Store of the Future   //   November 29, 2023

Virtual stores are taking center stage in brands’ holiday metaverse strategies

As retailers begin to roll out their metaverse strategies for the holidays, virtual stores appear to be the format of choice for many. 

Earlier this month, J.Crew announced the launch of the holiday version of the metaverse store it opened over the summer in partnership with experiential commerce platform Obsess. Beauty Brand L’Occitane also opened a holiday shop in the metaverse in November, which mimics a chalet in the Provençal French Alps. Bloomingdale’s also announced the return of its metaverse store this holiday, featuring a 3D interpretation of its flagship location. 

For the last three years, brands have been incorporating various metaverse experiences into their holiday marketing campaigns. Some brands have previously opted to develop virtual try-on experiences, create interactive challenges or give users the chance to co-create virtual products. This holiday season, however, more brands have been investing in ways to bring the fun of in-store shopping into the digital world by way of metaverse stores. 

“The moniker of metaverse isn’t the thing that’s resonating with consumers. Instead, it’s convenience and customization,” said Marcus Collins, marketing professor at The University of Michigan and author of “For The Culture.” “People want autonomy. They want agency to shop the way they want, when they want, at their own discretion.”

After the hype around the metaverse mellowed out, some brands began to scale back their metaverse strategies. For example, Walt Disney axed the team responsible for mapping out its metaverse strategies, while social media giant Meta has lost about $46.5 billion since 2019.   

Still, there is growing interest in virtual spaces. In Roblox’s third-quarter earnings report, the metaverse platform saw average daily active users rise 20% year-over-year to 70.2 million. Beauty brands like Fenty Beauty and Maybelline New York have continued to develop immersive spaces and activities on Roblox. Roblox has gained popularity with kids under the age of 13 but it also has niche communities on the platform for certain interest areas. For its most recent brand campaign on Roblox in partnership with virtual DJ Kai, Maybelline said in a press release that it was specifically aiming to capture the attention of the “vibrant music community” on the platform.

Melanie Nuce-Hilton, senior vice president of innovation and partnerships at not-for-profit data standards organization GS1 US, said that these virtual stores allow brands to reach a wider range of consumers. Users who don’t live in close proximity to a physical store can oftentimes miss out on the full brand experience. 

“The thing about an immersive experience is that I can appeal to so many types of user personas,” Nuce-Hilton said. “This idea [of creating] a link between physical and digital is driving more and more interest.”

A tactic that some brands like Bloomingdale’s are applying is to model their virtual stores after their flagship store. Bloomingdale’s virtual store features the flagship store’s holiday window display, gifting room and beauty bar that features its signature checkered floors. Crate & Barrel also teamed up with Obsess in November to create its first virtual store, which is a photo-realistic version of its new flagship store. 

In an interview with Fast Company, Sebastian Brauer, Crate & Barrel’s svp of products, visual and Web 3.0, said that Obsess’s approach allows the store to be more accessible to older shoppers who might not be as familiar with virtual spaces.

“There’s a reason people like going into stores,” Brauer told Fast Company. “They like stepping into the brand’s world and discovering new products. Now anybody can visit our flagship store, without traveling to New York.”

Melissa Minkow, director of retail strategy at digital consultancy firm CI&T, said that brands could also incorporate details that shoppers wouldn’t be able to find in physical stores. J.Crew’s virtual store, for example, lets visitors answer a few “this or that” questions which would then create a holiday greeting card based on the answers. Meanwhile, L’Occitane’s virtual store allows shoppers to learn about giftwrapping in an interactive mini game. 

“It’s an extension of a brick-and-mortar presence, where you can do things that you couldn’t do in a physical store,” Minkow said. “You can have way more people visiting a virtual store than you can a physical store. And just given how consumers don’t like the big crowds during the holiday season, this is a way to drive traffic that isn’t foot traffic.”

However, Minkow said that there isn’t a lot of data that supports virtual store’s effectiveness in driving sales. Additionally, when brands invest in metaverse experiences like virtual stores they are taking funds aways from other areas that could generate returns. 

“You’re taking away investment from other routes,” she said. “You’re pursuing a route that you know usually has a smaller audience and a smaller potential for sales than your conventional route.”