Why Gen Z Loves Digital Twins and What it Means for Brands
3 minute read
Gen Z’s most enduring traits are magnified in the metaverse. They share a desire for self-expression, crave community, and value virtual goods like digital apparel and accessories as much as physical products. In fact, 60% of Gen Z consumers believe how you present yourself online is more important than how you present yourself in person. Given this, future-focused brands are succeeding in connecting with Gen Z through a digital twin strategy, offering virtual versions of IRL products. Why? Strong benefits on both sides.
For Gen Z, digital twins are an easy concept to grasp and leverage an existing behavior (they’ve been buying virtual goods in games for years). Digital twins also empower self-expression in the metaverse with price points that are often much lower than NFTs.
For brands, digital twins can drive high-margin revenue, are not costly to produce, spark social media engagement and help build community. With global spending on virtual goods doubling since 2015, digital twins are going mainstream and represent an on-ramp to the metaverse for brands just getting started in web3.
Virtual ownership brings IRL benefits for brands
Brands can begin their metaverse journey by developing a digital twin series of their existing top-selling products. Case in point? Forever21’s recent “twin with your avatar” campaign. Here customers were invited to buy and wear the same outfits IRL as they did on Roblox. Then they started sharing photos of themselves next to their avatar - both wearing the same outfit. It was a hit. The posts drove 10 times the normal engagement.
Digital twins of existing products are just the beginning. Despite not selling beanies anywhere but Roblox, Forever21’s launch of digital black beanies on the platform was a viral success. Emblazoned with the word “Forever” the beanies immediately took off, selling at a rate of 2,000 units a day with a price point of 50 cents each. They are projected to sell 1.5 million units by the end of 2022. One of the top benefits for Forever21? The cost of production was less than $500 total and didn't require shipping, packaging, warehousing or any materials. Hard costs aside, the sustainability benefits are also quite meaningful given Gen Z’s concern for the environment.
Empowering youth culture with new forms of identity
According to a report by razorfish and Vice, Gen Z is the first generation that feels more like themselves in the metaverse than they do IRL. They see gaming and virtual worlds as a conduit for self-exploration and showing the world the best version of themselves. For a generation that is 8x more likely to be introverted than extroverted, it gives them an easy way to experiment with clothes, gender and identity in ways that no other generation before them could.
Brands that enable Gen Z to explore who they are and how they want to be perceived, fill a human need that deepens relationships and transcends what’s possible with physical products alone. Proving this point, one of the top-selling products on Roblox in 2021? A Rainbow Flame Aura Top. Estee Lauder took the fantastical route as well, giving away 100,000 “glowing auras” to attendees of the 2022 Metaverse Fashion Week in Decentraland.
When PacSun first launched digital products, they simply mirrored IRL products available in-store. The best-selling virtual product however was something that could never fit on a store shelf – an enormous pair of gold wings. This inspired the brand to double down on designs that could only exist in the metaverse, deepening relevance with young consumers whose virtual goods purchases currently account for 15% of their “fun budget,” a number expected to rise to 20% by 2027.
From virtual to physical, Nike “forges” ahead
Having acquired virtual sneaker startup RTFKT in 2021, Nike is no stranger to the metaverse. As Gen Z’s favorite apparel brand with a Discord community of 224k members, they are turning the idea of a digital twin on its head. Instead of following the expected path of physical products inspiring digital versions, Nike is starting with digital and going physical from there.
To bring this concept to life, Nike tapped 19 artists (some of them as young as 14 years old) from social media and its own community to create “RTFKT Space Drip x Nike Air Force 1” digital sneakers as NFTS. For holders, these digital designs are being “forged” into limited edition physical sneakers based on the Air Force 1 design. The physical collection even addressed Gen Z’s concerns around counterfeits in the sneaker space by being the first to include Near Field Communication (NFC) tags. These provide verification of who the current owner is and who redeemed the sneaker on the blockchain.
Takeaways
For brands building their web3 strategies for Gen Z, digital twins represent a low-risk, low-cost way to enter the space and engage consumers through community. With the majority of modern product designs already built in 3D files, digital twins represent an easy “on-ramp” to the metaverse.
Given that Gen Z is four times more likely than Gen X to buy a physical good if it is paired with a digital twin there is a timely opportunity for brands to explore a digital twin strategy now in preparation for the 2022 holiday season. This can bolster lost revenue as a result of the economic downturn and crypto slowdown.
To bring more customers into the metaverse, brands can bundle digital twins into the initial sale of a physical product either online or in-store. Pricing can include the digital twin or be made available for a slight up-charge. This can drive conversions and significantly ease the on-boarding process by not requiring buyers to use cryptocurrency or have a digital wallet at the time of purchase.