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Analysis | Of Course Our Brand Has a … Metaverse Strategy?

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Naturally, where there’s a buck to be blockchained, we find salivating celebs.

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Snoop Dogg unveiled his Sandbox Snoopverse experience, complete with a collection of virtual cars and a digital replica of his “real-life mega mansion”; Paris Hilton launched “Paris World” inside Roblox to give her fans “all my inspirations of what I want in that world”; and the former First Lady Melania Trump kicked off her “NFT and blockchain technology venture” with Melania’s Vision — a “breathtaking watercolor” token that “embodies Mrs. Trump’s cobalt blue eyes, providing the collector with an amulet to inspire.” (Never mind that the source of funds for the winning bid in Mrs. Trump’s first NFT auction appears to have been the project’s creators.)

Of course, not every brand has succumbed to meta madness. The chairman of LVMH, Bernard Arnault, recently warned an earning’s call “to be wary of bubbles”:

“We have to see what will be the applications of the metaverse and NFTs. It can undoubtedly have a positive impact — if it is well done — on the activity of the brands, but it is not our objective to sell virtual sneakers at €10. We are not interested in that.”

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And, for the time being, the virtuoso of hype Kayne West is keeping his NFT powder dry:

Yet Reese Witherspoon (who last year sold her production company Hello Sunshine for $900 million) tweeted this bullish call to action:

“In the (near) future, every person will have a parallel digital identity. Avatars, crypto wallets, digital goods will be the norm. Are you planning for this?”

And there’s clearly greater-fool gold in them there hills: In May 2021, a virtual, in-game Gucci Dionysus handbag re-sold for 350,000 Robux — the Roblox equivalent of $4,115, and $715 more than the bag costs in real life.

While crypto-bros are eagerly extrapolating this virtual gold rush into a Blockchain Candy Mountain of non-fungible profits for all, many brands are expanding in the opposite direction: from URL to IRL, from cyberspace to corporeality, from meta to meat.

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At one end of the spectrum is the online beast Amazon, which is expanding its portfolio of physical stores (Amazon Go, Amazon Fresh, Amazon 4-star, Amazon Books) and, according to the Wall Street Journal, scheming several 30,000-foot “department store” locations around the U.S.

At the other end of the spectrum are Direct-To-Consumer darlings like Casper, Warby Parker and Indochino that have realized the limitations of selling mattresses, spectacles and custom-suits via flat-affect websites, and rediscovered the timeless retail magic of patter, tactility and instant gratification.

This proliferation from clicks to bricks has had two curious neighborhood knock-ons. First, it has led to the emergence of DTC DMZs — see, for example, Manhattan’s SoHo — where brands like Allbirds, Glossier, Bonobos, The RealReal, Away and Madhappy cluster for passing trade and hipster approbation. And second, it has catalyzed a new breed of compartment stores — Naked, Neighborhood Goods, Wolf & Badger — where digitally-native indie brands encounter real-world consumers in the kind of immersive and engaging environments the metaverse is aching to emulate.

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Take Showfields (“The most interesting store in the world”), which in its Manhattan, Miami and Los Angeles locations “brings together the most mission-driven, design-oriented, innovative, unconventional, and relevant brands, artists and communities from around the globe.” The net-net of which is to provide DTC blands with plug-and-play booths in Gen-Z spaces, while luring curious consumers with an endlessly evolving, selfie-inspiring narcissistic mirror of hauls.

What unites these seemingly opposing forces — metaverse virtuality and mercantile physicality — is the realization that, regardless of fads in fashion or tech, profit materializes when “point of sale” is coterminous with “point of engagement.”

In other words, brands must go where the action is.

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Going where the action is takes many forms, and each location offers new brand opportunities, poses fresh technical challenges and throws up interesting consumer insights.

The lure of air travel for brands is the mindset of passengers, most of whom travel for pleasure or business. The former engenders a mood of footloose spendthriftiness, the latter a sense of cash-rich-time-poor, on-expenses revenge spending.  (This kind of air-side liminality also explains why airport alcohol is such a thing.)

