Saturday, 19 January 2008

Benchmarking the Boutiques

With her long comment on my virtual money blog post, Gwyneth Llewelyn started me back on my search for in-world business possibilities.

I thought I should begin by talking to someone with hands-on experience of virtual shopkeeping. I discretely asked friends for the name of an avatar I might interview, and was introduced to a businesswoman who runs a small shop in a distant sim. She willingly answered my questions, but for reasons which will soon be apparent, she desires to remain anonymous. I will just call her Madame Irma.

I met Madame Irma in her boutique, and started off asking questions about shops and shopping in Second Life. She wondered at my curiosity. I told her that I wanted to benchmark Second Life business practices, and was in search of the best stores in Second Life. In my Funny Money post I had summarized Prokofy Neva's history of Anshe Chung's shopping malls, so I asked Madame Irma where to find the best shopping malls on Second Life.

"Malls?" replied Madame Irma, nonplussed. "Nobody needs to shop in malls any more. Only a newbie would travel to go shopping. You just open Search, go to the All tab, and type what you're looking for. When you find the name of a shop that interests you, you can teleport there. But you can also shop on the SL Exchange Marketplace or at the Onrez site."

My personal experience of shopping had started in my own neighbourhood, with the purchase of a roman chair at Torin Golding's Roma outlet in Colonia Nova. I had clicked on a picture of the chair to pay for it, and received the chair into inventory, with no shopkeeper present. I had then gone to the large Emporio Romani store in Colonia, which is full of panel pictures of clothing, but had wondered how to try something on before buying. Madame Irma explained that some shops let you try samples. To demonstrate, she put on a sample of hair that she had in her inventory. The hair sat neatly in place, but above her head there hovered a box, which could only be removed by buying the sample. She took the hair sample off and put it back into her inventory.

I realised how little experience I have with Second Life shopping. I should get out of CDS more often and see the (virtual) world. But my education was only beginning. Madame Irma started talking about speciality shops. "RAC is the best for skin," she explained. "For sexbeds it used to be Strokerz, but now there are many shops. And XCITE corners the market on, well, penises and such." I already knew something about this, having read the Wired Guide to Second Life. Madame Irma went on: "All newbies get taken to XCITE at some point. And there are nice themed malls, like the BDSM malls."

It was my turn to be flabbergasted: "You said nobody goes to malls anymore. But now you say there are whole malls just for bondage, dominance and sado-masochism." Madame Irma could only confirm: "OMG yes," she assured me, "BDSM is very big on Second Life."

Talking about skins reminded me of a web page that I had seen, about a sim with a shop that sells dragon avatars. I mentioned to Madame Irma that I fancied the idea of being a dragon for a while. "You are so bored," Madame Irma replied. I was afraid that she had said I was "boring," but I checked the chat history, and she had indeed said "bored." However, on Second Life "bored" appears to be a derogatory term. After about a quarter of an hour in-world, some 50% of newbies announce: "I'm bored." Those are the ones who never come back. Myself I've been endlessly fascinated since the first moment, so my reptilian fantasies are not from boredom. I just think it would be great fun to fly around as a huge dragon. I could scare little children…. I could eat newbies! Second Life tends to bring out the hidden side of everyone's nature. For some it is BDSM. Apparently my hidden nature is to be a fire-breathing griefer.

Talking with Madame Irma made me realise that it is much too early for me to do benchmarking about Second Life businesses. I've got to do more serious Second Life shopping myself, before I can start thinking of selling anything to anyone else.


dyerbrookME said...

I had to chuckle at Madame Irma's insistent that "nobody shops in malls anymore".

This was the mantra of all the snotty oldbies in 2003-2005, when they trashed Anshe's malls as tacky. It's definitely a class and taste thing. The prim divas, as I dubbed them, thought everybody should fly out to their remotely-located boutiques in the core sims, because the stores were prettier, less laggy, and had no avatar traps.

But they sure had to scramble when newer people began to put their chain stores all over the malls Anshe made -- and I and others began to add to Anshe's huge collection. The fact is, people *do* shop in malls. I and other mall owners who show only modest traffic wouldn't keep them open if we didn't have tenants; and tenants are very harsh task mistresses -- if they can't make enough sales to pay for their rent and make a profit, they leave you instantly (Anshe used to keep them trapped for 4 week advance payments, and not offer refunds; I do.)

There are some very great shopping sims that are essentially higher-end malls on private islands -- perhaps Madame doesn't think of these as "malls," but they are -- these range from sims like Tableau, where the old TSO FIC have all their stores, to the giant warehouse stores taking up whole islands selling prefabs and furniture.

You can't spit in Second Life without finding malls. They are everywhere. They start up enthusiastically and then many fail. But the amazing thing is that they succeed, too, because this received tekkie wisdom about the p2p isn't true at all. My poll is now illustrating this. People don't open up the map and use p2p unless they are educated to use maps and courageous and not fearing to land in a bush.

Most people teleport from search. But search is something they use not as is imagined, with "search all" but they use search/places filtered by place, that then orders (still) by traffic. They also shop from profiles, looking at people's picks, or fly around and see something inworld and then go to that maker's store. Word of mouth is very important.

The overwhelming majority of sales in Second Life are made through search ads. There is a tiny minority that makes their fortunes through word of mouth created for them by the old Linden feting (still visible in their media steerage and website features in showcase) and a small number who spend BIG on classifieds. They insist -- loudly on the forums, used by 2-5 percent of the user poopulation at most -- that "nobody" uses search and that it is "broken".

But the overwhelming number of smaller businesses and shoppers will tell you otherwise: search is how sales are made.

People who have little boutiques with special clientele they build up who use p2p or rather search/teleport without the map can't believe in malls -- they are culturally and economically alien to them, just like a shopper in New York at Saks Fifth Avenue isn't going to believe that most people go to the mall and shop at Wal-Marts or Sears. It works the same in SL.

In studying the economy of SL, you really very quickly have to set aside these blinders of culture and political leanings and really see what is happening in the field, and not be blinded by class tastes.


dyerbrookME said...

Also one other point, I always find absolutely HILARIOUS. Guess where the telehub mall still survives, persists, thrives? Guess where those, um, tacky, low-brow Linden-dictated engines of the economy still appear today?

In the classy high-end sims of Caledon. Yes, indeedy. TP in, and find yourself in a...erm...telehub. Indeed, it's an old telehub object taken out of the library to use for this purpose. Arranged in concentrtic circles/squares radiating out from this landing point are...gasp...stores...that the avatar has to walk by (be trapped in?!) on his way to his "p2p" destination that he plucked out of search. I find this one of the most laughable things every time I go to Caledon, or any other sim that fancies itself culturally superior to the mall rats.