Since Mark Zuckerberg promoted the concept of the metaverse – a 3D sequel to the internet – everyone’s been trying to envisage what it might look like. Now it’s retail’s turn.
By Nick Easen, an Award-winning journalist and broadcaster, he writes on science, technology, economics and business. He has produced content for BBC World News, CNN, Time magazine, Bloomberg, CNBC, The Times, Guardian and Telegraph.
I have just had a busy day undergoing retail therapy. Still unsure about which electric vehicle to buy after experiencing how Hyundai’s latest Ioniq model looks and feels, I popped over to the skate park to try on some Vans trainers. Then I headed to the Gucci Garden, where I was almost more interested in the exhibition and the butterflies flying around my avatar’s head than in checking out the new fashion collection.
This is the future of retail – today. You can already shop till you drop in the metaverse, albeit on a video-gaming platform such as Roblox, a system that more than 40 million people worldwide are familiar with. You can spend real money on virtual goods, fuelled by the likes of bitcoin, blockchain and non-fungible tokens (NFTs), where authenticity and currency are preserved in our virtual worlds.
This is just the start of so-called Web 3.0 and how it will transform our shopping habits, according to Luke Weston, brand experience strategy director at design agency Household.
“The metaverse could have a profound impact on the way that we shop,” he says. “Retail in this digital space will not be confined by channel, device or medium. It will be all around us, serving as a multilayered, extended reality in which the world becomes interactive, connected and shoppable.”
Virtual video-gaming worlds already have metaverse ambitions. They give us a glimpse of what the future might look like for retail before the likes of Facebook – or, rather, Meta – start investing huge sums in the field. That’s because three-quarters of the industry’s revenue comes from games that enable the sale of virtual goods, according to market research firm Newzoo.
The metaverse could have a profound impact on the way that we shop
Virtual shopping malls already exist, as do digitised retail products on these platforms. You can now buy all sorts of clothing and even angel wings to make your avatar stand out from the crowd. A digital copy of a real Gucci handbag was recently resold for more than £3,000. Pop star Zara Larsson has even made a seven-figure sum selling merchandise on Roblox. Simulated Ferraris can now be test-driven. Burberry operates a digital twin of its Tokyo store, while Tumi and Dermalogica have immersive online retail fronts. The metaverse has even spawned virtual flagship stores from Lancôme and Fendi.
“Reflecting what a physical store looks like is one approach that many retailers are taking,” says Emma Chiu, global director at Wunderman Thompson Intelligence. “But some brands are maximising the creative idea that digital should defy gravity and matter in retail.”
And therein lies the future. Bricks and mortar once defined how we shopped – physically hanging out at a shopping mall was as good as it got. Immersive fictional worlds accessed through virtual reality headsets in the comfort of your living room know no boundaries. Storytelling and new forms of engagement will become the norm. Some experts are calling this 360-degree retail.
The future of retail?
Envisage hopping around the world to visit different virtual stores, test-driving the digital twin of a new car or trying on an item of virtual clothing, where feedback updated in real time determines what products are released, and when, in both the metaverse and the real world.
The good thing about virtual retail is that it should be more sustainable and contribute less to climate change than real-world items. Retail brands will increasingly make that point: consume more virtually, less materially.
“Also imagine if researching a purchase were to no longer involve trawling the pages of an ecommerce site, scanning online reviews or watching adverts on social media,” Weston says. “Imagine if the shopping journey were in the metaverse instead, with the product in context, in an immersive virtual environment, shared with friends and guided by the brand’s ‘avatar ambassadors’. We also now foresee increasing value placed on virtual identities and possessions.”
Expect new collections to be revealed in the metaverse first. Real-world brands will also recruit for creative and technical talent to help enhance their metaverse capabilities. Brands could generate value through scarcity by creating rare digital assets, verified by NFTs and purchased with cryptocurrencies.
The metaverse provides the opportunity to create the ultimate brand experience
One concern for retailers in this brave new world is that, if the internet is the great leveller, then so is the metaverse. Anyone can set up a store front here.
“This raises the question of how you distinguish your offering against everyone else’s in the metaverse,” says Nick Cooper, global executive director, insights and analytics, at brand consultancy Landor & Fitch. “Distribution, location and availability issues are largely removed from the equation, while the footprint of every retail ‘estate’ is the same. This means that it will be impossible to stand out without a clear brand proposition.”
He continues: “Equally, if physical constraints are removed, the metaverse provides the opportunity to create the ultimate brand experience.”
Where the metaverse of retail gets interesting is how it starts to interact and merge with, as well as influence, the real world. The augmented experience will spawn new forms of consumerism and brand engagement, especially with new virtual, augmented and mixed-reality technologies aided by 5G connectivity.
Loyalty points in the virtual world could be redeemed at real stores. Retailers can democratise advisory services, since meeting big-name designers is easier when it’s done virtually. Expect blended-reality showrooms – Selfridges’ tie-up with clothing brand Charli Cohen and Pokémon gives an insight into what’s to come using AR and immersive digital experiences in store, accessible via a smartphone.
“Also take a look at Nike, which is on a mission to get kids moving,” Weston says. “It’s using virtual experiences to help achieve this. We expect more brands to use the metaverse as a means of connecting across realities.”
And, should a brand be wondering whether it should invest in the metaverse, just think of the opportunities, Cooper adds. “If everyone has an avatar that they want to clothe, beautify and house, the buying public essentially doubles in size,” he says. “So the future for retail is very bright.”
This feature appeared firstly in the www.raconteur.net