Zepeto is a South Korean social media app that lets you create a 3D digital character, or avatar, from a photo of yourself. So when Gucci released pieces from its ready-to-wear collections for sale on the app last month, Zepeto head of global business Rudy Lee personally jumped at the chance to buy and wear them.

Lee’s new fashion looks proved popular. While exploring the Gucci Villa — an interactive space created by Gucci within Zepeto — Lee’s avatar was quickly approached by multiple other players asking to go on a date. “People in Zepeto are very much on-trend with the cool and expensive items,” says Lee. “People go to great lengths to access fashion that differentiates.”

The drop on Zepeto, which has more than 200 million global Gen Z users, was just one of Gucci’s recent forays into the metaverse. Over the past year, Gucci has embarked on a broad strategy to create and occasionally sell digital clothing and accessories for avatars and games. This generates revenue for the luxury brand and appeals to gamers by allowing them to express themselves, says Robert Triefus, Gucci’s EVP of brand and customer engagement, who outlined the brand’s gaming strategy at the recent Vogue Business and TikTok Technology Forum.

“It's diverse, it's inclusive, and in that sense, it's an adjacent community to fashion,” he says. “Games today have a strong correlation with the idea of expressing yourself.” Gucci had been evaluating the opportunity for at least three years, but the pandemic served as a catalyst, as with many technologies. Over the past year, Gucci has partnered with Tennis Clash, The Sims, Genies, Roblox, Pokémon Go and Animal Crossing, in addition to its own Gucci Arcade, introduced in 2019, and its Sneaker Garage, launched in October 2020.

In many cases, Gucci was an early mover or the first luxury brand to play along, but more luxury brands are now using games to tap into the cultural zeitgeist. This week, Burberry, which has also designed its own games, announced a first external gaming partnership with Tencent’s Honor of Kings, a mobile game with 100 million daily active users. Over the past year, Net-a-Porter has created an island on Animal Crossing, complete with Isabel Marant avatar outfits, and worked with multiple Chinese designers to link avatar clothing to items available on Tmall. Balenciaga created an immersive game-like world for its recent fashion show, while Louis Vuitton extended its partnership with League of Legends. Fashion game Drest, whose avatar fashion is sold in real life via Farfetch, among others, was named by Fast Company as one of the top 10 gaming companies of 2021.

The gaming community is noteworthy both for its size and its disposable income. There are about 3.4 billion gamers worldwide, 27 per cent of whom are between 21 and 30, according to a July 2020 report from WARC, which estimates that almost 70 per cent have middle or high incomes. The global video game industry makes more revenue than the global movie and North American sports industries, combined, according to IDC.

Luxury engagement with this community is essential, says Abi Buller, foresight writer at strategic foresight consultancy The Future Laboratory. “Luxury brands have an opportunity to merge their aesthetic with that of existing gaming communities — allowing customers to create an alternative persona within games that not only reflects but also complements and elevates their physical identity. Digital embodiment and the opportunities for convergence within fashion and gaming are especially poignant now as shoppers increasingly find themselves in online spaces.”

While the opportunity is ripe, brands should tread cautiously. “Brands need to develop the same sort of brand aspiration and relationships that they have with their customers in the real world,” advises George Gottl, CCO and founder of retail design consultancy Uxus, who works with Selfridges, Nike and Levi’s. “The real world and the virtual worlds are not directly translatable. Brands will need to build their reputation from a very different perspective pointed toward a new audience, or they risk losing out on the consumer of the future.”

Here are more lessons from Gucci’s year of gameplay.

Follow the users’ lead

One of Gucci’s first external partnerships was with Los Angeles-based Genies, which lets people create their own avatars to use in other apps. Gucci observed how consumers want to express themselves, quickly appreciating that authenticity would be fundamental, Triefus says. In-game appearances had to be both appropriate for the brand and also authentic to the game’s users and its unique identity. Gucci has created a combination of original pieces that appear only in certain environments (as with Super Plastic) and recreated pieces produced in real life (as with Genies).

For The Sims, a life simulation game, Gucci first approached hackers who build experiences in the game before approaching the developers. This helped build credibility, and game owners have been appreciative of Gucci’s groundwork, Triefus says. “If they don’t believe in what you’ve done, you can quickly create quite a negative reaction.”

Zepeto says additional luxury partnerships are coming this spring. “Gucci engaged us pretty early on, and they took a long time to flesh out what they wanted to do. They were super flexible and very aware of our platform,” says Lee of Zepeto. Its user base is 70 per cent female, with female mobile gamers 79 per cent more likely to make an in-app purchase, according to Newzoo.

Gucci curates its appearance in games with as much attention to detail as it spends on physical appearances. To mark creative director Alessandro Michele’s first virtual sneakers in October, Gucci launched three outfits in Roblox, a Silicon Valley gaming platform that just went public, and in December, worked with Roblox creators to create additional designs. Endemic creators “love the idea of working with a luxury fashion brand. It’s a smart move because the community knows what will resonate”, says Roblox VP of brand partnerships, Christina Wootton.

Create hype and exclusivity

Many platforms are able to limit the number of items that can be claimed, or make it challenging for players to access certain items, replicating the sense of exclusivity found in the physical world. For its partnership with Honor of Kings, for example, Burberry created two in-game “skins” that players can pay to acquire in the game, including a digital-only outfit designed by chief creative officer Riccardo Tisci and a second that is a recreation of a runway look players can only access by paying to enter a draw.

For the launch of its partnership with Pokémon Go and The North Face in January, Gucci had the idea to create a teaser that the companies were working together, says Erica Kovalkoski, head of brand partnerships at Niantic, Inc., based in San Francisco, which owns the augmented reality-centric game. This “broke the internet”, she says, creating intense anticipation and speculation on social media. Within a few days, millions of avatar items were redeemed while the corresponding (physical) store collection sold out in less than a day.

Kovalkoski says that brands have expressed interest in projects that generate store traffic in the months ahead. According to a third-party study conducted in 2020, real-world players of the game visited luxury stores two to six times as much as other smartphone gamers, and 84 per cent of players have visited a business while playing.

Games are square one

Gamification is extending beyond traditional games to experiences in which consumers are engaged, Triefus says. For example, in its app, Gucci offers AR try-on for accessories such as sneakers and glasses and has created the Gucci Sneaker Garage, allowing people to assemble their own Gucci sneaker design. “The most successful brands today are the ones that create stickiness between the brand experience and the customer, and that stickiness is based on a pleasurable and engaged experience,” he says. “We believe in every experience we are creating there is the opportunity to bring gamification. It will become increasingly ubiquitous.”

Also extending beyond games is the notion of digital assets. It is only a matter of time, Triefus says, until a brand like Gucci creates and sells a high-value NFT, which is blockchain-based tech that allows for ownership of unique digital items. This is something that will “materialise quite soon”, Triefus says.

Triefus says it’s fundamental to curate everything with great attention to detail and be willing to test and learn. “We might experiment with a new game that needs to find its feet, and not every game or gaming experience does that,” he says. “Be prepared that a game or experience that you thought might gain traction isn't one the community embraces. If you are selective, you can live with that.”

This article was written by Maghan McDowell, and first appeared on Vogue: https://www.voguebusiness.com/...