The Anaheim, Calif.-based retailer, with a physical store count of 300, will launch a virtual mall in the metaverse and more NFTs on Thursday as part of a strategy focused on keeping up with its target Gen Z consumer.
“Pacsun’s consumer ranges from 17 to 24. That’s really the sweet spot, so we’re speaking to Gen Z. They are leading us into the metaverse,” president Brieane Olson said this week during a keynote address at the Shoptalk conference in Las Vegas.
Olson said the company had been discussing and planning to enter the metaverse for several years as part of a longer-term plan built around the virtual world.
“Authenticity is something that we often question, whether it’s product collaborations, brand collaborations, which creator makes sense in the Pacsun partnership, and I think as we began to think about entering the metaverse, the first important piece was to be one of the first retailers that really pioneered accepting cryptocurrency,” Olson said of the multi-step approach to building a virtual presence. “That was step one for us. Step two was really trying to take a step back and look at how the consumer’s already integrated into the metaverse, and that was through the lens of gaming.”
Pacsun said last year it was partnering with metaverse platform company Roblox Corp. for its metaverse world, tapping Melon for the design. Its foray into the metaverse began with a Pacsun-branded T-shirt and tie dye sweatpants for players. Earlier this year it launched a Pacsun video game, and the momentum appears to show no signs of slowing with the Pacworld fantasy mall concept and virtual boutique planned for ComplexLand in May. Moving forward, Olson said the retailer is looking at the acquisition of land in the metaverse.
The privately held retailer doesn’t typically disclose its financials, but said last year it had 2020 sales of more than $700 million. Digital made up about half that revenue.
Olson was promoted to president from chief brand officer last year as part of a number of leadership changes that included the appointment of Alfred Chang, former Pacsun president, to co-CEO of the mall-heavy retailer. He shares the top spot with Michael Relich, who previously served as interim CEO of PSEB Group, which owns Pacsun and Eddie Bauer.
The push virtually, which has also been complemented by the company’s growth on TikTok, comes amid successes in the physical world that have resonated with shoppers, including wins in its merchandise assortment through Fear of God Essentials drops, collaborations between Vans and Pacsun guest artistic director A$AP Rocky and its own in-house labels.
The retailer’s merchandise plan in the metaverse continues to be refined.
“We have an evergreen strategy in terms of the logo merch, which helps to build brand affinity,” Olson said. “We also launch seasonal items that are available in store in the physical world.”
Then there’s what Olson called “fantasy” items sold in the metaverse that she said have included some high performers, such as gold wings.
With the release of virtual clothing, the company has also seen what Olson called “emulation of product,” which she said is something the company views positively as a signal of the brand’s equity and positioning in the market.
“Arguably, some of the product that we see in terms of product emulation is stronger than what we put out in the first place, so I think the idea of crowdsourcing, both virtual product and physical product, that’s the way of the future,” Olson said.
The executive said departments across the company are being made aware of the metaverse as opposed to having a metaverse strategy that’s centralized with only one or a handful of employees. The company’s also held a number of focus groups with kids, starting from age 6, that have helped inform its virtual approach.
Pacsun staff have cross-department meetings in the metaverse at least monthly. The retailer’s also looking to boost its workforce with more digital designers.
On the NFT side, Pacsun in January released the first of its Mall Rats series, which bear cartoon rats wearing the retailer’s clothing. Each Mall Rat reflects a Pacsun store with the background of the NFT a reference to that store’s location, such as the cityscape for downtown L.A. and palm trees for Santa Monica. The NFTs, which will total 300 once they’re all released, are one of one and come with a physical shirt that’s also one-of-a-kind.
The executive said the scarcity model was important in deciding to release only one of each design in the series.
Olson said NFTs could hold revenue generation potential for the retailer in the future, but stressed they are also key in building community and brand.
“Right now, we’re really focused on authenticity, the importance of [the] approach and making sure that it resonates with our consumer and that everything we’re putting out there has purpose,” she said.