Over time, almost every aspect of the air travel experience has been branded — from the endless trek through the duty-free jungle to the co-branded luxury of the first-class lounge.

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Take London’s Heathrow Airport, which boasts restaurants from:

Caffè Nero, Caviar House, Costa, Fortnum & Mason, Giraffe, Gordon Ramsey, Heston Blumenthal, Itsu, Kanishka, Leon, Pret A Manger, Shan Shui, Spuntino, Starbucks, Wagamama and Yo!

Boss, Bottega Venetta, Bulgari, Burberry, Cartier, Chanel, Dior, Fendi, Gucci, Hamleys, Harrods, Hermès, Jo Malone, Kate Spade, Kurt Geiger, Louis Vuitton, Mont Blanc, Orlebar Brown, Paul Smith, Prada, Rolex, Saint Laurent, Smythson, Superdry, Ted Baker, Tiffany & Co. and Watches of Switzerland

In 2019 (the last pre-Covid year) Heathrow’s total revenue was £2.98 billion — of which 61.5% came from aeronautical revenue and 13.6% from catering and retail concessions. Not too shabby for a glorified waiting room.

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Naturally the brand experience continues unabated onboard, where airlines shill “exciting brands and exclusive products” from their own boutiques …

… and partner with drinks brands (Hawaiian Airlines × Maui Brewing Company), star chefs (British Airways × Tom Kerridge) and beauty products (Qatar × Diptyque) which are only too eager to deploy beachhead collaborations to engage affluent travelers with no practical means of escape. (Airlines also provide carefully calibrated class systems, for brands keen to target certain cash brackets.)

Back on the tarmac, the brandscape is no less crowded. For instance, the remarkable roster of Emirates sponsorships includes no fewer than six major football teams: AC Milan, Arsenal FC, Olympiacos FC, Olympique Lyonnais, Real Madrid C.F. , and S.L. Benfica.

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Yet it is HSBC’s two-decade domination of airport schlepping that remains the most remarkable location-specific brand activation. In 2018, HSBC launched its latest campaign iteration (“Together We Thrive”), which covers 94 kilometers of airport walkways and 1,500 air bridges in 17 airports, across 10 countries, reaching 900 million passengers a year.

If air travel captures consumers for a few jangled hours, hotels promise days (and nights) of tranquil immersion. Traditionally, brands have hustled their way into hotel shops or paid to place their products in curious corridor window-displays. Now, every facet of the hotel experience is up for grabs — from mini-bar snacks (Moon Juice × Equinox Hotel) to bed linen (Wayfair × Hilton) and hi-fi (Ruark Audio × Savoy).

The most common hotel collaborations involve bathroom amenities, though some brands are more dedicated than other. Molton Brown, for instance, offers a range of specific hotel products (including the “Turndown Collection”) as well as a selection of “bespoke hotel services” (meet the “Bathing Butler”).

For brands offering complex services or expensive products, hotels enable consumers to test-run without pressure or obligation. For instance, W Hotels recently announced a collaboration with the clothing-hire service Rent The Runway, and Peloton has a dedicated “hotel finder” website to track which properties offer its machines. (According to the company’s S-1, as of June 30, 2019, there were 1,298 Peloton bikes in 696 hotels and resorts.) Moreover, the domestic popularity of luxury coffee pods — most obviously Nespresso — likely owes at least something to their strategic ubiquity in hotel rooms.

For some brands, to be just one element of the in-room experience is not enough. Hence luxury labels like Versace, Bulgari and Ferragamo and populist brands like Shinola, Equinox and Muji have opened entire hotels. The blurb from Ikea’s hotel offering explains the totalitarian aim:

“At IKEA Hotell, you are not offered any small interior details. Here, the entire hotel is permeated by IKEA.”

