Should Companies Seek Virtual Worlds

October 19, 2007
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GRAND RAPIDS— Recent visitors to Herman Miller’s newest showroom included a man with bat wings, a purple-skinned diva and a chiseled character that would have been just as comfortable sparring with Lara Croft as testing out an Aeron chair.

The Zeeland furniture maker opened a storefront on Avalon Island last week, the busy piece of commercial property operated by London brand consultant Rivers Run Red in the Second Life virtual community. A collection of 15 original Herman Miller products created specifically for the three-dimensional social networking site is available for purchase at the showroom with prices ranging from (Linden dollars) L$300 to L$850, roughly $1.40 to $3.50 in U.S. dollars.

Marrying equal aspects video game and social networking site, Second Life is unique in the Internet world. Unlike other Massively Multiplayer Online Role Playing Games, most notably Worlds of Warcraft, the three-dimensional characters of Second Life, known as avatars, face no defined game scenarios. The network, operated by San Francisco-based Linden Labs, has more in common with social networking portals such as MySpace or Facebook and simulator games such as The Sims.

The community is driven by social interaction, the expression of individual creativity through customized features and avatars, and events. It has its own community organizations and media outlets.

Unlike other applications, Second Life has a thriving economy, with prevalent tradesmen, real estate speculators and consumers among the site’s several million users. This potential for commerce has attracted hundreds of companies to the site over the past year, with mixed results.

The Herman Miller store began as a research project by the company’s Future Insight Group concerning broader technology and social demographic trends. That eventually led to an investigation of Second Life, where the company was shocked to find that it was to some degree already represented.

“We very quickly found that there were people creating virtual products that were very clearly seeking to mimic the product offerings of Herman Miller,” said company spokesman Mark Schurman. “This told us there was some small business opportunity to fill a vacuum for our products that others were already attempting to do, but also from an intellectual property standpoint, the strengths of our trademarks and copyrights are only as good as our willingness to defend them.”

The virtual piracy was the catalyst for Herman Miller’s virtual presence. For a limited time, the company is offering its selections free to Second Life users that purchased the knockoffs, provided the individuals delete the counterfeit versions.

“We’ve taken great pains to make sure that our designs our exciting in the virtual world, and we hope to make the competing sale of knockoffs unprofitable,” Schurman said. “With that said, I’ve gotten a lot of people writing back saying they use the Aeron chair and how happy they are to see us there. These folks are clearly familiar with the brand, and although they are in Second Life, they do all have a first life.”

The company expects to receive some limited traffic to its online store, and to potentially earn some real-world sales as a result of its virtual investment.

Herman Miller is only the latest in a long line of notable brands to plant a flag in Second Life. Pontiac promoted its new Solstic GXP last year with a virtual model available at a Pontiac dealer on its Motorati Island. It also hosted concerts in a virtual representation of New York City’s Times Square and gave away parcels of land on its island to developers willing to create projects devoted to car culture.  Toyota offered a virtual version of its Scion last year. Other entries include Pizza Hut, Coca-Cola, the National Basketball Association, Evian, Vodaphone and many more.

“Wired and other magazines have started to point out that a lot of these companies are becoming disillusioned and frustrated,” said Eric Novesky, principal of in-world development firm Radio Active. “It’s my belief that they come in with certain expectations that aren’t realistic. They’re trying to apply their real-world business model to this new technology; and it’s not always going to fit.

“I liken it to when companies first started looking at the Internet. The ones that were successful found a new way to apply their business model.”

Novesky, known online as Itazura Radio, is a former CNC machinist and now a full-time Second Life developer based in Grand Rapids. He makes his living building Second Life presences for companies across the globe.

“I built some office buildings for a couple of clients that wanted an in-world presence but didn’t want to buy an entire island — an in-world corporate headquarters where people could find them,” he said.

In these scenarios, companies look for small parcels of land on one of Second Life’s mini-continents or rent portions of other islands. Novesky also provides real estate management services for owners of islands and other large virtual land masses.

Novesky believes that the lack of success for many companies is due to unfamiliarity with the virtual world’s culture. He cited the misfires of clothing designer Armani, which did not consult with any in-world developers before launching its largely unsuccessful virtual clothing line. The exact opposite occurred for American Apparel, which did turn to in-world consultants for its launch.

Local technology and marketing experts are skeptical of Second Life opportunities.

“At one point, it really looked like there would be a business case,” said Michael Carnevale, principal of local technology firm Carnevale ID, a vendor to VH1, Rock Star Games and other pop culture icons. “But I think it’s being proven that the people who spend a lot of time on Second Life aren’t the demographic that marketers want to reach.”

Carnevale cited a local event in Second Life hosted by Democratic presidential hopeful John Edwards, one of several politicians logging time in the virtual world.

“What showed up was a lot of cross-dressers and freaky people,” Carnevale said. “There are a lot of crazy people on there. This is a population with a whole lot of time on their hands, and they’re not looking for the traditional consumer experience.”

If a Second Life user buys a car, Carnevale reasons, it will be one that floats, flies and shrinks to pocket size. It won’t be a replica Pontiac.

“While it’s a huge social environment, it’s not huge as mass media,” said Charlie McGrath, director of creative services for Structure Interactive in Grand Rapids. “There really aren’t that many people out there in a position to see your message. From a cost-benefit standpoint, it doesn’t make a whole lot of sense.”

And to further complicate matters, Second Life has gained a reputation for lawlessness. Vandalism and pranksters are rampant, creating opportunity for a malicious attack that could serve to embarrass the company or wipe out its investment in virtual facilities.

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