Forever21 doesn’t sell beanies in its stores or website, but it does on Roblox. In a matter of months, digital black beanies with the word “Forever” have become a massive hit on the virtual world platform, selling about 2,000 units a day at 50 cents each, and on track to sell 1.5 million units by the end of this year. The cost to create them? Less than $500 total.
Forever21’s Roblox world is managed by Virtual Brands Group, which paid to exclusively license Forever21 in the metaverse and shares revenues with the fast fashion retailer. Now, Forever21 is working with VBG to create physical versions of the best-selling beanie, and to potentially create an entire line of items inspired by its virtual Roblox world. “To R&D this costs them zero, and there are zero refunds and defects, but now they know there is a market,” says Justin W. Hochberg, CEO and founder of VBG. “It’s a pretty good business model.”
For Forever21, Roblox has become a key driver of social media buzz and potential revenue, and Hochberg is aiming to make Forever21's VBG business a $20 million business within the next 18 to 24 months. A key part of his strategy is driven by Y Pulse data that what young consumers do in the metaverse will dictate their interests in the physical world.
“I have an 11-year-old and a 14-year-old, and my best bet if I want them to take a maths class or go on a roller coaster ride is to get them involved in the metaverse to drive their physical desires,” he says. “And when we think about how to market to tweens or teens in the metaverse, we think about destroying the playbooks for the physical world.”
“I have an 11-year-old and a 14-year-old, and my best bet if I want them to take a maths class or go on a roller coaster ride is to get them involved in the metaverse to drive their physical desires.”
Teen retailers Forever21, Pacsun and Boohoo, among others, are finding success in the metaverse as their young customers spend more time — and virtual dollars — on platforms like Roblox and Discord. Gen Z and Gen Alpha shoppers care about what they look like in these online spaces, and the brands that cater to their metaverse needs are winning out. Now, they’re hoping that they can translate that into online sales.
Half of Gen Z adults said they are interested in using the metaverse, according to a survey by intelligence firm Morning Consult, and 68 per cent are self-identified as gamers. Within Roblox, 70 per cent of users are 24 or younger, and Aeropostale, Gap and Forever21 are among the brands with the most affinity, according to data from Geeiq. In late 2020, two million 13-to-16-year-olds spent a cumulative five million hours a day on Roblox alone, according to the company. One in five daily active Roblox users update their avatars on any given day, including the body, face and accessories; and people who are established in the metaverse, meaning they own cryptocurrency and have an avatar, are three times more likely to have purchased more than 30 virtual goods, according to a recent research report from creative agency Virtue.
While teen retailers’ products and consumers differ from luxury brands, their playbook, and the strategies of retailers like it, offers some key insights into how to appeal to the teen audience within virtual worlds and with digital products.
Digital goods drive sales and social
In November, teen retailer Pacsun debuted its inaugural NFT project, a wave logo that sold for about $800. It was considered a successful start, as its physical products sell for around $50, says Brie Olson, Pacsun’s president. In speaking to consumers, the retailer found that there is a high desire to own virtual versions of products, and to own something exclusive, so its second NFT project involved 300 unique “Mall Rats”, each tied to a physical store, that come with perks such as free physical clothing, free shipping and a spot on event guest lists, and sell for about $350 each.
“The 17-to-24-year-olds are a digital generation, but they still love their malls and the physical aspect of shopping,” Olson says, adding that a hybrid approach “makes it more interesting”. “It’s a bigger revenue and brand-building opportunity to explore physical and digital items and sell them in tandem or having opportunities for them to be purchased uniquely. We're excited to have the ability in the future to have more of our virtual items be able to float throughout the different platforms.”
Pacsun’s first digital products on Roblox mirrored what they had in stores, but a large pair of gold wings quickly became best sellers, so its strategy evolved to include more fantastical products about three months ago, Olson says. “We recognised they were looking for a sense of imagination and socialisation with their friends.”
The digital items that Forever21 sells fall into one of four categories: digital twins, modified twins, completely new garments (such as the Forever beanie) and completely new categories, such as a popular boombox. A recent prom campaign drove double the typical Roblox sales, and the brand doesn’t even offer physical prom apparel.
