Anna Musikhina is CMO for Digital Transformation and E-Commerce Acceleration at L’Oréal, looking after everything from E-commerce and business to data, advocacy and consumer research and market insights. Her experience and understanding of the digital world have led her to naming virtual goods as her Shiny New Object. Here’s how brands should enter this growing market.

As people spend more time in virtual worlds, whether in gaming or interactions with other brands such as Nike, we are also spending more money on the virtual goods that are offered in those worlds exclusively. So, why shouldn’t brands spend their time and energy into this area of digital marketing?

The NFT market is set to grow exponentially

The size of virtual goods market is estimated at around $50 billion for last year. This is already a huge economic impact, but it becomes even bigger when considering that some projections put it at $500 billion in the next five years.

As people use NFTs more, they are also willing to pay more for them. This is no longer exclusively the realm of gaming. In fact, real-life fashion brands like Balenciaga have done cross-overs with games like Fortnite. Moreover, purchasing virtual goods can actually become an entry point towards purchasing more expensive “real-life” equivalents. For example, a Balenciaga bag might cost a few hundred dollars, but only £1 in the game – it’s a simple and effective way to reach a new audience for that brand.

Virtual goods open up new opportunities for creators

The virtual world is not relevant just for selling, but also for creating. The increased popularity of virtual goods allows more creators to make a name for themselves and to collaborate with brands they might not have otherwise had a chance to contact.

It’s also exciting to see how brands embrace new creators and support them.

From marketing to real-life direct revenue streams

Today, the virtual world represents a digital marketing opportunity first, before a full-on direct revenue stream. While it belongs more in the marketing side of a business, however, it can develop into a bigger product development area that yields real growth potential for brands in the future.                        

Virtual goods are therefore important in branding, as a potential business revenue stream, and as the opportunity of new creativity and connection with artists, co-creating a new brand implication in the virtual world.

The host of the Shiny New Object podcast is Tom Ollerton, founder of Automated Creative.