The Challenge

By 2022, KFC faced a decline in store traffic and business performance, particularly among young consumers who were spending more time in virtual spaces than in physical locations. The challenge was clear: how could KFC remain culturally relevant and drive sales when traditional consumer behaviors, like hanging out with friends at physical stores, were evolving into virtual experiences?

Gen Z’s preference for virtual socializing posed a significant challenge. Research revealed that half of Gen Z spent more time in gaming environments than in real-world interactions, prioritizing virtual status and connections as much as physical ones. To address this shift, KFC needed to create new consumption occasions within the virtual world while maintaining its brand authenticity and driving real-world sales.

The Solution

The solution was to establish the KFC Re:Store — a fully shoppable virtual experience hosted on QQ, China’s leading platform for young audiences. Collaborating closely with a Gen Z creative team, KFC crafted an immersive virtual environment that mirrored the social dynamics and cultural codes of Web 3.0. The strategy focused on three key principles:

1. Authentic Engagement: KFC aimed to authentically integrate into the virtual lives of Gen Z by creating virtual assets that offered both virtual credibility and real-world desirability.
2. Social Connectivity: The Re:Store was designed as a vibrant social hub where users could interact, play games, and hang out with friends, including virtual encounters with Colonel Sanders himself.
3. Seamless Commerce: To bridge virtual engagement with real-world impact, KFC ensured that users could seamlessly convert virtual interactions into tangible actions, such as redeeming vouchers in physical stores or ordering virtual meals for delivery.

Creating the KFC Re:Store

The launch of the KFC Re:Store exceeded expectations:

• Social Engagement: Within five weeks, the Re:Store attracted 19 million visitors and generated 4.3 billion interactions. Users engaged in 850 million chats with Colonel Sanders and took over 6 million virtual selfies.
• Virtual Merchandise: KFC introduced a range of virtual products including clothing, furniture, and even a virtual pet named Fengwan, alongside virtual KFC meals. The introduction of KFC Chicken Coins as a virtual currency saw rapid adoption, with 30 million coins distributed in just three days.
• Commerce Integration: Crucially, the Re:Store facilitated seamless commerce between virtual and physical worlds. Over 180 million virtual KFC food items were sold, and innovative features allowed users to order from the metaverse for delivery in the real world—a pioneering initiative that set a new standard in borderless commerce.

Results

The impact of the KFC Re:Store was profound:

• Sales and Engagement: The virtual store outsold physical KFC stores by a significant margin, with almost 7 million pieces of virtual clothing, 11 million items of virtual furniture, and 180 million virtual KFC food items sold.
• Real-World Impact: The Re:Store not only boosted online engagement but also drove offline sales. During a key promotional period, the launch of the "CP Burger" in the Reaccelerated sales five times faster than previous years, selling 4 million burgers within a week.
• Commercial Model Innovation: KFC’s integration of virtual and real-world commerce established a new commercial model, demonstrating the potential for virtual experiences to drive tangible business outcomes.