Dusseldorf For Thomas Johann Lorenz, a stroll along the Berlin boulevards Kurfürstendamm and Tauentzienstraße is a description of the state of German trade. He walks past the insolvent Galeria, past the insolvent P&C, past the already closed shoe store Leiser – and goes shopping at KaDeWe because he finds a well-made shopping experience there. “This means that brick-and-mortar retail still works,” he says.
Start-up founder Lorenz also wants to establish this experience in e-commerce with his technology provider Journee. Journee develops photorealistic 3D worlds in which customers can use their smartphone or computer to take individual tours of discovery through the range of brand manufacturers. Customers can move freely in the virtual shopping world – like in a department store today – and discover new products for themselves. A metaverse for consumption.
Journee has already built such worlds for the websites of numerous companies, from Siemens to BMW to H&M. But now the start-up is going one step further. Journee is now opening its own small metaverse for the American cosmetics manufacturer Clinique, which offers more than a presentation of the range.
“Clinique is our first partner who also integrates the web shop into the virtual environment, where customers can buy directly in the world of experience,” explains Lorenz, who founded Journee three years ago together with the digital artist Christian Mio Loclair in Berlin. “It’s a new way of presenting our brand,” said Emmanuel Rousson, Clinique’s vice president of e-commerce. He speaks of an adventure and wants to offer every customer a very personal, interactive approach.
Model for this new shopping world are 3D computer games, which inspire young people in particular and in which high sales with virtual objects have been made for some time. This principle is now to be transferred to online trading.
Metaverse offers trillion dollar revenue potential
The potential seems huge. The Metaverse could generate $1 trillion in annual revenue by the end of 2025, according to a study by Accenture released in January at the CES trade show in Las Vegas. Retailers want to take advantage of that too. According to a survey, 60 percent of German trading companies can imagine offering a virtual sales world in the future.
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“It is important for all brand manufacturers to experiment with these applications,” advises Valentia Contini, Metaverse expert at digital consultancy Diconium. But she also knows that for most companies there is still a long way to go. “There are not yet many examples of companies offering such virtual worlds to their customers,” says Contini.
And even in these cases, the customer had to leave the Metaverse application to get to the web shop. A purchase must be seamlessly possible in the future. That’s why she considers the direct integration, as with Clinique, to be the “next important step”.
What sounds simple is technically a major challenge. For an appealing shopping experience, huge amounts of data have to be managed and three-dimensional, moving images created for the customers. “The experience is different for every consumer and has to be created live at the moment,” says Journee founder Lorenz, describing the central challenge. “We built a patent-pending infrastructure that makes this possible in the first place,” he explains.
Journee initially managed this feat without external investors. With this form of financing, also known as “bootstrapping”, founders build their company using only their own funds. As a rule, a start-up develops more slowly than if it can use external capital.
Siemens, Adidas and BMW use the Journe platform
Journee, on the other hand, was able to set up a functioning platform in 2020, the year it was founded, and win Siemens as one of the first major customers. Founder Lorenz sees the advantage of their solution in the fact that it can be reached via the website of the respective brand partner. Consumers do not have to access special platforms such as Roblox or Decentraland, which lowers the hurdles for use.
The following year, brand manufacturers such as Adidas, BMW and H&M were added, and the band Coldplay held a concert via the platform. The company made millions in sales in the second year and has been profitable ever since.
Journee now employs 85 people at locations in Berlin, New York, Dubai, Cape Town and Stockholm. The company first brought in angel investors last year and has since closed an undisclosed Series A round of funding. According to their own statements, sales are in the double-digit million range and have recently doubled every year.
“We can prove that we create a leverage effect for the providers,” says founder Lorenz. On average, customers spend 13.5 minutes in the company’s virtual worlds. This can also be seen in the customers’ business. “As a result, we’re seeing a 140 percent increase in sales,” he says.
“Especially at a time when online trading is slightly stagnating, this new technology can bring new dynamics again,” he hopes. “That’s why we’re sensing a very high level of interest from consumer goods manufacturers in this technology. We’ve never had so many inquiries,” he reports.
Expert warns against exaggerated commercial expectations
In view of the complex technology, brand manufacturers have no chance of setting up such virtual showrooms or even web shops on their own. “It takes special skills to create the three-dimensional world,” explains Martin Cserba, Diconium’s trading expert.
There are various service providers who offer construction kits and entire communities of creators who can create the design for such worlds. The Journee platform is technically leading and one of the most used in Germany.
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However, Cserba warns against short-term, exaggerated commercial expectations of the new technology. The costs for the brand manufacturers are initially significantly higher than a conventional web shop. “It doesn’t pay off immediately through sales,” he says.
However, pioneers would have the opportunity to stand out from the crowd of providers with such projects. And as the technology becomes more commercially available, costs would also come down.
Journee founder Lorenz is also convinced that the classic web shop for quick shopping will continue to exist at the same time. However, more and more brand manufacturers would supplement this with worlds of experience. “It is precisely in this combination,” he predicts, “that we see great potential.”
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