From Grid Boutique to Chain Store Mogul – expanding your retail operations in Secondlife.

In a virtual world where inventory is unlimited after creation, it’s all about volume. Even low profit can become substantial profit when you multiply it by ten profitable locations.

Once you have a profitable main location it is time to consider the pursuit of low-cost, low-prim satellite shops to help move your top-selling products, acquire new customers, increase brand awareness, and subsequently increase sales.

 

Finding the Right Space

Rental spaces on the grid are very similar to your average shopping mall but there are some very notable differences.  To begin with, most retail space in Second Life is a secondary attraction (and subsidizer) of a social attraction.  Unlike the shopping mall, the bulk of foot traffic arrives with an intention other than shopping.

While this may appear to set retailers at a disadvantage from the start, there are some important considerations to keep in mind:

Foot Traffic and You – cashing in on conversions.

Foot traffic, or SIM Traffic as we call it on the grid, is simply the number of bodies that walk through the door each day.  As a savvy retailer, your job is to convert as many of those bodies into paying customers.

To improve your conversion rate you must first understand how to calculate it.  The formula is total transactions for a given time period divided by the total visitors during that same time period.  If your store had ten visitors and you had one transaction your conversion rate would be 10% (transactions/visitors).

Conversion rates will vary greatly from your main store and remote locations.  Shoppers visiting your main store have made a conscious decision to visit your establishment with the intent to shop.  Small retail spaces at entertainment and social venues primarily attract impulse shoppers.  Space layouts, product offerings and designs should address those primary audiences accordingly.

Once you have calculated conversion rates for your locations you can then begin to work on strategies to improve them.  Sure you could haphazardly make visual changes and hope for the best, but knowing what is and isn’t working is the key to ongoing success.

Giving Away the Farm – the value of free.

The Internet at large has drastically changed the consumer’s perception of free. Nearly all Internet business models, including Second Life’s, begin with offering access to free content or entertainment and rely on the hope that one day they will convert their audience into paying customers, or find customers that will pay to communicate with their audience.

As a result, the Internet has not only raised the bar on the quality of free, it continues to fuel the consumers sense of entitlement to free goods and services, weakening brand loyalty and creating a commodity shopping mentality.
All that said, why would you consider marketing strategies that are based on giving away the farm? Simple, because it still works – provided your expectations of the promotion are based in reality and your goals are long-term.
Freebies, like loss-leader sales are designed to entice add-on-sales, build brand awareness and acquire new customers by introducing them to your products.

To get the maximum value out of give-away programs, the savvy SL marketer should: