Source: Pacsun
Is Pacsun’s mall on Roblox the start of something ‘metaversally’ big?
Pacsun is going all in, virtually speaking, on Roblox.
The retailer, which began introducing digital items on the online game platform last June, has introduced PACWORLD, a fantasy interactive game that enables users to own and operate their own mall with the goal of making it more profitable than others in the space.
“Innovation and creativity are at the heart of Pacsun’s brand voice, and we view our audience as the cultural pioneers of the future. As we are catering to a fully digital generation, we recognize that Gen Z values community and accessibility more than any other generation, and we joined Roblox to further build that connectivity with our consumers,” Brie Olson, Pacsun president, said in a statement. “Considering that they leverage Roblox as a point of socialization, we knew that in order to further our strong emotional resonance as a brand, we needed to continue to build alongside them in the gaming world.”
Pacsun has made digital its top priority. Michael Relich, Pacsun co-CEO, told RetailWire earlier this year that digital demand more than doubled from 20 percent for the chain since the start of the pandemic. The retailer has focused more of its efforts on store-based fulfillment, to reduce the time it takes to get orders to customers and cut costs.
The company in the past year has focused more of its strategy on using non-fungible tokens (NFTs) and virtual reality to drive engagement with its teenage to mid-twenties customers.
Pacsun moved into the NFT space with Pacsun Wave in November. It followed that up with the release in January of Pac Mall Rats, cartoon rats that wear Pacsun merchandise. The retailer dropped its second in the Mall Rats series yesterday with Reebok coming on as the chain’s first brand partner in the campaign. Pac Mall Rats are available for purchase through an auction on Open Sea with bids starting at $250.
Ms. Olson, speaking at Shoptalk 2022 earlier this week, said the retailer had been talking about entering the metaverse for a few years and has done so in steps starting with being among the first retailers to accept cryptocurrency as payment, Sourcing Journal reports.
“Step two was really trying to take a step back and look at how the consumer’s already integrated into the metaverse, and that was through the lens of gaming,” she said.
Discussion Questions
DISCUSSION QUESTIONS: Is Pacsun on the right track with its metaverse efforts? Do you agree that accepting cryptocurrency is a key element for competing in the space?
Poll
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Brian Numainville
Principal, The Feedback Group
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Given the demographic to which Pacsun caters, this could be a big hit for Pacsun — until these gamers get bored or grow up and, hopefully, a new generation takes over where the last one left off.
This is a great move from an advertising and marketing perspective and should help Pacsun forge better and deeper connections with its customers. Moreover, there is an opportunity to make money here. However one thing I will add – which seems to sometimes get lost in the metaverse hype – is that, for the vast majority of retailers, this is not a replacement for retailing in the real world, nor is it a substitute for getting the everyday basics of retail right. It makes me laugh to see brands building things in the metaverse while, at the same time, neglecting their assets in the real world!
You remind me of a scene from the movie “Moneyball.” They are all sitting around a table trying to identify “the problem.” Or, said another way, what is “the opportunity?” With so many moving parts, it’s difficult to prioritize in retail right now.
While I am often skeptical of the viability of brands selling real merchandise in games (Second Life is a relevant example if you are old enough to remember that) I think the Pacsun strategy has potential. Fortnite’s recent controversy around the supposed end of building mode highlighted how much people enjoy building worlds in games, and Pacsun gives gamers a chance to create their own worlds, build communities, sell branded (and verified with NFTs) merchandise, and be rewarded for their efforts. The trick will be sustaining interest beyond the initial hype with new product drops and rewards that keep people engaged.
It’s great when there is a pioneer willing to go in and explore new territory and pave the way for others to follow. It will be interesting to see how it unfolds — with one caveat. Success for Pacsun and their demographic may or may not mean potential success for other brands and retailers with very different customer profiles. It’s going to take a couple of different pioneers to create a couple of different learning curves in order for a wider spectrum of brands and retailers to go to school on these initiatives.
Pacsun’s approach to operating in the metaverse is really smart and strategic. Pacsun’s core customer demographic is 18 to 24, so by bringing the brand into the metaverse and specifically Roblox, Pacsun is simply meeting shoppers where they already spend their time.
I also think Pacsun is on track with the way it creates virtual products. From the Mall Rats to the Roblox Golden Wings, Pacsun is embracing the element of fantasy and fun that’s present in the metaverse in a way that resonates with shoppers, instead of just translating their physical products into a digital world.
Our society will undoubtedly be spending more time in the digital world with each year that passes. For retailers looking to add an additional revenue stream that has scaling that they have never seen before, it is an easy decision to make this investment now.
Yes, it is early and they likely won’t see return on this investment in the people and technology they have had to add to support this initiative for many years to come — but the upside is enormous and it feels like a safe bet to be an early mover here.
Yes, Pacsun’s metaverse efforts wisely blend gamification, personalization and retail’s digital evolution. Gamification offers a fun and sticky social experience. Consumers stay engaged as they explore a variety of virtual games that grow into part of their daily rituals.
Personalizing their Roblox experience gives young users a sense of power they otherwise lack in the real world. They also celebrate opportunities to express themselves creatively. (My son’s 2022 birthday cake design was his Roblox avatar.)
When the Lakers’ and Clippers’ home changed its name to Crypto.com Arena, it symbolized that cryptocurrency is the future of commerce. Crypto will continue to grow as the metaverse matures.
Figuring out the metaverse is going to require trial and error. Some things are going to work while others will fall flat. This could work well for Pacsun’s demographic. I totally agree with Neil’s comment that this isn’t a replacement for real world retailing nor doing retail well – it is a new avenue for potential growth and, personally, one that I think is most interesting.
There is no wrong way right now. The playbook hasn’t been written, and being a first mover will certainly have its benefits. Pacsun has really been leaning into the interests of its target audience, like their gender-neutral kids line Colour Range which they launched last year. Although accepting new payment methods is one way to go, there will likely be less friction with more traditional methods being added as the metaverse gains more momentum.
I am sorry. I just don’t understand how this type of programming will have any significant impact on shoppers. It seems it just gets in the way of finding the product one wants.
I thought PacSun was an apparel brand and store. Honestly, I am not sure what will work in the Metaverse. Selling digital products to virtual characters with blockchain fueled currency is above my pay grade. I think we are experiencing what happened when ecommerce started. Retailers replicated their brands as digital catalogs even with page flip technology. The industry finally realized the value of true unified commerce and how each channel has its own role that enhances the total customer experience. I do applaud PacSun and others who are at least early into the Metaverse and trying. They will be the first to figure it all out. And, when they do, I hope they tell us! 🙂