How co-creation manifests in commerce in 2023

According to Wunderman Thompsons’s 2023 Trends Report, the future of virtual retail will be co-creative. Creativity is becoming the new status symbol for the dawning Web3 era and brands are adjusting their virtual activations to trade in creativity and co-creation alongside traditional products. And one should expect to see more brands democratizing vcommerce by offering creative control to their consumers.

By Romanita Oprea

Silviu Marincean, business director at VMLY&R Commerce, says that co-creation—in the sense of involving consumers in a brand’s creative process—has been gaining momentum for a while now. As technology continues to empower consumers, brands understand they need to create and maintain long-term relationships with them, and one of the ways of achieving this is by giving consumers platforms to express their creativity.

“This is one manner in which brands can create a sense of ownership and investment in the final product, which, if executed properly, should lead to conversion and loyalty. I would say there are two key elements for the success of any co-creation activation. One is to clearly state a benefit for consumers to get involved. This might be as straightforward as entertainment or exposure or it could be something more meaningful: getting them involved in a co-creative process that’s linked to a social or environmental cause they believe in. But it needs to be authentic and true to the brand’s values,” Marincean argues.

Read more about

Valentin Suciu (Jam Session): I hope that 2024 will bring back some of the joy and playfulness that make this ad industry sexy

read more

The second key element, according to him—and this one is a bit more challenging—, is brands’ willingness to relinquish some control over the creative process and instead act on consumers’ input, as dismissing their creative views is sure to backfire.

“But co-creation is only one piece of the puzzle, and not the sole thing that will shape the future of virtual retail, nor that of commerce as a whole. We are living through a commerce revolution, and we should no longer look at commerce channels—whether virtual or physical—in isolation, but pursue a holistic approach of the consumer journey,” added VMLY&R Commerce’s business director.

According to Ioana Cadir, co-managing partner at Jam Session Agency, everything has revolved around core business—selling products to people—for too long. Now retailers have learned to deconstruct the relationship with the consumer and create intimacy through co-creation by going beyond attempting to replicate physical stores in the digital space to getting the purpose and experience right for the individual consumer, thus turning the shopping transaction into a by-product of being in the space.

“While it is very exciting to experience it all at galloping speed, creating channels to enable customers to contribute their ideas requires some investment, so each company should have a clear estimation of the effort that a customer-driven innovation requires,” Ioana Cadir notes.

At the same time, as we can see every day, technologies like AI, cloud computing or IoT are converging into a wave of technological advancements that are reshaping the world in which we live. And as Andreea Copaciu, country manager at WaveCrest Romania points out, we are not that far from the things that were envisioned by science fiction writers 70 years ago. We are going through the 4th Industrial Revolution, and its impact is even greater than the invention of the steam engine.

“Of course, retail and brand communications are also transforming and evolving. The idea of the metaverse is not new, with digital environments replicating real life and emerging digital economies going back 20 years ago, when Second Life was launched. Still, where we are heading today is far beyond just a playground, with the multiverse market valued at more than USD 500 billion according to Bloomberg. This is facilitated by the ease of profit sharing with co-creators through Web3 and by the logistical ease of operating virtual shops. Although progress has been made, we believe critical mass hasn’t yet been reached. In fact, Zuckerberg himself has indicated that his metaverse venture, Reality Labs, would not be a real business story until the end of the decade. Some industries are more prone to this dynamic than others. For media/entertainment or fashion brands, it is easier to get consumers involved in the co-creation and virtual commercialisation of products than it is for FMCG brands, due to precisely the nature of their products,” says the WaveCrest Romania representative.

But the opportunity of bringing together a community of brand fans in a digital space, leveraging their creativity, and somehow merging virtual marketplaces and loyalty programmes is already here.

Metaverse commerce is growing and bringing with it a new set of retail formats. According to Bloomberg, the metaverse market is expected to reach USD 783 billion in 2024, up from USD 479 billion in 2020. Nike Digital is the brand’s fastest growing segment, now comprising over a quarter (26 percent) of the brand’s total revenue. Its virtual Nikeland experience on Roblox—which lets users customise their own Nike sneakers—had attracted 26 million people as of November 2022, and its Web3 products had generated USD 185 million in revenue as of August 2022.

