The metaverse is a term that describes a collective shared space that is shaped by myriad virtual environments and digital enhancements made to the actual physical world. Powered by technologies such as augmented reality, virtual reality, artificial intelligence, blockchain, and cryptocurrency, it has fired the imagination of tech giants like Facebook who have changed the name of their company to Metaverse! Of all the industry sectors, it is retail that has folly woken up to the potential of this technology.
It is not surprising that the metaverse is expected to grow into an $8 trillion market by 2030. This has particularly attracted the attention of many leading retail organizations that see the potential to create new business opportunities and customer experiences by leveraging what the metaverse has to offer.
Retail in the metaverse is not just about selling products online, but also about enabling immersive and personalized shopping journeys that transcend the boundaries of time and space. They can leverage the metaverse to offer customers more choices, convenience, entertainment, social interaction, and above all value.
Here are some of the ways that the metaverse is redefining retail shopping experiences and gaining more customer engagement than ever before.
Immersive and Interactive Virtual Stores
One of the most obvious and useful applications of the metaverse for retail is to create virtual stores that mimic or even enhance the physical store experiences. Customers can visit the stores using their digital avatars and browse through products like they would in a physical store. They can also try them on, interact with sales associates, and make purchases using digital methods of payment.
A case in point is that of Adidas which has partnered with Decentraland, a blockchain-based virtual world, to launch its own digital space where customers can explore its products, play games, and access exclusive content. Similarly, Gucci has come up with its own virtual store in the popular online gaming platform Roblox, where customers can go ahead and buy digital versions of its products for their avatars.
As compared to physical stores, virtual ones can offer customers greater variety and more customization options. A case in point is Vans, which has launched a metaverse store in the blockchain-based virtual world Sandbox. Inside this virtual store, customers can design their own shoes and clothing using non-fungible tokens. NFTs can also be used to create digital scarcity and exclusivity for certain products, increasing their value and appeal to customers.
Digitally Enhancing Physical Stores
Another brilliant way in which the metaverse can enhance retail shopping experiences is by adding digital layers to physical stores. This can be done with the help of augmented reality (AR) technology, which overlays digital information or images into the real world. Customers can use their smartphones or AR glasses to access these digital layers and interact with them. For instance, Nike has an AR app called Nike Fit that allows customers to scan their feet and find the best fit for their shoes. Similarly, Sephora has also developed an AR app called Virtual Artist that enables customers to try on different makeup products virtually.
AR technology can also be used to create interactive and gamified experiences for customers in physical stores. For instance, Lego has installed AR screens in some of its stores that show customers how their Lego sets would look when built. Walmart has also experimented with an AR scavenger hunt game that rewards customers with discounts and prizes for finding certain products in its stores.
Building Communities and Forging Social Connections
The metaverse can also help retailers build communities and forge social connections with their customers. That is on account of the fact that the metaverse offers a platform for customers to interact with each other, share their opinions and feedback, participate in events and activities, and co-create content and value. A fine example of this is Lululemon, which has created a virtual community called Sweatlife House in Spatial, a social VR app, that enables customers to can join yoga classes, meditation sessions, and wellness workshops. That apart, Starbucks has also launched a virtual coffeehouse in AltspaceVR, another social VR app, where customers can chat with each other over a cup of coffee.
Moreover, the metaverse can also enable retailers to connect with customers across different platforms and devices. Burberry has collaborated with Tencent Games to create a custom mini-game within Honor of Kings, a popular mobile game in China. The game features Burberry’s products and characters wearing its outfits. Customers can also access Burberry’s online store from within the game. Another similar example is that of Balenciaga which has created a video game called Afterworld: The Age of Tomorrow that showcases its 2021 collection. The game is playable on web browsers and mobile devices.
The Impact of Metaverse on the Retail Space
The metaverse is expected to grow significantly in the near future, creating new opportunities and challenges for the retail industry. The defining feature of the impact of the metaverse on retail is its potential to create immersive and personalized shopping experiences for customers. The metaverse, allows customers to interact with products, brands, and other shoppers in a 3D environment that simulates or surpasses reality. This takes the digital shopping experience to a level beyond even shopping at a physical store.
For instance, customers can try on clothes and accessories on their digital avatars, explore virtual stores and showrooms, and access exclusive content and events. This process provides more convenience and value for money than actually visiting physical stores to shop for clothes. Moreover, the metaverse can also enable customers to customize their products and express their identity through digital assets such as non-fungible tokens (NFTs), which are unique and verifiable digital representations of ownership.
Another important aspect of the impact of the metaverse on retail is the opportunity it affords to optimize operations and supply chains. The metaverse can help retailers reduce costs, improve efficiency, and enhance sustainability by leveraging data, automation, and smart contracts. Retailers can, for instance, use data from the metaverse to forecast demand, manage inventory, and personalize offers. They can also use automation to streamline processes such as order fulfillment, delivery, and customer service. Moreover, they can use smart contracts to facilitate transactions, verify provenance, and enforce agreements.
Yet another impact of the metaverse on the retail industry is the ability to analyze and respond to customer behavior in real time. The metaverse can provide retailers with rich and detailed insights into customer preferences, motivations, and emotions. For example, retailers can track customer movements, interactions, expressions, and feedback in the metaverse with the help of sensors, cameras, and biometrics. They can also use artificial intelligence to process and interpret this data and generate actionable recommendations. Furthermore, they can use the metaverse to engage customers in a timely and relevant manner through personalized content, offers, and rewards.
The metaverse truly has the potential to transform the retail industry by enabling retailers to create immersive and personalized shopping experiences, optimize operations and supply chains, and analyze and respond to customer behavior in real-time. However, to succeed in the metaverse, retailers will need to overcome some challenges such as ensuring security, privacy, interoperability, scalability, and regulation. They will also need to adapt their business models, strategies, and capabilities to the changing customer expectations and a hyper-competitive landscape.