With brands increasingly incorporating both the look and feel of gaming environments in their shopping experiences, the IRL and URL worlds are set to become more interactive, moving forward.
The idea of gamification is relatively simple: You take a feature of a game — like the mechanics, the awards system or the design — and you apply it to another field. As consumers become more interested in spending more of their time online, engagement in digital spaces is becoming more important. Forty-five percent of Gen Zers and 43% of millennials feel most like themselves when they’re online, according to the 2022 New Consumer report.
For the fashion industry, the importance of gamification cannot be understated. As the pandemic has accelerated the rise of both gaming platforms and e-commerce, games and mobile shopping sites are competing for the same consumers.
Brands’ previous reluctance to try new types of content and strategies is ebbing, even for luxury brands. Overall, the luxury goods sector grew the fastest in the cross-border e-commerce category in the first half of 2021, according to ESW Global Voices. In China and South Korea, more than 70% of millennials, Gen Xers and baby boomers shop luxury online. The Western market is growing, but at a slower pace, with less than 45% of shoppers in the Americas and most of Europe buying luxury online. However, as Covid rates fluctuate, this number could easily grow in 2022.
Brands creating in-game content
Entering the metaverse or getting involved in gaming platforms has proven fruitful for brands in the fashion sector. As skins and in-game goods have become more valuable, luxury fashion brands like Louis Vuitton and Balenciaga have seized the opportunity. Balenciaga is even creating an in-house division of employees to lead the development of the brand in the metaverse. Apart from allowing the brand to sell goods in the digital space, entering the gaming arena opened it up to new consumer groups that are interested in fashion brands. Its aim was to make the shopping experience more interactive and engaging.
Louis Vuitton first entered the space by collaborating with League of Legends in 2019, when it created a physical collection and digital in-game skins. The LV X LoL physical collection was created in collaboration with Riot Games, the developers of the eSports game League of Legends, and sold out within an hour in the European market. Since, brand leaders at Tommy Hilfiger have noticed that users are re-creating the looks from its collections on platforms like Roblox, using digital design tools. Now the brand is capitalizing on the opportunity to officially enter the space. Roblox has 43.2 million daily active users, as of August 2021, showing the potential for collections launched on the platform.
For brands, the main issue is maintaining their brand identity in this new space and engaging a consumer base that isn’t easy to please. The Fabricant, a brand that launched to be digital-only, is now helping physical brands make the jump to digital. But, at the same time, not every game element by a brand needs to be a garment. Some brands are instead incorporating campaigns and seasonal experiences on platforms. Trinity Griffin, marketing specialist at digital design program Clo3D, said, “Digital and physical brands have a completely different goal. [Traditional] brands are looking holistically at their product and then thinking about how they’re connecting with the consumer. The Fabricant, [on the other hand,] is aiming to expand the brand identity of the brands it works with. It’s cool that they can share an experience or create a campaign using that brand identity, but in a virtual space.”
Rewards systems in games can be very addictive, with many gamers treating these experiences like sports, taking into account the involved rewards, losses and time spent in a game. And the concept of in-game monetization easily translates to other transaction-based processes, including online shopping.
At the moment, the majority of retailers’ gaming features are focused on online discounts. They often shower users with opportunities to engage in the shopping experience, like prompting them to hunt on the brand website for pop-ups or coupons. Last year, 88% of U.S survey respondents said that they had used coupons for shopping, while 77% of consumers said they’ve spent $10-$50 more than they wanted to when using coupons.
The high percentage of coupon users shows that there is an incentive for brands to gamify their shopping experience. But most of the brands using these strategies today are in the fast-fashion sector, like Shein. Shen’s strategies include coupon wheels, where shoppers on the site can spin a wheel to get a chance discount. And pop-up windows grant rewards to users with multiple log-ins a week. Both fast fashion brands and more high-end brands like Rebecca Minkoff incorporate personalized text messaging in their gaming strategy of bringing customers to their e-commerce sites and fueling brand loyalty. As the gaming and fashion industries grow, these kinds of strategies will become more prevalent.
However, monetization in the space is already causing issues, with studies showing the links between gaming and gambling. As fashion e-commerce develops on these strategies, it may be met with regulation to curb links between addiction and shopping.
Mobile shopping strategies
As users are spending more time online, the majority of their screen time is on mobile devices. Many brands are seeing this as an opportunity to develop mobile shopping strategies through apps and social media platforms. Both Lyst, the fashion search engine, and the e-commerce site MyTheresa are hoping to deliver the best in-app shopping experience. Lyst redesigned its app in the first half of the year. And, after releasing its IPO paperwork in May, MyTheresa showed that its mobile orders accounted for more than 50% of sales. Forty-two percent were made on the app.
The other side of mobile shopping is brands directly engaging with consumers through livestreams. In China, more than 200 luxury brands participated in Alibaba’s 11.11 Global Shopping Festival, a live-streamed shopping event in November. Brands including Gucci, Vacheron Constantin and Maison Margiela partnered with Tmall Luxury Pavilion to offer luxury services that are traditionally offered only in physical stores. Those included membership privileges, consultations with brand representatives and after-sale services. Talking about the event to Alizila, Alibaba’s news platform, luxury division chief and head of Tmall Luxury Pavillion Janet Wang said, “Consumers no longer think in terms of a break between physical and digital. They want a consistent, unified experience from brands, whether they are shopping online or offline.”
Retailers like Saks and Walmart and social media sites like Pinterest are all creating new partnerships with livestream shopping channels and influencers. According to a recent report by Coresight Research, the livestreaming market was poised to reach $6 billion in 2021 and is set to nearly quadruple in size within the next two years. As engagement grows through mobile shopping, livestreaming will become a form of shopatainment, combining entertainment, commerce and content.