The natural extension of “branded hotels” is “branded residences,” where consumers can live inside the brand values, mission statements and fabric swatches of their favorite CEOs.

It’s hardly a stretch for hotel brands to launch residences like Twenty Grosvenor Square by Four Seasons or Mayfair Park Residences by the Dorchester Collection. Nor is it especially surprising when fashion labels dabble with lodging, as with Fendi Château Residences, Missoni Baia or Residences by Armani Casa. But the eyebrow arches when the chase is joined by automotive brands like the Porsche Design Tower, the Aston Martin Residences and the Bentley Residences — even if they do install Batman-esque car elevators.

While such ostentation is performatively expensive (Mayfair Park Residences cost between £4,250,000 and £24,500,000), the concept of branded residences is trickling down to the masses, like the cerulean blue sweater in “The Devil Wears Prada”:

In 2017, Airbnb announced the launch of five branded apartment complexes in partnership with the U.S. real-estate company Newgard Development Group. Last year Ikea launched 500 flats at the company’s first “mixed-use retail and residential development” in Changsha, China. And the British retailer John Lewis is building 10,000 homes on spare space from its property portfolio, including underused parking lots.

Should you still be searchin’ for your lost shaker of salt, you can idle away your dotage in  Latitude Margaritaville — a chain of retirement homes branded around Jimmy Buffett’s melancholy, tequila-soaked 1977 hit.

Last December the restaurateur and Top Chef judge Tom Colicchio announced: “@CHFTYPizzas, a collection of 8,888 of the most delicious NFTs baking on the Ethereum Blockchain.”

Whether the sensory pleasures of mealtime can ever mix with the cyber profits of the metaverse remains to be seen (can fungi be non-fungible?). Indeed, a glance at the CHFTYPizzas website suggests little about what these NFTs will actually deliver, though the intent is clearly to strap into a culinary meta-rocket headed, like all such ventures, to the moon.

Back on Earth, we find lifestyle brands are as interested in F&B as they are in lodging — and for the same motives of experiential immersion. Hence restaurants by Armani, Gucci, Prada and Tiffany & Co. (at the deep end of the price list) and H&M, Primark, Lululemon and Crate&Barrel (in the shallows).

Of particular note is Bumble Brew, the Manhattan restaurant recently opened by the dating app Bumble, in partnership with the Delicious Hospitality Group (which “re-launched the hospitality component onboard JetBlue Airlines Mint Class”).

In some ways dating apps can be seen as mini metaverse pioneers: Real-life users create a virtual presence on cloud platforms hoping to connect in a blended reality. Given that, it makes sense for Bumble to construct a physical presence not just as a “safe space for healthy and equitable relationships and connections” but as a marker of real-world permanence. After all, it’s nowadays considered a milestone of commitment to delete the app that hooked you up.

Perhaps the strangest brand extension into F&B is Intersect by Lexus:

“A sensorial experience, reflecting the brand’s design and environment ethos. Neither dealership nor traditional retail space, guests may engage with Lexus without getting behind a steering wheel. It offers guests a sense of Lexus, and the lifestyles it embodies.”

In Tokyo, Dubai and (until this January) Manhattan, Intersect by Lexus offers curated lounge, café, restaurant, exhibition and retail immersions, all tied to the design details and brand values of Toyota’s luxury marque. At once charming and chilling, the effect is rather like paying to be an extra in a Lexus ad.

Although luxury brands have long sought to collaborate with complementary auto marques (Zegna × Maserati; Paul Smith × Land Rover; Hermès × Bugatti), as cars have become more immersive and automated, other sectors have sought to cadge a ride.

The most notable encroachments are coming from Big Tech’s in-car assistants — Android Auto, Apple CarPlay, Echo Auto — which are competing to overlay their operating systems onto the driving experience, while hoovering up yet more user data. But branding’s real automotive opportunity will arrive when (and if) self-driving cars become a mainstream reality, and the driver/passenger experience morphs into a “third space” cocoon of location-specific content, connectivity and consumption.

