September 7, 2020
After stumbling upon Lil Miquela a few weeks ago I instantly started researching the digital avatar space. The took me through the world of VR, AI and digital avatars as a whole. After going down the rabbit hole and seeing the latest release from Calvin Klein featuring Bella Hadid and Lil Miquela, it hit me. Digital avatars are the new influencers. And soon they will become a pillar in the fashion industries marketing, product, and overall business strategy.
Digital avatars have been around since the '90s but usually lived in niche internet and video-game circles; however, through advancements in technology (think Memojis) we're starting to see a new trend where digital avatars are making their way into the mainstream.
Before we dive into how companies can take a page out of Calvin Klein's book, let's us focus on the most popular avatar that managed to start this trend: Lil Miquela.
Created by Brud, fashion label Club 404 is nowhere near the size of Calvin Klein but they were the first to understand how to use Lil Miquela's influencer ability. Don’t forget that Brud also created Lil Miquela. This helps makes digital avatars so appealing from a brand and product perspective. By successfully creating a story and identity, Brud hacked millennial and Gen Z culture.
Lil Miquela x Club 404
Lil Miquela is young, racially ambiguous, identifies with social issues, and is all about positivity. Essentially embracing the personality traits of today’s youth culture. The most impressive thing about Lil Miquela's creation is that even though she is an avatar, her followers and fans still humanize her. This is the most interesting element and area to pay attention to. In this world of automation, we often forget that good marketing is personalization and creating a story that resonates at scale. Brud manages to check off all those boxes and creates the first step in the digital avatar playbook by creating a humanized digital avatar that generated a loyal following and real revenue.
The current influencer marketing landscape has exploded over the last few years. And rightfully so, Influencer marketing works.
The numbers speak for themselves, but influencer marketing is getting expensive and does come with its problems.
Influencer marketing gone wrong
I won't go deep into the horror stories of influencer marketing but you can see how this looks on larger scale by watching the Fyre Festival Documentary.
This is where new influencers come in. Instead of managing multiple influencers, you're managing your avatar(s). You're in full control of what your avatar says, does, and looks. You’re the creator of the ongoing story and world that your avatar lives in. Additionally, your avatar is timeless. They don’t age and given the right story, they can adapt to changing trends and shifts in human behavior. In order to ensure your digital avatar connects with others, you have to be HUMAN.
For my folks in UX, chatbot development, and conversation design, you’re aware of these elements already. For those of you not in these fields, this helps you create a natural and authenticate experience. Once you have these basics down, it's time to grow your influencer.
The opportunity to scale your digital avatars presence is going to depend primarily on your budget and a little creativity. For large brands like Calvin Klein, they could realistically create 5 different digital avatars that align with unique customer personas and scale them with a team of social media gurus. However, a smaller brand may only be able to create and scale one avatar. That's what makes scaling an avatar slightly difficult. It's one part a money game and another part a creativity game.
Club 404 could easily sell millions of hoodies but if the cost to maintain the avatar eats into their budget, they won't see the same level of ROI that a company the size of Calvin Klein could. They simply don't generate enough revenue from clothing alone to balance the cost of maintaining an avatar. Meanwhile, Calvin Klein, a company that has a large financial runway, would be able to maintain multiple avatars while keeping healthy profit margins. Additionally, they would be able to utilize my favorite strategy of building new products to create a multi-modal business model. An avatar opens the door for possibilities when it comes to additional revenue.
The Diigtal Super Model Portfolio
The Digtal Supermodel Roster
Though this article I primarily focused on how fashion brands can utilize avatars; however, I do see avatars creeping into other industries (mostly the entertainment industry). Essentially it's going to come down to your audience, budget, and creativity. With that being said, I see the biggest opportunity for growth being the fashion industry. If executed correctly, digital avatars can be the trojan horse that struggling fashion houses need to become relevant and diversify their businesses revenue streams. Only time will tell, but as a first mover, Calvin Klein might steal the market share before copycats can catch-up.
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