Latest trends in SL economy (shopping)

:word:
i remember so many know-it-alls saying that this trend was an expected summer slump, and i knew better.

'told you so'

A few additional possibilities...

1. There is so much crap that people new in the last year (the majority) have come to think virtual items shouldn't cost anything. Thank the BIBs and the everyone's-gotta-run-a-mall mentality.

2. Since it's free, a lot of people have joined only to use it as a chat program. You don't have to own anything to do that.

3. When I joined it was clear the object of this game was to not look like a newbie. With so many newbies I suspect that's not true anymore.

4. The newbie hangouts have become so hostile that the olbies don't go there anymore. No mentoring, no encouragement, no peer pressure for the newbies.

5. Bots don't buy anything. People don't camp for spending money anymore. Bots camp and take the money out of the game.

In short, more people but not more spending.

When I first came to SL in Sept. 06 I made good money working the clubs. Worked my way up to the bigger (higher traffic) clubs and after 2 1/2 months invested the $L10K I’d saved plus about another $L10K in my own club. At my clubs peak, in Feb/Mar “07” I had 25 girls working there as either dancers, escorts or managers with 13 “vendors” renting space upstairs, and averaged 6000 to 8000 traffic, but as clubs proliferated it became harder to get traffic, and quality employees, (I refused to offer camping from day one since I viewed this as pretty much non-productive traffic) thus business declined… we started to loose our regulars to attrition or other clubs. The gambling ban was the final “blow” and I just recently sold that last of the 5632sq I had the club on. Back in the “peak” period I thought nothing of spending $L2000 or more on a shape or skin or up to $L1000 on an outfit or new hair. Over the past several months though, what with the lack of income coupled with the fact that I’ve bought at least one of almost everything and dozens of some items I’ve pretty much quit spending money. Personally I don’t see myself spending much if any money in SL again. I’m even considering dropping priemium and becoming a “free” account. In addition to dancing, escorting, owning a club (built my own and doing so learned who to build after multiple re-builds) I also sold my own shapes and did a tiny bit of building for others. I don’t see myself doing any of this again due to the poor SL economy. I just think the “boom” is over and won’t repeat itself any time soon. IMHO Linden policies have seen to that and will continue to troutle SL’s economy down.

I sell buildings and they used to sell for between L$100 and L$250 depending on type. I never sold great numbers, but made a sale or two most weeks. Now nothing sells, although my prices are lower. Even my barrell of freebie stuff gets no takers.

But then I hardly ever buy anything - my skin, plus a few dance animations, two scripted dining chairs and a rentbot are about all I can think of - Everything else I either made or picked up as freebies. I guess more and more people are doing like me. I am a trendsetter, and a victim of my own trend that I set LOL!

Our Mall and shops had seen steady growth since we moved to Stella Ise in April. I plot daily visitor numbers, we have no campers so they are genuine figures, and the introduction of the new Search coincides with a steady then fast decline in numbers. We have stablised now but are at a significantly lower level. Our tenants and our main mall only sell quality creations, in fact many of our tenants are top names in SL.
This is not an isolated occurence. In talking with many other business people they have also had the same experience.
So, IMHO it is the half-baked, bug-ridden search engine we are now using.
A search enginge that encourages people to use 'Search All, and only returns 5 pages (JIRA Reported).
A search engine that uses parameters for listing preference that appears to be random regardless of monies paid.
I'll stop there as I just get so wound up by the apparent economic ineptitude of our masters. Just as SL appears to becoming a viable and worthy enviroment we get hit by some curve ball. Land price crashes, Gambling ban, VAT, worsening stability of the platform. All these combine to damage the economic underpining of SL which, according to LL own blurb, is a resource offering tools and support for 3D content creation in 4 areas including business.

Newbie here, with fresh eyes

1 With so much space to explore there is no way I'd have the time or inclination to learn how to build my own things, to that's probably not why people are buying less ( or not a major reason ). I just don't have the time.

2 There is a ton of free stuff lying around. If you're willing to handle the lag in busy areas and do a lot of searching, you can find very nice stuff, including skins.

3 As opposed to previous years, there is no free money being handed out. Older residents were able to buy things with their stipends, newbies cannot and have to spend real dollars. Prices seem very high from that perspective.

4 A HUGE proportion of clothing for sale is downright slutty. I don't mind a few pretty pieces (and, believe me, neither does my boyfriend), but why can't you buy a sweater that doesn't have you freezing off your bits?? I'd love a nice turtle neck but I'm going nuts combing through the leather bustiers.

5 Declining growth of Second Life? How about the over-the-top adult content, even in PG areas? Again, I don't mind it, but I'm sure many do. Can't take two steps without being asked to buy a nipple ring or being propositioned by someone?

