Metaverse: The new, hot arena of personalized & imaginative retail
By: Sruthi Menon
The year is 2032. Imagine dressing up in a classy outfit, driving a high-end car, and meeting someone in a fancy cafe or pub without ever leaving your house. Yes, it could be possible, probably not in this real world, but in a universe that straddles fact, fancy, fiction, and some fantasy — the metaverse!
But let us rewind it back and come back to the present for now!
In 2021, Facebook changed its name to ‘Meta’ and announced multibillion-dollar investments in metaverse technologies, indicating its emphasis on shaping the future of the metaverse.
The concept of the metaverse is not new. By now, we have seen the progression of retailing from traditional to electronic to the metaverse. Several brands have waded into the metaverse for marketing and brand development, too.
The metaverse can be a shopping haven for investors and consumers alike. The brand equity that could be created in the world around you by expanding to a new, mobile, global, and diverse audience can create endless possibilities.
Nikeland, an interactive world where visitors may play mini-games and live a lifestyle centered on sport and play, was launched by the athletic gear brand, Nike. Samsung opened its first metaverse store in Decentraland in January 2022. Popular beverage company Coca-Cola is also breaking through the metaverse. Adidas expanded its market and established auctions for original and collaboration items on OpenSea, the world’s largest NFT platform to allow users to possess one-of-a-kind assets and encourage people to seek creativity and individuality through fashion.
The world of the metaverse
The metaverse is a dynamic virtual and augmented reality experience in which users can communicate, interact, and transact. The metaverse can be seen as the internet and is already perceived as a significant commercial and financial opportunity by the IT industry and other allied sectors.
Despite the pandemic, the worldwide metaverse market, which was valued at $107.1 billion in 2020, is expected to grow to $758.6 billion by 2026.
In the metaverse, users will be able to access 3-D augmented or virtual reality settings through digital glasses, virtual reality headsets, and other devices. They can communicate with friends, work, travel to remote regions, conduct business, and pursue educational opportunities — all in a modern and immersive environment mediated by technology.
Retailers are already glimpsing the metaverse as a significant opportunity to revolutionize how customers engage with their products and stores, as well as to improve their marketing efforts.
Metaverse in retail
There are various advantages to having a metaverse footprint. Several brands are working towards making the metaverse a consumer-friendly environment.
Metaverse blends all of the possibilities that we have today in one place. The spatial dimension is taken into consideration as retailers could operate simultaneously in three different, but intertwined spaces. Immersive realism, accessibility to identification, interoperability, and scalability are all crucial factors in moving from a collection of isolated virtual worlds to an integrated network of 3D virtual worlds, or metaverse.
Retailers are drawn to the metaverse because it provides clients with a unique purchasing experience. It is not restricted by physical space when a store is opened in the metaverse. You can have as many products as you want and as much shelf space as you want. Your store can also be open 24 hours a day, seven days a week and customers can also shop from anywhere in the world!
Brands may now sell both virtual and physical goods on the same platform, thanks to the metaverse. This opens a plethora of new business opportunities and alters the face of online retailing. For example, it allows businesses to sell virtual goods directly to clients in a virtual environment, removing the need for supply chain management.
Direct-to-consumer sales allow retailers to enter the market without going via a middleman. Furthermore, before selling something to a customer in person, brands can digitally display it.
Retailers have discovered that following customers rather than persuading them to visit physical stores are a better strategy. Furthermore, virtual networking has grown in popularity around the world.
Customers have started appreciating how convenient and time-saving virtual stores are. The concept of personalization will be far better than in traditional stores. Virtual stores can also help sellers increase interaction and expand their clientele by lowering bounce rates.
The digital landscape demands intellectual curiosity. With the ever-growing technology, brands should always be in a test-and-learn mindset.
The metaverse could be the next generation of how humans connect, communicate, and transact on the internet. There are several aspects brands can focus on to make the metaverse a more customer-friendly environment.
Fitting your brand in the metaverse
One of the biggest opportunities for brands to thrive in the metaverse is by leveraging the lack of geographical restrictions. And just as the metaverse will alter how we purchase, communicate, and interact, it will alter how customer service is provided.
Retailers should be able to deliver global real-time service from their own systems anywhere in the world, thanks to AI and avatars.
The metaverse, unlike physical stores, is not constrained by word count or advertising space. It gives businesses endless space to offer product information, which is expected to increase the volume of questions from customers. This can be utilized by brands to improve customer experience.
Know your target customers
Brands must analyze how much time their target audience/customers could spend in the metaverse and adjust their adoption rate accordingly. The metaverse is an excellent fit for Gen-Z, the tech-forward market who are highly accustomed to the virtual experience. The newer generation, who make up one-third of all respondents, are attracted to buying things virtually.
Understanding your target demographics, and what behaviours are currently trending among your present and future customers indicate how quickly you should move into this space. Metaverse also makes it easier and faster to consume and analyze insights and data on consumer behaviour.
Another potential technology that could help Metaverse gain popularity in the retail sector is augmented reality (AR). IKEA and Amazon have invested in augmented reality to allow customers to visualize how items might appear in their homes and businesses.
Digital avatar products
The experiences, on the other hand, would be a big part of Metaverse clothing’s attractiveness. Users can engage with products via digital avatars in the metaverse’s virtual settings.
The retail uses of the metaverse could also include the introduction of merchandise for digital avatars. You can not only shop with your digital avatars in the metaverse but also buy digital merchandise for them.
For virtual avatars, top designers such as Louis Vuitton and Gucci sell digital products such as jewellery and handbags.
Challenges for brands
The alleyways of the metaverse can be luring and electric — for that is where innovation is at its dreamy best. The scenarios that could unfold are multi-layered and there is no end to the variety that may unfold.
But metaverse retailing is new and brands will have a steep learning curve. The brands will have to test, learn, and refine in the space to get optimum traction. As per a McKinsey report, brands must ‘align’ talent and tech capabilities and embed them in their respective business strategies.
To conclude, the use of digital shopping in the metaverse may usher in a new era of industry sustainability. Digital retail may reduce emissions while conserving resources, time, and energy. But for now, one thing is certain. In the coming years, more retail businesses will join the metaverse, altering the shopping dimension for everyone.