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    Virtual sales improve sustainability credentials of retail stores. | by Jon Stilwell | Nov, 2023

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    Since Gucci opened its Metaverse store in 2021, there have been numerous reports about customers’ eagerness to pay for virtual apparel and the opportunity for such products to create a whole new retail market. But even more noteworthy is the potential to improve the sustainability credentials of companies that effectively enter these markets.

    Gucci’s Metaverse store was launched during the pandemic as an addition to the Gucci Garden. Gucci Garden is essentially Gucci’s flagship store in Florence, which includes a fine dining restaurant and a museum that, according to the company’s website, “celebrates its archive of old advertising campaigns, artisan images, retro objects and more. “We will also talk about the Maison’s new vision.”

    In 2021, as the pandemic restricted in-person visits to the gardens, Gucci launched a virtual version on the metaverse platform Roblox. Their main focus was adding virtual apparel to their online store, allowing customers to purchase Gucci items for their virtual selves or avatars. Since then, customers have responded so enthusiastically that some virtual items have sold for higher prices than comparable real-world items. For example, there is a virtual handbag that sold for 350,000 Roblux (approximately $4,500), which is about $800 more than the real-life version.

    According to the Financial Times, Gucci’s most popular virtual design was a bubblegum pink beanie emblazoned with the word “FOREVER.” It cost $500 to design and launch and sold over a million units for 75p. The FOREVER beanie was paired with a real-life version selling for $14.99 so people could match their real-life avatars.

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    While these developments are extraordinary, one of the most interesting consequences may be the impact on the retail sector’s social and environmental footprint. The retail sector is often criticized for its negative sustainability impact. The FOREVER beanie provides an excellent example of how companies can meaningfully increase their revenue without negatively impacting the environment or communities. If you want to try this idea, consider the example of calfskin shoes or pigskin handbags. Virtual versions of these items have almost nothing to do with real calves or pigs, except perhaps their appearance.

    Of course, the transition from physical to virtual apparel will have an even more profound impact. On the one hand, the Metaverse opens up new markets where companies can pursue growth and innovation. On the other hand, these developments present unexpected opportunities for companies to increase or maintain profits without increasing their environmental and social footprint.

    Naturally, there are unintended consequences. Just as the ecological footprint of beanies, handbags and shoes, the number of workers employed to make the physical products could be reduced. This could seriously impact the already skewed global income distribution and present new political and economic dimensions that require us to be more vigilant.

    Whatever the outcome of these complications, it’s reasonable to suspect that the end result will be positive for the planet, especially for calves and pigs.

    References:

    Christina Criddle and Adrian Crasa (February 24, 2023). “What Gucci learned from the Metaverse” Financial Times, accessed online.

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