6. Steep learning curve. Enough said. Anyone who's ever ended up wearing a box on their head knows what I'm talking about. Offputting to the newbies.

Just my two cents

in clothes and things like animations that i use all the time,if the quality is there i don't mind spending for it..If i see alot of the same thing with little difference then yes i'm gonna go for the best deal..
The thing with sl is it doesn't take much to get started in a buisness so people can undercut prices pretty easily..Well i should say SOME buisnesses..If the volume is there and they take off well they may rise in price..
There is no real nest egg threat starting out in sl if you start small to get a reaction like there would be in RL so you can take bigger risks and not fold from finances..

you have to really shop for the talent more than the price nowdays..some are way more than they are worth and have gotten greedy and some in my opinion could be charging alot more but are happy with the volume..

the only reason i look in the designers that are unknown is to find someone that may be the next designer that everyone will be shopping at,,and if i leave a designer it would not be because of price but a trend of seeing things looking close to things they have made in the past..
If i get a hint of them overlaying and putting things already made together i'll move on..originality is a major key..
just my 2 lindens.hope it may help in some way on the insight of some of the shoppers

Amen to that. The proportion of belly shirts to regular ones is very high, I guess some of that may be due to the limitations of the shirt layer. I prefer "Normal" clothes too, with the special exceptions, I don't like living in skimpy tops and micro mini's all the time. There are some great places for regular clothes, hit me up in world and I can send you some LM's of my favorites. As far as the Learning Curve goes, I think it's somewhat exaggerated. Sure there are many facets of SL that one can learn, but the basics of moving around, wearing clothes and opening boxes, etc, really aren't that difficult. I little trial and error and a bit of reading here or in the knowledge base was all I needed to get started. People seem to be so terrified of making mistakes. So you have a box on your head? Big deal. It has happened to all of us.

The reason why, I think, starting communities is so hard and uncommon is that often, the person who actually starts a community will be the one who has to put in the most investment - but they are also often the person who will get to do the least actual living in that community. It'll require a substantial investment to buy the land to begin with. Then it'll require a lot of publicity to attract enough people there to support it - no-one will want to join a community with no other people, so it's easy to get stuck in a chicken-and-egg situation. Then you'll have to deal with disputes and with raising money, and so on...

And when it comes to actually living in the community, if you declare yourself "queen" or "king" or any special role for yourself then many people will be put off joining, so you have to be the same as everyone else.. except that you have a lot less time for living than the other people, because they don't have to deal with the business and dispute angles.

So there's a lot of factors discouraging people from starting communities around things they themselves enjoy, because paradoxically doing so will likely prevent them from doing it. The only workable reason to do it is, unfortunately, to make money



The gambling ban made a huge change. Studies have shown that micropayments economies work better, the harder it is to work out the correspondance of micromoney to real money. That's why the L$ exchange rate is pegged at L$266 rather than L$250 - and similar equivalents work the same, such as the Xbox system where US$1 is MSP80.

In-world gambling threw in a whole new twist to that. You could buy your L$300 with real money, but then by gambling it could turn into L$3000. Also, gambling provided something that's vitally important in virtual worlds: _growth_. It's been shown time and time again with online games that if you can have growth, you can have people do pretty much anything else, and they'll continue participating just for that. Yes, SL is not a game but that does not mean it can't learn from them. Previously, as you got better at gambling games, as you find new places to play, you could earn more and more money. Removing gambling robbed people of that. If you buy L$300, you will have L$300. That's all. If you want something else tomorrow that costs L$300, you will have to buy again. There's no growth, no incentive.

Furthermore.. as someone here has mentioned, there's a lot more just plain rejection of the virtual world idea now. As I mentioned on another thread it seems that people have started to come around to an important truth, that you can't play a virtual world and get to have a special social role. You can't be the queen or king or Harry Potter or Darth Vader or anything similar, because everything must either be a fair contest (ie, you might lose), or be equal between people - or else the other people won't turn up. This was written by a friend of mine who is no longer an SL player, but it sums things up neatly:





Which is probably due to the gambling ban, again. A lot of "game host" style jobs disappeared at that time, along with a lot of the revenue basis for clubs.

Thank you for the comment.

And I appreciate everyone replying to this thread. I feel somewhat surrounded by older SL players here, a good thing in my eyes, since I started after the big "boom", most of you have seen the economy raise and drop. A factor in business owning that I didn't understand when I first helped to start the business, I'm hoping this topic not only helps our business but other new business owners looking for answers.