Nike is letting consumers design and sell their own virtual sneakers as part of Dot Swoosh, its new Web3-enabled platform. The brand’s representatives describe the platform as part virtual marketplace, part VIP loyalty community, and part creator economy. The platform will be a place to buy and trade Nike’s virtual goods, participate in community challenges to unlock exclusive access to events and products, and cocreate Nike gear. Moreover, Nike has teased that Swoosh’s community challenges will expand to include competitions in which members can win a chance to codesign virtual products with the brand’s designers, even earning royalties on their sales. “We want to redefine what it means to be a creator,” said Ron Faris, VP/GM of Nike Virtual Studios.

“If we were to look outside Romanian borders, we’d see that this trend is an emerging one and that big brands have already adopted it, putting creativity in the middle of everything they do in Web3. Clients are given a chance to have a say in what products look like or how they are being displayed. This doesn’t apply to Romanians though, as we’ve only recently started to take a holistic approach to retail, and the metaverse universe is a “platform” that retailers have yet to tackle. This opportunity remains largely untested in Romania as we still need to make serious steps into the omnichannel retail approach, and brands and retailers are more focused on optimising for a consumer that may adopt physical, virtual or mixed reality modes of interactions,” says Alexandra Vestineanu, co-managing Partner at Jam Session Agency.

For his part, Silviu Marincean believes that Romanians excel at quickly adopting trends, and being offered creative control is no exception. Brands and agencies have been collaborating with consumers for years, creating limited edition products, promotional materials, and even entire advertising campaigns. VMLY&R recently partnered up with Durex for a sex education campaign that allows users to have control over their learning experiences. The campaign is featured on SafeToPlayHub, the biggest sex ed platform in Southeast Europe, where GenZ can learn on their own terms, using their preferred influencers for not just an informative experience, but a native entertaining one. Another client of theirs, Coca-Cola, also joined the co-creation trend by launching a capsule collection with Alina Ceusan for Coke Zero, making the brand part of the target audience’s lifestyle.

“Co-creation and virtual reality tools can be applied to all aspects of a brand’s experience, not just commerce. However, I think it’s unlikely to become the norm anytime soon, particularly in the retail segment. Romania still has a lot of catching up to do, especially when it comes to e-commerce. We still need to focus on the basics in order to provide shoppers with a seamless, effective experience that caters to their needs. Brands continue to require numerous clicks from us to purchase a single product, while we remain hesitant to make online payments. But to attract younger, digital-native shoppers, brands must leverage a combination of a catching-up strategy with an approach that delivers a co-creative experience. Because the beauty of these trends in commerce lies in their ability to drive relevance, not just sales,” Marincean explains.

How agencies work

So, what should agencies do to tackle this new context and what is their role in bringing innovation and power to the consumer? Even though it may feel like a huge paradigm shift, Andreea Copaciu believes that agencies in the metaverse will need to have the same function they’ve always had, acting as brand guardians and amplifiers. With more emphasis being placed on user generated content and on prosumer involvement, agencies will have to develop additional skills as content curators and community facilitators, while ensuring that brands remain true to their DNA in this democratised brand development process.

“Until we see entire ‘digitally franchised’ brand shops run by consumers in the metaverse, there are many small steps agencies can take to empower the voice of the consumer. An easy tool is getting them involved in creating genuine brand-related content on social media. Another one is to give them the power to vote on what limited-edition products to be run. Either way, the role of the agencies is the same: to bridge the real needs of real people with the sustainable growth of brands. It also means being more involved in understanding the consumer base, identifying the promoters, and engaging them with meaningful campaigns. Historically, only a small percent of the population is comfortable with creating content, expressing themselves publicly, but with the Z and Alpha generations, things have started to change,” WaveCrest Romania’s country manager, Andreea Copaciu explains.

Moreover, in the context of co-creation, this means not only being curious and understanding emerging tools & technologies, but also proactively assisting brand owners in evaluating and testing these new opportunities.

From this point of view, the agency she represents has consumer engagement ingrained into its ethos. “Our ‘northern star,’ ROE2 (Return on Brand Equity Squared), is based on the idea that exponential brand growth can be obtained by multiplying experience with engagement. Therefore, encouraging consumers in co-creating communication or co-managing virtual commerce spaces are the ultimate level of engagement a brand could aim for.

