We’re at the beginning of a whole new digital era.
In this new version of the internet, creative experience drives everything. That could include, say, a virtual sneaker for someone’s avatar in order to build in-game cultural cachet, or a membership token that unlocks access to exclusive community experiences.
It’s important, then, to separate the last eighteen months of hype around speculative crypto trading with broader marketing opportunities. The latter represents the evolution of consumer tastes and accompanying behavior changes that aren’t going away. To future-proof themselves, experimenting, iterating and evolving with consumers is critical for both traditional and Web3-native brands.
We recently saw this belief play out in research we conducted at the height of the ”crypto winter.” The majority of early adopters surveyed anticipated that their spending across a digital portfolio will only increase. As they spend, they expect brands to provide virtual goods that meet their needs. They’re hopeful this space will bring richer, more rewarding and creative experiences.
Gaming platforms currently offer the most robust buying experiences, but people are ready and willing to spend their money elsewhere.
In-game commerce interactions currently represent more than half of our early adopters’ portfolios. But they anticipate that will shift in the future, whether to collectibles, membership tokens, fractional ownership, charitable donations or other purchases.
Imagine a luxury hospitality brand using a virtual token to unlock unique privileges for their best travelers. Or, more simply, the token is a next-generation loyalty card that travelers can actually own. It grants them access to exclusive amenities and services – but in a whole new way, because they now own a stake in the brand.
This is an emerging opportunity for brands to deliver value in new ways — from increasing membership in loyalty programs, to offering perks of ownership.
Consumers are looking for brands to develop virtual goods that enable new ways of creating value.
Early adopters are willing to pay for virtual goods, especially if they already have a relationship with the brand. This willingness to pay for pixels could create new opportunities across the consumer experience.
To succeed in this space requires us to consider the emotional values brands can provide: What benefits and access does the virtual good offer? How does the virtual good create not just short-term but long-term value?
Imagine an automotive brand whose consumers can’t find the new vehicle they want on any lot. Through a virtual good, the brand could build a relationship with consumers who want to reserve vehicles. They could even later “burn” the virtual goods in exchange for their reservation.
Social behaviors, including pooling resources to purchase virtual goods, will continue to shift the ways brands perceive priority audiences. Novel product streams in this space can enable new ways to build relationships with consumers and enrich first-party data pools.
Consumers are keen to reward brands offering virtual goods with their virtual and physical wallets.
Eighty percent of early adopters surveyed are interested in obtaining a virtual good from brands, and one in three said they would pay for one -- even without knowing what it might unlock. Gone are the days of every holiday gift coming wrapped in a physical bow. Virtual revenue streams can extend and expand physical product lines.
Imagine, for example, a consumer electronics brand that creates as much demand for a virtual drop as it does for a holiday product launch in retail stores.
In Web3, value is taking on new meaning.
Elasticity is greater in the virtual space. Even everyday value brands have the opportunity to increase sentiment and perception through the added value that digital goods can provide. This halo effect has the power to reposition the ordinary as something more akin to luxury. Virtual goods have perceived luxury. Perhaps because they’re so novel, people seem more tied to virtual goods than they are to their physical equivalents.
Virtual goods can carry powerful cultural cachet in new environments while deepening emotional value.
Cristina Lawrence is EVP, consumer and content experience at Razorfish.