Shopping in Virtual Worlds: Perceptions, Motivations, and Behavior

ABSTRACT Avatars are spending millions of dollars yearly on shopping for virtual items in free-form Virtual Worlds (VWs), such as Second Life. Some studies explaining Virtual World users' motivations to spend real money on virtual items from a consumer point of view are only available for game-oriented VWs and not for the free-form type. By means of conducting in-depth interviews with Second Life shoppers, the current paper: (1) explores the added value perceived from shopping in free-form VWs, (2) discusses free-form VW shopping motivations in relation to those in game-oriented VWs as well as to traditional and online shopping motivations, (3) reveals users' motivations to 'reside' in VWs, and finally (4) classifies and profiles VW shoppers into distinct VW shopper types considering their shopping behavior and store preferences. Keywords: shopping motivations, Virtual Worlds, virtual items, shopper typology, Second Life. 1. Introduction Virtual Worlds (abbreviated as VWs) are 3D Internet-based simulated environments that can be categorized into game-oriented and free-form worlds (Bainbridge, 2007). While the users in game-oriented Virtual Worlds have a goal to achieve (e.g., World of Warcraft), free-form Virtual Worlds are environments that mimic the real world with no specific goal imposed by the Virtual World, such as Second Life, There and Meet Me (Hassouneh and Brengman, 2011). As of Q3 2009, the total number of registered VW users is believed to be around 671 million worldwide and they are spending around $1.8 billion on virtual assets (KZero, 2009; Guo and Barnes, 2007). In Second Life (abbreviated as SL) alone, $150 million worth of virtual items were traded between residents in the third quarter of 2009, up 54% from the same period a year earlier (Linden, 2009). Reperes (2007), a marketing research company, surveyed 419 residents of the VW SL about their purchase habits. They found that shopping constitutes a popular activity with 72% of VW residents surveyed stating to go shopping in the VW at least weekly and over half of them making a purchase on a weekly basis. Some studies from a consumer point of view explaining VW users' motivations to spend real money on virtual items are available only for game-oriented VWs (Lehdonvirta, 2005; Guo and Barnes, 2009) and not for the free-form type, such as SL. The current study aims to fill this gap by exploring avatars' shopping motivations in addition to perceptions and shopping behavior, in free-form Virtual Worlds. Many entrepreneurs have been attracted to free-form VWs (here after referred to as VWs) and are setting up stores that sell virtual products (e.g., virtual shoes, furniture, food ) and services (e.g., event management) to VW residents to make a profit. For some of them, VWs are the only source of income (Au, 2009a), with several business owners earning more than a million US dollars a year in SL (Au, 2009b). Real world businesses, alike, are setting-up stores in the Virtual Worlds, such as Nike and the book retailer Snowbooks in SL. By offering their real and/or virtual products for sale, they aim to build their brands, and/or to grow their revenues (Arakji and Lang, 2008). While some were able to create a successful presence in-world (i.e., in the Virtual World), many failed to attract customers to their stores. Reeboks' virtual store in Second Life, which allows users to create custom versions of Reebok shoes for their avatars and for themselves, successfully distributed more than 27,000 pairs of digital shoes in its' first 10 weeks (Tedeschi, 2007). Other businesses, however, were not as successful and had to re-launch, such as Circuit City (Nino, 2008), or end their presence, such as American Apparel in SL (DMD et al., 2007). Such failures suggest that the new channel has its own rules and unique customer needs that should be well understood before engaging in any business or marketing related activity in-world. While possessing their own unique characteristics, Virtual World stores were found to share a lot of elements with traditional and online retail stores (Brengman and Hassouneh, 2009). …