I guess I should bite my own lip, I often do not shop myself unless I see something that I "must have", which isn't often.

My whole goal is to provide quality products at very cheap prices, but also I try to provide low prims too, so there is a compromise. However, I'm generally pleased with my products as there is a lot of stuff out here that's expensive and crap and massively over primed.

So to answer your question low prices don't indicate crap, on the whole high prices indicate overpriced crap

A lot of times, so true. I've come across so many great things at ridiculously low prices, and have spent small fortunes on stuff that wound up in my trash bin. Just like in RL, a big name and high price does not always mean high quality.

As competition increases, our prices must fall, especially if what we/you/I sell are seen as parity products (SL jeans are SL jeans are SL jeans) or commodities like gas in RL. As prices for items go lower, to make up for it, we need more buyers. A chair I could sell for $100L last March, I can only sell for $25 today. So to keep the same profit, I need four times as many buyers. For that I need to reach out to more people to become aware of my item and its great low price.

For sellers of anything in SL-- whether it's clothing, real estate, concerts or scripted gadgets -- they need to have an efficient and effective form of advertising to reach many people at once and differentiate their fab products from all the other products in SL. We don't gots it.

Search engines are only good if people are looking for your brand new "spirorammadingdongthing". If it's brand new, how do they know to seek it out?

SL's search engine has only gotten worse since I joined over a year and a half ago. Much worse. It's confusing, time consuming, plain wrong at times, and ineffective for buyer or seller. Event listings aren't used by many people. The classifieds system is a mess, too. Ad Farms/rotating signs/ billboards are griefing tools and scams.

Even outside companies like SL Exchange do not make the shopper's experience an easy one. Let alone enjoyable.

The American consumer goods boom in the 50s to the present was fueled by mass media advertising: mostly magazine and broadcast television. An advertiser could efficiently reach a huge audience and make money doing it. We don't have those vehicles to reach the 50,000 concurrent users, unless we spam every single person/group. The backlash on event spamming and solicitations to join groups solely for commercial endeavors already is getting significant.

I think there are some SL magazines, but don't know if they are successful. The magazines have to advertise their existence to get readers and where/how do they do that?

The most effective advertising of all is word of mouth advertising, and it takes time to build. Companies like Caledon and Xcite thrive because of that. And as long as their products and service continue to excel, they will succeed. For upstart competitors, the best way to challenge the WOMA winners is to spend a lot in a mass marketing way.

There are great opportunities for viral marketing that don't cost much, but do require much creativity. That's where us small companies really need to focus our efforts, since mass advertising will not be coming to SL very soon.

I predicted when I first came here that the plethora of free stuff would be the downfall of the SL Economy. There are now whole sims dedicated to giving away free stuff.

Free stuff means you don't have to put any money into the game. You can get almost everything you need for free.

Free stuff makes it harder for newbies to start a business and make any money.

Since so much is available free and businesses are hard to start up there is low motivation for newbies to become content creators and contribute in some way to SL.

Those who do become content creators for the joy of it, can still be disappointed and disillusioned with poor sales, thinking it reflects badly on their skills.

People who can't make money in SL are also less likely to spend it.

Free stuff is bad for the economy.

Insightful.

At the end of the day, the idea of being 'king' in any capacity on the internet is incredibly pathetic. Or at least, if the idea isn't scary, it's time for an active healthy hobby like rock climbing or racketball or something.

Money is a huge factor. Not for tier, you can generally raise enough for that. It's the hours - unless your time is completely, utterly your own, nobody around you is going to easily tolerate your eyes glazed over and your mind in a distant country for dozens of hours each week. The effort has to generate something to justify the time.

And it's true, there's no way to really enjoy the community if you are taking care of everyone like a waiter on roller skates.

Except in one way: if you like making people happy, you'll generally be able to accomplish that.

I was at a small group-oriented party for my RL job, and one of the IT guys started talking about virtual worlds, and all he had to say was extremely negative. Especially re: "these people, they go into virtual world, play all these violent games, and then meet eachother in real life and do the same violent stuff in the real world." I was like, "huh??" He mentioned some case or another where a couple met in a virtual world, got together in RL, then mutilated and drowned her RL baby. Ugh.

This guy also didn't get buying "virtual stuff." He said "what's the point of buying a bunch of 1's and 0's?" I pointed out that it's for entertainment, and he said that was just dumb, and then I said "well you pay money to see a ball game, or a movie. That's not tangible. It's just entertainment."

Needless to say, I did not come out of my SecondLife closet during that party. Maybe I'm just chicken, but to a lot of people, virtual worlds are still a really stupid idea.