Glimpses of how this future might look emerge each year at CES. Among other announcements this January: Sony launched its prototype Vision-S 02 SUV that can connect remotely to a PlayStation; Amazon announced a collaboration with Stellantis to bring “customer-centric connected experiences” to brands like Jeep, Chrysler, Dodge Fiat, and Peugeot:

“We are inventing solutions that will help enable Stellantis to accelerate connected and personalized in-vehicle experiences, so that every moment in motion can be smart, safe, and tailored to each occupant.”

And LG trailed the Vision Omnipod vehicle with its “futuristic cabin” equipped with a virtual AI assistant (called Reah), modular in-vehicle appliances (say, a wine cooler) and a metaverse ready “meta environment screen.”

The boldest innovation was BMW’s iX Flow concept SUV, which features “electrophoretic” e-ink technology that allows the car’s bodywork color to be modified. At present the color scheme is monochrome, but full-spectrum options are in the works. What is to stop autonomous cars becoming mobile and morphable billboards — with exteriors as accessible to brands as their interiors?

Surrounding such infrastructural brand engagement is a blur of interstitial opportunities.

In the physical world, this blur is embodied by the inescapable crop of brand pop-ups and local activations, which range from opportunistic takeovers of empty stores (by established brands and indie startups) to bold attempts to “own” specific moments (Campari’s Aperol-ification of the “golden hour,” for example, which has proved much more successful than “Pimm’s o’clock”).

Online, the blur arrives via technologies that let you buy what you see on screen — like the Daily Mail’s Femail Fashion Finder — or use your screen to see how products might suit you — like Snapchat’s “Catalog-Powered Shopping Lenses”:

“Shopping Lenses are specifically designed to offer Snapchatters a way to seamlessly interact with, try on, and click to purchase multiple products in a single Lens by simply swiping through the Lens Product Cards — a new user interface built just for shopping.”

Together, these off- and online trends merge to a bizarre climax in a range of hyperreal and hyperactive experiential spaces operating as branded canvasses for social media self-aggrandizement.

The Museum of Ice Cream, for example, is “designed to inspire human connection and energize the senses to reimagine the way we experience and love ice cream,” which it achieves via pastel-hued “inclusive environments” in New York City, Austin, Texas, and Singapore.

Similar spaces have been themed around pizza (Museum of Pizza), wine (Rosé Mansion), color (Color Factory), sweets (Candytopia), dogs (Human’s Best Friend) and even eggs (The Egg House).

Notwithstanding their self-evident superfluity, these Wonka-esque, FoMo fun houses are thus far the closest real-world incarnation of the brand immersion promised by the metaverse. Of course, judging from some early online experiences, to hope the metaverse will prove inclusive, liberal, pacific or pastel seems somewhat optimistic.

Omnivorous Omnichannel Omnipresence

For all its current hype and hyperventilation, the boldface metaverse brandgrab is simply the latest iteration of the shopkeeper’s timeless shibboleth: Eyeline is buy line.

As malls fade, main streets shutter and generations of digitally native nomads come of affluence, to be “available wherever books are sold” is no longer sufficient — you need to be “wherever books are read” or, even better, “wherever readers are.” If this proves to be the metaverse, so be it. And so much the better. After all, the markups on digital diffusion lines are fatter even than perfume, and there are no returns — at least, not yet.

The consequence for consumers may be less thrilling. If branding seems intrusive in today’s airports, hotels, restaurants and cars, just wait until it pervades every click and pixel of your online presence under the guise of gamified immersion.

Omnivorous omnichannel omnipresence may be the golden ticket for companies and celebs but, for the rest of us, a brand-saturated metaverse looks like corporate ball-pits all the way down.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Ben Schott is Bloomberg Opinion’s advertising and brands columnist. He created the Schott’s Original Miscellany and Schott’s Almanac series, and writes for newspapers and magazines around the world.

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