The term “metaverse” has been associated with an all-encompassing online universe for decades, but some Web3 companies are now building bridges to the physical world with new brick and mortar stores and real-life events.
After making names for themselves through NFT and crypto projects, companies like the toy and entertainment startup Superplastic, the luxury brand Cult & Rain and others are experimenting with new ways to go beyond blockchain-savvy audiences to entertain, educate and sell physical products and experiences. In some ways, it’s right out of the playbook of many direct-to-consumer brands that began online before opening buzzy physical locations to catch new eyeballs, retail traffic and dollars.
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In late July, Superplastic opened a physical location in lower Manhattan that’s simultaneously a store, an art installation and an immersive event space: Visitors can buy many of the startup’s physical collectibles, see art from various collaborators and even access a secret room if they own certain Superplastic NFTs from various collections.
“It’s all about the intersection of reality and virtual reality and the blurring and then eventually dismantling of that line,” Superplastic founder and CEO Paul Budnitz said during a recent tour of the store before it opened. “The way we’re setting it up is when you walk out the back door, you can continue in the virtual world and it keeps going…I think of it almost like a spiral where all the pieces interconnect and that this space is really key to that.”
Unlike some Web3 companies, Superplastic wasn’t started with NFTs in mind when it was founded in 2017. The goal was to create a flywheel of content and commerce across various online platforms and offline products, but NFT collections with Gucci, Web3 darlings like Bored Ape Yacht Club and various celebrities helped Superplastic gain traction. However, the vision for Superplastic goes far beyond a store: Budnitz has bold ambitions to build his company into a Web3 version of Disney featuring Superplastic’s growing universe of online characters that have gained millions of followers on various platforms like Instagram, Twitter and Discord.
“Since the beginning of this company, experiences were the first thing on the list (of ideas) actually,” Budnitz said. “Then we were like, okay it’s the first thing that list, but we have to do all this stuff to build up to it. We’ve got to make the characters famous just like Mickey Mouse was famous…What happens is we’ve got all the pieces and we can create this sort of circle where all the pieces fit together now.”
Superplastic isn’t the only company that’s built out a physical presence. As more Web3 brands think about how to attract more of the general public, they’re rethinking old tricks: capturing their attention while people are out and about in real life. And yet, it remains to be seen how effective that strategy will be as the ongoing pandemic reshapes how consumers are living (and spending their time) and an unstable economy threatens their shopping habits.
Another is Solana Spaces—a retail entity associated with the popular blockchain platform Solana—which opened in late July inside New York’s Hudson Yards shopping center and features an NFT gallery, tutorials, and dozens of Solana-related physical products. According to Solana Spaces Founder and CEO Vibhu Norby, the idea is to educate people about blockchain uses beyond buying and trading crypto. For example, visitors can earn rewards by completing various lessons. Norby, who previously founded the retail-as-a-service company B8ta, said he’s been interested in exploring engagement models for retail.
“We felt like the crypto space was a good use case to reward people for their time, which is something the retail space badly needs,” Norby said, noting that Solana Spaces is operated separately from the Solana Foundation, a nonprofit focused on growing the Solana ecosystem.
In the first two weeks, Solana Spaces has attracted around 5,000 visitors, and Norby expects will be around 10,000 by the end of the first month. So far, Solana Spaces has sold tens of thousands of dollars worth of merchandise such as Solana-themed t-shirts and socks, according to Norby. The company plans to announce a second store later this week in a not-yet disclosed location which will be followed by others later. “We didn’t sign up to just do a single location,” he said. “We’re building an empire.”
Certain categories of companies benefit more from having physical locations, according to Matt Moorut, a Gartner marketing analyst experienced with a range of DTC and luxury brands. In the case of Web3, those with brick-and-mortar locations might better stand out beyond a Google search or other crowded online forums. Although there are a lot of upfront costs with a new store—real estate costs, inventory, visuals, staffing, etc.—he said DTC brands justify stores with sales while others are more interested in increasing their visibility. (Superplastic and Solana Spaces didn’t disclose the costs of their spaces.)
“Brick and mortar stores help to legitimize Web3 brands,” Moorut said. “Just being an NFT brand isn’t as much of a differentiator anymore.”
Others such as Cult & Rain are experimenting with short-term real-life events. To promote the launch of Cult & Rain new space in the metaverse, the company hosted a party for 300 people in London while others joined virtually. While much of Web3 has focused on expected digital assets, they wanted to show how the company is creating both physical and digital projects such as luxury sneakers and varsity jackets that are paired with NFTs. (The jacket features patches made in collaboration with a variety of other NFT communities.)
“Some people—and when I say some people I mean the majority of people—they just have to see it to believe it,” said Andrew Griffiths, Cult & Rain’s head of marketing. “That’s the reality. There are those that are more adaptive to Web3 and the digital world and some people who want to see, it, they want to pick it up, they want to feel it. That’s what we’ve been brought up with retail.”
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