IMCA Research Seminar - Davide Orazi, Monash University: Phygital Products: Mitigating Negative Valuations in Metaverse-first Retailing Strategies

Phygital Products: Mitigating Negative Valuations in Metaverse-first Retailing Strategies

Abstract

The metaverse offers unique opportunities to retail Phygital Products (PPs)—combined physical-metaverse offerings whose components are linked together using NFTs. Despite their rising popularity, PPs pose a number of distribution challenges likely to influence consumer valuations. In this research, we investigate how retailing strategies (metaverse-first vs. physical-first) influence consumer monetary valuations of PPs. Over five experimental studies, including one conducted in a metaverse retail environment, we show that metaverse-first retailing strategies decrease willingness to pay (Studies 1A-1B) due to decreased perceptions of investment value (Study 2). We then turn our attention to two retail strategies likely to mitigate this valuation bias, namely manipulating product scarcity through limited releases (Study 3) and manipulating arousal by varying music tempo (Study 4). Our findings inform actionable strategies on how to retail PPs in the metaverse to reap channel and operational efficiencies without trading-off on revenues.

Bio

Davide Orazi is Senior Lecturer in the Department of Marketing at Monash Business School (Melbourne, Australia). His primary research area combines experimental and linguistic analysis methods to study marketing communication effectiveness. In his secondary research area, he uses qualitative methods to study the cultural processes whereby consumers escape from everyday life into a variety of consumption domains including gaming, live-action role-playing, and the metaverse. On these topics, he has published in Administrative Science Quarterly, Journal of Consumer Research, Journal of the Academy of Marketing Science, International Journal of Research in Marketing, and Journal of Business Ethics, among others.