
Our sister/umbrella site Joystiq (much love, y'all) has posted a
story referencing a recent Economist
article. It summarizes something Philip has said about RL commerce coming into SL: "Another economic difference, says Mr Rosedale, is the lack of economies of scale in Second Life. In real life, a shoemaker, say, can reduce the average cost of making a pair by producing huge amounts, and the average cost of marketing by buying advertising in bulk. In Second Life, however, scale means nothing. There is no manufacturing cost to minimise. Gimmicks, such as giving away free shoes, are useless because nobody actually needs shoes at all."
Joystiq, however, argues differently: "
Second Life's denizens are concerned that the entrance of big business into the world will drive them out. They're right to be concerned. Their businesses are as at risk as the local bookseller's business before Barnes & Noble comes to town."
I'd like to point out something that neither source has. In Philip's case, giving away free shoes does work if you give them to a newbie, who 1) May be unable to afford the cost of even cheap shoes, and who then 2) Proudly displays them to all her newbie friends, who now clamor for them, and possibly even save up for them, or find ways to make money to buy them. People may not
need shoes in SL, but they
want them.
In Joystiq's case, there are a number of reasons for residents not to fear Big Business. First, many residents, particularly
Immersionists, don't want their carefully crafted spaces to be tainted by commercialism from RL. Second, because of instantaneous travel between sims, it's as easy to get to, say, Preen, as it is to go to American Apparel. Third, all creators go through the same process to create their wares, whether it's done by a team or by a single user. It's entirely possible that a preexisting SL store could create or emulate a style of clothing designed by a RL store. Therefore there is no material difference between a white t-shirt made by The Gap and one made by Mistress Midnight. What matters then is which one costs less; that is the one the average user will buy.
SL is just
different, and RL businesses hoping to make a profit from its residents need to take the time to consider how it's different, and how to turn that to their advantage. The old ways will fall by the wayside. Simply building a store and hoping your brand will bring everyone running just won't work anymore.