynamics is in no way to your detriment. If you are confused about how the technical part works, you can contact our professional team today and learn more about digitizing your products.
