Second Life for Retail Sales

My last few posts were addressing the use of Second Life for virtual meetings. I chose that because it was a fairly mundane but important and easy to implement application of virtual world technology. Next I want to turn to the use of virtual world technology for retail sales. Several companies such as Dell Computers and a couple book sellers have attempted to come into Second Life to sell their products. These attempts have ended up as abysmal failures casting a lot of doubt on the viability of Second Life, or virtual world technology, for retail. Personally, I believe that this technology has enormous potential for retail sales and will provide some examples over the next few posts. However, in this post, I would like to offer some basic principles for achieving a successful retail presence in a virtual world.

First, don't try to replace the web! The web is very, very good at what it does. It is a big interactive document which allows you to get information about products and then purchase them. Hence, any retail application in a virtual world should link back to the retailer's web site to complete the sale. Web technology is cheaper, faster and better at this and it should be used in conjunction with virtual world technology. Virtual world applications should never attempt to replace web applications. They should, instead, augment them.

Second, use the virtual world for what it does best. I will provide several examples of this over the next few posts. However, for now, suffice it to say that there are things you can do in virtual worlds that you cannot do on web sites and that should be the focus of retail applications in the virtual world. What are some of these things? We, you can try on clothing in a virtual world. You cannot try it on at a web site. You can test drive a car in a virtual world. You cannot drive it at a website. You can demonstrate how to use a product or have a speak explain it in a virtual world. You cannot do that easily at a website.

Third, take advantage of the social interaction available in a virtual world. When you are on a web site looking at a product, you may be there with hundreds of other shoppers. But you cannot turn to them and ask what they think. Nor can you turn to a representative of the retail company and ask questions. Both of these are achievable through awkward means on web sites. For examples, many websites have product reviews. And often you can IM somebody for technical support. However, nothing beats just turning to another person and asking a question. And that you can do in a virtual world.

Finally, and this is critical, decouple your sales from the In World economy. If you buy a shirt for your avatar in Second Life, you will pay around 250 Linden dollars for it or the equivalent of one US dollar. If you are using Second Life to buy are real shirt, you will pay around $20 US which is around 5000 Linden dollars. Talk about sticker shock!! The disparity between the In World and Real World economies makes it very difficult to sell real products in-world. And, the solution is to decouple real world sales from the virtual world. In other words, provide all the pre-sale support through the virtual world. Then, when it is time to make the sale, go to the website and let it does what it does best.

Over the next few posts, I will explore specific retail applications and how they can take advantage of virtual world technology.