Well.. it isn't so much the idea of being a king or queen, as being 'the special one' in a setting. I mean, if you take a look at a game like Grand Theft Auto, the player is essentially the 'special one' who can kill and rob the city as they wish - obviously it's easy to tell that wouldn't be playable in a social way. But similar social things, that computer games can't simulate at the moment - like being the most beautiful girl in the city, or being a master con-artist who can trick everyone (but in a non-harmful way - I don't mean cheating people out of real money here!).. or even being a celebrity, like a singer or dancer or magician - it looks tempting to do those in virtual worlds, because it seems that real people could respond properly to them, and it's easy to have the perception that there are people doing that kind of thing in real life (I suspect in fact there probably aren't, though). But you can't do those in virtual worlds because, well, it _is_ just like being a king or queen, and everyone wants to be special. Ok, there *are* singers and dancers and magicians in SL but they are either tied to RL (eg, live music events) or part of the SL sex industry (which is the 100% universal "fix" for enabling role-plays )

my 5 pt plan off the top of my head (there are hundred's of things that should be done but I think what I have for 1, 4, & 5 are the biggest)

1. Find a way for newbies to be able to earn some $L's while at the same time participating in a group, community, project or whatever... something that gets them involved w/ others. If someone gets invovled and makes friends, they're more apt to stay involved for the long term. And the more $L's someone makes, the more there gonna spend.
1b. Content creators (and land barons) should do more to get people involved. Right now the proportion of people who sell things to the number of people who buy things is out of wack.

2. Get rid of the Freebie megastores, islands, etc. I think the Lindens should have their own free island w/ limited content but that's it. Freebies do nothing for the economy.

3. Bring back casinos & gambling, but only to those who hold a valid gaming liscence in the U.S. or their equivalent outside the U.S.

4. Taxes, if the Linden's were smart, they could impose a $L1 sales tax on all transactions. This would give them more income to invest in their infrastructure, hire new talent, ect.... and would also give them some cash flow to.....

.... 5. Create a central bank and introduce banking regulations. Legitimate & trustworthy banks in SL, along w/ a valid stock exchange(s) would be a tremendous boost to the entire Sl economy.

That's exactly the problem though - fundamentally, it's necessary for people to be buying L$ with US$ in order for the economy to work. Gambling essentially distributed the L$ that were bought. So the design of SL has to walk a very, very fine tightrope. If you give people too little to do, they leave, because they're bored and see no potential. If you give people all they want, they have no reason to spend US$, so they don't.



That's not quite true - there are lots of potential customers entering the world, the problem is that they just don't stay very long compared to content creators.



You mentioned though that newbies needed a way to earn L$. Free money has the same effect as free items - you can see the problem I'm sure.



There is no such thing as a valid license for internet gambling in the US.



The Lindens already make money by taxing LindeX transitions in US$ - remember, L$ are worthless to LL.

I never said that free money should be given away... jobs need to be created. Or instead of just mindless camping, some sort of involvement and interaction should be required.

Didn't know that about internet gambling in the U.S. (writing my congressman now).

And my item #4 is tied in a major way to my #5. Taxes would provide funding for a Central Bank. A central bank (with regulations in place) would be able to provide backing and some legitimacy to other banks in SL. Money is created by banks lending out money.

The Lindens already make money by taxing LindeX transitions in US$ - remember, L$ are worthless to LL.


Oh, and if L$ had no value to LL, then why do they sell them for US$? Just because LL tries to state that the L$ has no real value, doesn't make it so.

I gotta agree LL still hasnt gotten the game stable even after blowing all that smoke up a dark place.
Maybe things will change for the better with Cory gone... but i will bet it will be worse and not better.
I really hope I am wrong... but dont think so

You're kidding, right? I've patronized plenty of content creators who have offered freebies, because I wouldn't have known who they were or what their stuff was like otherwise. Getting free stuff also showed me the realm of possibilities and what could be done here.

Do you seriously think people are going to stick around if they can't play around with anything without putting a bunch of money in right away? And do you know how many newbies make friends by going around to places and collecting freebies?

Nothing says welcome to Second Life like a bunch of greedy money grubbing content creators out to bleed new residents dry.

I wasn't saying get rid of free content. Content creators (and I'm not one) should be able to give away what they want in their own stores. But the freebie islands or whatever you want to call them do no good economically speaking.

But someone is paying tier for the freebie places to stay open. SL being a good capitalist society, I don't see why anyone would shell out $200-$300 island tier per month to offer freebies if there wasn't a financial incentive in it for them. So they must be providing some economic impact.

Though it's an indirect connection, I will hold that the socializing that goes on between newbies in these places gives them incentive to stick around and form social networks that keep them here.