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New KZero report: Luxury Brands and Virtual Goods

luxury brands coverToday we’ve released our latest report – Luxury Brands and Virtual Goods.

The report explains the options available to luxury brand marketers when considering virtual goods strategies.

Companies referenced in the report include L’Oreal Paris, Hublot, Rayban, Mercedes Benz and Armani.

Examples of marketing initiatives and campaigns explained in the report:

  • Product launches
  • Competitions
  • Metabranding
  • Customer engagement
  • Brand extension
  • Advertising

The report can be ordered here.

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Will luxury brands drive the growth of virtual goods?

The purchase of virtual goods in virtual worlds is increasing and most worlds now incorporate this element into their propositions. But which categories or types of products will be most successful from revenue-generation and demand perspectives?

Picture 1Backing up on this point slightly, let’s talk about the area of revenue sharing for brands in virtual worlds. By this, I mean real world brands earning out of virtual transactions.

This is a concept I think we’ll see a lot more of in the virtual worlds sector. And it makes sense. If a company brings their brand into a third-party world and part of the offering is to allow residents/users to purchase virtual branded items, then surely the brand is entitled to a share of revenue. I think we’re about six months away from seeing this type of arrangement take hold.

Back to luxury brands.

Continue reading →

DM News covers L’Oreal Paris campaign

It’s been over for a few months now but interest in the campaign we created for L’Oreal Paris in Second Life continues. DM News is running a feature on the approach we took. Full article here.

9 Nov

Come on in. Digital Dollhouse opens the door to a brand-new type of fun.

Offering a brand new world of fun, charm and creativity, Digital Dollhouse will open its doors today.

Aimed at girls of all ages, Digital Dollhouse is an online ?¢‚ǨÀúPlayspace enabling children to combine the traditional dollhouse play with the latest technologies associated with immersive communities and creativity.

Based in Los Angeles, Digital Dollhouse is the brainchild of Jesyca Durchin, an award-winning producer of girls software for companies such as Mattel and Disney.

Seeing the huge potential in creating a brand-new online category of ‘Playspaces’ and the value in forging a relationship between traditional and online past-times, Digital Dollhouse was born.

Visitors to the Playspace are presented with breathtaking and authentic looking houses which they can easily transform into homes by selecting realistic furnishings and accessories, accurately modelled on real-world items.

Continue reading →

3D avatar fashion with Frenzoo

Currently in closed alpha, Hong-Kong based Frenzoo is aiming for the popular (primarily) girls market across Asia Pacific (initially), or as they put it ‘3D fashion and lifestyle for everyone’.

As Techcrunch reported back in May 2007, co-founding Skype engineers participated in the Series A funding round.

Three real world brands are already signed up for the Frenzoo launch, namely Liucia (women’s shoes), Dusty (men’s fashion) and MayMayKing (handbags).

The K Zero case study on Luxury Brands gives marketers in these sectors a great insight into the virtual worlds space.

Some sample imagery is shown below for Frenzoo – maybe one to add to the list…..

Continue reading →

Updated: Competitive rivalry in virtual worlds. Part 1/5 – The power of buyers

What are the factors influencing the level of competition in the metaverse sector? Applying the Porter’s Five Forces framework for assessing specific areas affecting the intensity of competition sheds a great deal of light into the sector.

The Porters Five Forces model identifies the following areas:


The factors shown in the chart all combine to influence the level and nature of competition in any sector. And, importantly can identity key strategic areas for virtual worlds to address in order to maintain and grow market share.

Continue reading →

Virtual dress sells for $1,700 (that’s real money)

Last week I wrote about how luxury brands may hold the key to stimulating and driving the virtual goods (clothing) sector [readWill luxury brands drive the growth of virtual goods?].

New World Notes reports today that as part of the American Cancer Society’s Relay for Life campaign in Second Life, a virtual evening gown made by Eshi Otawara was bought for L$460,000 – approx. $1,700. Impressive – exciting – strange? – expect a whole lot more of this.

Two points:

1. People are starting to pay larger sums for virtual goods

2. Non-profits can successfully leverage virtual worlds for fund-raising

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Luxury Interactive Conference, NYC

I’ll be in NYC at the Luxury Interactive 2008 conference this coming week (Jun 16 – 19). Speaker companies at this event include Facebook, Cartier, Sony, Bloomingdales, Estee Lauder and Lacoste. Ping me if you’d like to meet up whilst I’m there.

Related info: K Zero Luxury Brands in virtual worlds case study.?جø¬?

Forbes: How Technology Can Save Retailers

Forbes writes recently about how the fashion industry can benefit from understanding and adopting new mediaopportunities, including virtual worlds.

‘For the fashion industry, traditionally a late adopter of technology, it has been a particularly steep learning experience even though pre-teens and teens directly and indirectly control billions of dollars in purchasing power.’

Creating deeper and more emotive based relationships with this hard to reach demographic (such an over-used term – apologies) is the key and this means going way beyond the TV spot.

Continue reading →

Full length L’Oreal Paris machinima

The K Zero homepage is currently showcasing the short version of the machinima for the L’Oreal Paris SL campaign. Here’s a longer version with more time spent inside the virtual retail stores.

K Zero services

For brands

For virtual world owners

For investors and VC’s


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