“In our agency, we have experimented with AR solutions for a couple of projects, but the Metaverse is a space we’re watching closely and with great enthusiasm. As part of our strategy to become Europe’s fastest growing brand experience agency, we are actively scanning for partners that could solidify our capabilities, and v-commerce is one domain we want to have under the WaveCrest umbrella,” Copaciu concludes.

At Jam Session, the vision is to create impact through creativity and bring value to clients’ businesses. They could not do so if they didn’t understand the depths of the business, the customer, and what technology and digitalization can bring to their lives.

“All our clients are pioneers—from business models to communication goals—, so we are always in this partnership agreement that allows experimenting based on technology trends, tools, and our own creativity, thus taking the brand and placing it into its clients’ playground, which is slowly going from offline to digital to phygital. Giving consumers power and a role within brand or product development puts businesses in a sweet spot that can only further translate into trust, love, and strong connection with clients. Work for a brand that’s willing to take it to the next level in an environment that will probably become commonplace in the near future and that gives a more active role to the customer is something all agencies should aim for,” says Alexandra Vestineanu.

Her colleague, Ioana Cadir, adds that agencies play a crucial role as their innate hunger for mixing true consumer insight with the new technologies and digital spaces is something that clients seek and expect from them. In the last few years, we’ve all been forced to change and adapt very quickly, while agencies were the ones keeping an eye on consumer mindset and needs, guiding brand and product conversations in a balanced manner.

“The era of one big idea that builds equity is gone, which is not to say that the era of creativity is gone; on the contrary, the creative opportunities brought by unified commerce are endless. Agencies should secure access to relevant data, either through partnerships or by using internal tools, and use it to reveal distinctive customer insights that will drive the development of engaging brand experiences. And the purchase opportunity should be as close to those as possible—the name of the game is shortening the buying journey,” the VMLY&R representative adds.

At VMLY&R and VMLY&R Commerce, they believe in the power of connected brands, which means delivering brand and customer experiences. They tackle the always-on consumer mindset to link ATL with BTL, offline and online, to maximise both the creative output and the commerce conversion potential. For this, they’ve developed a proprietary commerce approach that integrates creativity, technology, culture, and commerce to deliver easily implementable, consumer-centric, end-to-end solutions to maximise both emotional appeal and functional desirability. The objective for 2023-2024 is to help clients expand their commerce capabilities, especially in this post pandemic recessionary environment. Their approach will involve not only co-creation solutions, but also simple, practical strategies that can be easily implemented and have a significant impact.

“There is one thing that matters for marketers, retailers, and agencies alike: the consumer and their purchase journey. So, in this paradigm, the power already sits with the consumer, and our role is to help build the unified experience they expect. In their classic function, agencies should bring to the table deep commerce know-how and laser-sharp focus on creativity and conversion. But we can go beyond this and expand our role to become an organisational integrator that brings together different traditional departments, such as marketing and sales, or even different entities such as brands and retailers, with the single goal of deploying a truly end-to-end consumer experience,” Silviu Marincean argues.

The future of retail

In this context, one question stands out, as echoed by Wunderman Thompsons’ report: could the next era of retail see users co-creating brands’ virtual products and storefronts? For Silviu Marincean, the next era of retail is powered by shoppers’ expectation to buy across channels, wherever and whenever they feel like it. The way top marketers are reacting to this is by dismissing the traditional funnel and looking for strong creative solutions to put discoverability, engagement, and conversion together.

“Factor in the rise in virtual experiences like the metaverse, virtual and augmented reality, and the concept of co-creation becomes an attractive tool to get consumers entertained and invested in a brand. Add a frictionless conversion moment, and you have a winning recipe that can not only be applied to products, packaging, and storefronts; co-creation can be harnessed across multiple points of the journey, and go beyond the virtual world. Gen Z, the same engine behind the online revolution, is discovering the fun and the social connection that physical shopping brings,” says Marincean.

According to Ioana Cadir, beyond retail, art has been in touch with this new reality that brings the future into the present for many, many years, as The Ipotesi Metaverso exhibit from Rome clearly demonstrates. It is yet another example of how the past, present, and future can coexist through digital technology.