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Wednesday, May 18, 2022

Virtual Brand Group Demystifies Metaverse

Justin Hochberg spent most of his career in entertainment, creating and producing numerous shows for TV audiences. But for his latest venture, Virtual Brand Group Inc., his canvas is the metaverse, a network of virtual worlds online where users deploy avatars to play games, interact, attend events, and buy or trade virtual and real commodities.

Hochberg’s timing is spot on. Digital realms such as Roblox, Fortnite, Decentraland and Sandbox are garnering interest from fashion, sports, tech, entertainment and other companies that are looking to participate in meaningful and lucrative ways.

 
“When brands try new technologies they often struggle, and so we basically are the bridge between (the metaverse and) the CEO who realizes, ‘We better get into this now’ and then has the second realization of ‘we don’t have the talents to figure this out,”’ Hochberg said. 


Sustainable monetization

Virtual Brand Group, based in Hancock Park, acquires the rights to represent brands in the metaverse and creates for them ongoing opportunities to engage with consumers. Its recent projects include last month’s launch of Forever 21 Shop City, a fashion retail experience on the Roblox gaming platform for F21 OpCo., which does business as Forever 21. Hochberg pitched the Lincoln Heights-based retailer, which is owned by Indianapolis-based Simon Property Group Inc. and New York-based Authentic Brands Group, and Forever 21 was on Roblox within five months.
 
Forever 21 Shop City enables users to own and manage their own Forever 21 store, buy and sell merchandise, stock inventory, assist customers, operate the cash register, hire nonplayer characters as employees, and decorate their storefront windows. The stores’ exterior can also be upgraded via several architectural themes, including Cottage Core, FutureScape, Cyber Punk, Eco-Urban and Malibu Mansion.

 
“With Forever 21 Shop City, our goal is to expand how we engage with customers, extending our presence and product in new ways,” Forever 21’s Chief Merchandising Officer Katrina Glusac said in a statement. “We’re excited to provide a new space on Roblox where our fans can connect with their community and bring their own vision of Forever 21 to life.”


That engagement crosses over into the real life — or IRL, as the kids call it.
“In Roblox, you can sell fashion and clothing, you can sell upgrades and game passes, but we do more — we actually connect the metaverse with the ecommerce,” Hochberg said.


Forever 21’s website features Roblox versions of some of the retailer’s clothing so that shoppers can purchase them together at a discount and be able to twin with their avatar, he said. But the interaction does not end there.


“When you buy an item in Roblox, we’ll offer you a coupon to go to the ecommerce,” he added. “When you go to the ecommerce, we offer you a coupon to find a hidden item in our game. If you collect enough hidden items in our game, we then we offer you an ability to redeem that in the real world. When you redeem that in the real world, and collect enough of those, we unlock a secret area of the game. This goes on and on and on … We call that the infinite marketing loop, connecting the metaverse and the real world simultaneously and gamifying it.”


Hochberg also pointed out that Shop City is not a short-term marketing stunt, but a sustainable effort that’s continuously updated.
“We’ve been in business for three weeks, and the goal is not to have nailed it in the first three weeks,” he said. “The goal is to build a $30 (million), $40 (million), $50 million business over the next two years, and so every day we are refining the game. Every month we’re creating new types of fashion and innovative stuff.”


Hochberg founded the company last year and has 10 core employees who focus on design, storytelling, development and branding. The whole team works remotely and meets — you guessed it — in the metaverse. He also depends on numerous freelancers when projects are in full swing, including about 130 of them that helped launch Shop City within a five-month time frame.

 
“I’ve been working on this behind the scenes for about a year and a half, but we technically just launched in June,” he said. “And then by December we were up and running with our first brand … We have a pipeline of approximately 19 different companies in five sectors that we are engaged with to launch in the metaverse in the next six months.”


Hochberg said he can’t name names “because we haven’t rolled them out,” but added that “they range from the biggest motion pictures to the biggest TV shows, to some of the biggest sports leagues in the world to the biggest most successful car companies and entertainment things.”


How to navigate the metaverse

While some brands are ready to jump into the metaverse — Microsoft Corp. announced last week it plans to acquire Santa Monica-based video game publisher Activision Blizzard Inc. for $75 billion — others are still on the fence.
“The list of the list of things that they can be challenged with are quite extensive: ‘We don’t know how it works. We don’t know how to get started. We don’t know what the value is. We don’t know whether we want to trust someone with our brand. We don’t know whether Roblox is the right thing or whether an NFT is the right thing,’” Hochberg said. “It’s usually about inertia and lack of understanding.”


He added that there are three things brands should consider when nav
igating the metaverse.
“One … take it seriously,” he said. “The value of the money generated by company and sale of goods in the metaverse will surpass the total value of internet sales and value of companies in half the amount of time that the internet took, in my opinion.”
Second, he advised against thinking of it as a marketing stunt.

 
“Approach it as a new part of your entire business,” he said. “It’s not siloed. It’s part of everything. … It’s meant to be connected.”
Lastly, he said, assign the work to creators from the metaverse community who understand it and not to a “bunch of 45-year-old people who have never played Roblox or Decentraland or owned anything in the NFT space. Brands that colonize new tech platforms always fail.”

Mediha DiMartino
Mediha DiMartino
Mediha DiMartino covers retail, manufacturing and the ports. She can be emailed here.

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