The metaverse has emerged as one of the most promising technological trends shaping the future of retail. In his novel Snow Crash, writer Neal Stephenson first conceptualized it in 1992, which he described as a digital world where people interact and buy things like real estate.
Fast-forward to 2021, metaverse became a buzzword when Facebook capitalized on its growing popularity by rebranding its parent company as Meta.
This article will discuss what the metaverse is, the benefits of adopting it in retail, and how it will change future shopping.
What is the metaverse?
Meta defines the metaverse as “the next evolution in social connection and the successor to the mobile internet.” It will digitally connect users with people and will “get them even closer to that feeling of being together in person.” It is the version of the internet in which users, in the form of an avatar, enter a single shared environment to experience a 4D world featuring both virtual and augmented reality.
No single entity or corporation owns the metaverse. Instead, it’s a virtual 3D network where everyone can join. Companies have leveraged this to create their own metaverses by developing their respective platforms, headsets, and other technologies to enter. Meta, Apple, Amazon, Roblox, Microsoft, Epic Games, and Nvidia are the top metaverse development companies.
So, how does the metaverse apply in the real world, and how can it improve our day-to-day needs?
Instead of video calling on a 2D screen, you can meet your friend at a virtual concert in the metaverse. In higher learning institutions, for example, a university offering a social work degree used virtual reality to reach and support foster and adoptive families in the metaverse. This use case may be leveraged to advertise fast-track social work degrees online.
And what would retail look like in the metaverse? Meta says you can attend any launch event from anywhere in the world—in the comfort of your own home—to buy physical and digital products. Put on virtual goggles, and you’ll be whisked into a mall to try on clothes and test other products without moving from your seat. Indeed, the metaverse is taking things to a whole new level.
How does the metaverse relate to retail?
Currently, e-commerce dominates the retail landscape. Most customers browse and search the internet to buy things online. E-commerce is made possible by the rapid adoption of smartphones and faster fiber connections.
While e-commerce is convenient, it still suffers from limitations. One of the pronounced disadvantages is the absence of physical interaction, which is very important to shoppers.
Despite the convenience of online shopping, a segment of customers prefer the tactile experience of retail shopping to see and feel the products firsthand. If you’re buying electronics online, you can’t test the gadget to see if it works properly before purchasing them. Buying from a trusted supplier is the only way to mitigate this risk.
The metaverse offers a way to overcome these limitations. As mentioned, you can move through stores as if you’re physically within them and virtually try the products you want to purchase. Metaverse aims to create a more realistic feel for online shopping and increase sales.
As the metaverse continues to innovate, it shows no signs of slowing down. Given consumers’ fascination with the digital realm, Statista predicts the metaverse market size will reach US$936.6 billion by 2030.
How retailers can benefit from the Metaverse
Since companies can create their metaverse, this creates opportunities for them to grow, reach new shoppers, and find creative ways to increase their revenue stream.
Here are the benefits retailers can get from the metaverse:
New audience and loyalty
Gen Z (15-27 years old) and Gen Alpha (0-15) are the generations gearing up to become the potential inhabitants of the metaverse. These two generations will be the natives of the new virtual world and use the platform to socialize and explore.
And in the metaverse, loyalty is more than just “repeat” purchases. In the digital realm, Gen Zs and Gen Alphas want incentives like perks and discounts to be engaged.
Evolving with the metaverse
The early bird gets the worm. Retailers entering the metaverse in its infancy can evolve with the technology. And when it flourishes, they can become key players and experts.
NFTs and digital twins
Retailers can replicate a digital twin of their products through non-fungible tokens (NFTs). These assets, like art, digital content, or video, have been tokenized through blockchain. If the NFTs get sold, retailers can earn huge profits from them.
Marketing
In the metaverse, anything is possible. Retailers can create gaming worlds that dabble as in-game advertising or product placements.
Phygital (physical and digital medium) retail
The metaverse can be incorporated into phygital retail using sensors, mobile devices, extended reality (XR), and social networks to create a seamless experience for new people. An example of the phygital experience is Amazon Fresh which merged the convenience of online shopping with the traditional in-store experience.
According to Shipbob, customers used the Amazon smartphone app to enter the store. When they pick up items, sensors automatically add and scan them in the app’s digital cart.
If they change their mind and return the item, it is automatically removed from their cart. When they finish shopping, Amazon charges the goods and sends them a receipt. This offers them a no-hassle shopping experience.
How the metaverse will change shopping
The metaverse is poised to revolutionize online shopping. Here’s how:
Product placement
This involves inserting a commercial product or brand within movies, series, and programs. It can be shown, mentioned by the character, or integrated into a narrative action.
In the metaverse, brands can advertise their products in more customized environments that show their features best. Some metaverse platforms provide space to place ads. Businesses can rent it for a particular time. The ads can be aired in prominent areas, virtual rooms, or even streets of the metaverse.
Complex products can be marketed through interactive demos
If you’re selling software, the metaverse can up the ante by allowing virtual walkthroughs and demos, giving the customer deeper insights into how the product will benefit their situation. Product demos can also be high-end luxury items unavailable in physical stores due to logistical and security issues.
You can also deploy a virtual assistant to help run the store and deliver a new marketing experience. This assistant can answer queries when customers interact with the product or when they need assistance.
Seamless interaction with other people
Online shopping is predominantly a solitary experience. Users click on the desired product, add it to their cart, read reviews, and purchase. Unlike in a physical store where they can see other shoppers, customers get little interaction with other buyers to learn more about what they experienced using the product, see their reactions, and get shopping advice.
The metaverse addresses the lack of interaction and makes online shopping more socialized. Customers can shop for their favorite products in a social VR environment to talk with other shoppers and see their reactions in real time.
In the digital realm, brands can personally know their customers and ask what they prefer to create more personalized deals instead of the traditional generalized feel of e-commerce.
A new way of doing business
The metaverse could be the next frontier of online shopping. Its emergence could bring more opportunities for businesses to advertise their products and generate new revenue streams. This is their chance to offer a more cohesive, personalized, and immersive retail experience.
While the metaverse is still in its infancy, businesses should start studying use cases to replicate the success of other companies and apply it in their strategies.
