Second Life ecommerce leaps to the 21st century. Is it the end of inworld retail as we know it?

From around 2001 when internet shopping was first moving into the mainstream until around 2006, there was a steady drip of press articles talking down internet shopping.  From the (real) fear of fraud to the belief that people always had a desire to see the item before buying, the mainstream media kept shaking their heads as web shopping became more and more popular.   The impact of the emergence of internet shopping is still being felt as some traditional bricks and mortar traders find that their business has effectively moved to the internet and their high street stores have become an overhead that makes them uncompetitive enough to put them out of business.

What has this got to do with virtual worlds and virtual goods shopping?  Rather a lot.

The open endedness of Second Life has meant that people have built what they know.  This is particularly true for retail.  Those who have flourished in Second Life have done so because they’ve taken the basic retail behaviours and adapted to the limitations of the platform.  The key driver (excluding word of mouth) of Second Life retail activity has always been inworld search and when that, combined with the ever present lag, proved to be a poor tool for retail, consumers moved to the blogs and the shopping sites for information.  12 months ago a survey of Xstreet users by Linden Lab showed 75% of people used Xstreet to find items before going inworld to view and or purchase.  A staggering indictment of how unsuitable the inworld search tools were for the preferred shopping behaviours of their customers.

Three months ago Second Life was a mirror of the retail world circa 2001, if you wanted to find something you’d either slog around the grid using search (think of driving around town with the yellow pages) or would use the internet to find a shop then go there to see the range.  

2010 was the year of content creators according to Linden Lab in February.  After they’d released the new viewer, their next step was to concentrate on retail.  It was due to deliver in Q3 2010 and it did.   

With the release of the new shopping portal and the constant issues around inworld search since March, we’ve jumped forward in time to 2010.  Without any current figures, my guess is that the proportion of marketplace browsers to marketplace purchasers has decreased.  From a shoppers perspective this is good and is long overdue and it brings consumer shopping behaviour for virtual goods closer to their real life experiences with sourcing and purchasing.  It’s taken close to two years but the market that Onrez served so well and were  has finally been catered for again and the results are impressive.  

Indications are that the shakeout is about to begin.  With the changes to inworld search and the marketplace, the desire of Linden Lab to force inworld consolidation is mirroring their objective with estate landlords and is finally moving to fruition.  In retail’s case, those with large land holdings will still have their inworld presence and smaller, specialty retailers will move to the web.  The problem for Linden Lab may well be that yet again their view of what is best for Linden Lab doesn’t coincide with what is best for their bottom line. 

We shall see.

I’ll digress for a moment and say that the Second Life Marketplace deployment is the wort software deployment I’ve ever seen in all the years I’ve been involved with IT.  The original design and ideas were spot on as we’re seeing now but the execution, particularly since the termination of Melinda Byerly’s employment, has been astoundingly poor even by Linden Lab’s  low standards.