On social media, a recent campaign invited people to “twin with your avatar,” in which people could buy and wear the same items in the store as on Roblox, where 85 per cent of purchasers are 18 to 25. Then, people shared images of themselves next to their avatar, wearing the same outfit (pictured at top). This “twinning” content has been the brand’s most successful content on social media, getting 10 times the normal engagement, Hochberg says, and there are plans for giveaways related to this concept.
Olson has found that Pacsun’s consumers, who are about 17 to 24, demand creativity and authenticity, and are looking to participate in music events and virtual events like Complexland, for which it created a virtual store, where attendees could peruse products, then purchase them on its website.
Social media buzz is also a big motivator for Pacsun, which measures success in part on how metaverse projects drive engagement on social platforms. In March, Pacsun created a Roblox world (Pacworld) and launched its own standalone game in February, which it promoted by turning Gen Z influencer Emma Chamberlain into an avatar exploring the game’s underwater world; content related to Chamberlain represented the top views for the season on TikTok.
Six months ago, it created a Snapchat account, which encourages people to share their digital fashion looks. The account garnered 250,000 followers in the first 60 days, and the brand is able to track buzz on both Snapchat and TikTok (where it has 1.7 million followers) when it introduces new digital projects, Olson says. “Gen Z values community and access more than they value traditional brands, and our consumer is proud to change their social image to whatever NFT they bought and to showcase virtual ownership.”
Accessibility, education and collaborations
Since April of this year, UK-based brand Boohoo has introduced three NFT projects. Similar to its physical products, its NFTs are designed to be affordable and accessible. In April, it started with a free NFT mint featuring 10,000 special cards that were dispersed in about two hours, and were so popular that they crashed its website, says Boohoo head of marketing Jessica Routledge.
In May, it partnered with four female artists on a series of 30,000 avatar NFTs, sold for £20 or £25, depending on if someone had collected one of the free access cards. The NFTs give perks including future discounts and cash giveaways. This project did not meet sales objectives, says Routledge, but the campaign reached 20 million people across its digital channels, with overall engagement, brand sentiment and new customer acquisition seen as positive.
Most recently, it gave away NFT cards that offered a five-year free pass to the Forbidden Forest music festival in the Midlands, UK; 50 per cent were airdropped to current NFT holders and 50 per cent given away on social media.
While the buzz has been positive and the effort has established Boohoo as an early adopter, key challenges include educating the business and customer, Routledge says. “We are early adopters and the vast majority of consumers and employees haven’t delved into the metaverse space as yet.” To help solve this, it has created a new Twitter account, called Boohooverse, to provide its audience with access to metaverse technologies; it now has more than 10,000 followers. “As the tech advances and the space evolves, the business is gearing up to implement any opportunities we believe will improve customer experience and sales. Overall our approach for future campaigns is very much test-and-learn while we educate our core customer and the business.” Expect digital fashion collections, website “evolutions” and large-scale collaborations with those in the space.
The relative nascency of the space also enables brands to establish a new tone as they reach new customers, Hochberg says. This is highly relevant to luxury brands, who have been recently transitioning from a top-down mentality to co-creation and collaboration, which builds affinity among younger consumers, he adds. A recent project to create a new line of Barbie clothing, for example, offered the opportunity for the 150-year-old character to be introduced in a somewhat new way, and for consumers to mix and match her clothing digitally on their own avatars, rather than dressing a static doll.
This practice can also benefit the brand by serving as a live focus group to gauge interest. Forever21 is also letting the Roblox community vote on design details of digital products, which the brand can use to inform its physical assortment — a far less risky proposition than it would be in the physical world, he says.
“One of the things most important to Gen Z and Alpha is self-empowerment,” he says. “Although we think we know what sells, how do we turn over the fashion design of what we think people want over to the consumer, with some guardrails? Unlike when I grew up and a brand wanted total control of every aspect of how it was expressed, now everything is a collab or a capsule.” And in the metaverse, that mindset has extended to the consumer themselves.