Direct to Avatar economy is coming👛

The Direct to Consumer (DTC) business model forever changed how we shop, cutting out the middleman. The next evolution of sales channels will bypass humans completely, selling straight to our avatars instead.

Before we dive in… here are the terms you need to know:

WHAT’S UP:

Direct to Avatar (D2A) is gaining momentum and our digital lives will never be the same.

Luxury brands across verticals are leading the future of the D2A movement.

• Luxury Fashion was the clear first mover with D2A — everyone wants an avatar that is dressed to reflect their personal style. Brands like Balenciaga started creating skins for avatars in games like Fortnite.

• The next wave in fashion’s digital foray is being led by brands like RTFKT Studios — a developer of custom sneakers designed for video game enthusiasts. The company offers limited edition custom kicks, along with unique virtual versions for users to try on and unlock special effects.
• Now an unexpected industry is helping to scale the momentum: Automotive. Elon Musks’ Tesla and luxury automotive brands like Aston Martin, Maserati, and Rolls Royce all have virtual versions of their cars within video games published by tech giants like Tencent (owner of apps like WeChat plus gaming faves like Fortnite and Call of Duty).
• Why is D2A gaining momentum for luxury brands now?
• It creates a way to access & engage with younger demographics
• It provides a more meaningful & impactful way for companies to connect with consumers beyond digital ads & content
• People are increasingly more interested in self-expression in the virtual world — these brands are leaning into that
• Brands recognize that consumers are spending more and more time in the metaverse. These brands want to be present in these spaces too

One thing is clear, the current Direct to Consumer (D2C) model of manufacturers selling directly to consumers is now table stakes.

If you want to engage people in the metaverse, you should prepare for a new model, Direct to Avatar. D2A refers to an emerging business model where brands and creators can sell their products directly to a person’s virtual avatar (digital identity).

WHAT’S DOWN:

The concept of DTC — it is now a ubiquitous part of consumer’s lives.

WHAT’S NEXT:

Brands & businesses outside of luxury leaning into the D2A movement leveraging all 5 Drivers of momentum

1. Disruption: D2A is the new D2C — brands can now go straight to consumers’ virtual identities, bypassing their physical beings

2. Innovation: Digital product innovation with D2A allows for infinite creativity because anything is possible in the digital realm. Creating brand FOMO in the metaverse requires even more creativity than in the physical world

3. Polarization: Brands are leveraging D2A to reach the niche affinity group of consumers already engaging in the metaverse

• This high velocity affinity group wants to engage — D2A creates an opportunity for brands to engage this impactful group and turn them into fans
• Brands that get in before D2A blows up (and gains mass) will break through and be perceived as culture leaders rather than followers

4. Stickiness: D2A brands can help consumers tell their personal story / express themselves in the metaverse

• An evolution of customization — D2A collections allow users to fully express themselves in the virtual world, more than they might be comfortable doing with their physical identities
• D2A is already starting to scale through social media — Users of the popular messaging apps like Snapchat have already adopted avatars and are playing with customization through their own bitmoji selves
• Mark Zuckerberg declared the metaverse as his next frontier, one that Facebook is preparing to conquer

5. Social Impact: Inclusive and adaptive → everyone has the ability to participate. Anyone can pull off wearing digital clothing, acquire aspirational brands, and be who they feel they really are without limits or restraints.

WATCHOUT: Uncanny Valley Theory…

(The one phrase we didn’t warn you about at the start…)

• The Uncanny Valley hypothesis predicts that humans will be weirded out by “digi-sapiens” (aka “digital models” — avatars that look like digital versions of humans) — feeling threatened that they are trying to replace our physical identities with digital ones.
• As “digital models” take the place of physical models and 3D friends replace real world friends, our true selves might be left feeling eerily uncomfortable — and left out in the cold.

Best Days Ahead,
Mike