Today’s omni-channel consumer shopping experiences include a combination of offline and online channels. While the physical stores are here to stay, the internet based virtual stores are going to be the next big thing. In fact, the future of shopping will be the virtual ‘meta’ world; where a consumer would have a virtual avatar, be able to visit a virtual shopping arcade, read product details, try products, interact with the virtual sales representative, place an order and pay through cryptocurrencies/digital wallet/NFTs. And the product would be delivered at their real world address.
Any retail segment, be it fashion, apparel, home improvement, FMCG, beauty, or accessories would be able to engage more meaningfully with the @home/@work consumer, keeping in mind the consumers’ convenience with the use of metaverse. A consumer would be able to hang out and shop in their avatar, try different colors, combinations, sizes and other endless options. With the ‘virtual’ and ‘augmented’ reality aspects of the metaverse, consumers would be able to interact with the product in the same way as they would in a physical store. The metaverse, the world’s digital counterpart where human profiles would be represented by avatars, would be enabled by the virtual economy (digital wallet/cryptocurrencies/NFT). In the metaverse, office spaces, property, and events would be mirrored. There would be metaverse real estate retail space on sale and lease across geos. The consumer would be able to move easily between one shop to another and other parts of the metaverse retail locations (coffee shop, movie hall, park), gaining an immersive experience. In short, the metaverse is a perfect fusion of physical, augmented, and virtual reality.
Some use cases include:
The possibilities are endless.
How metaverse can be the new dimension for modern retail brands
1. A personalized and engaging shopping experience - Retail brands would be able to connect and engage with consumers globally and offer a hyper-personalized experience. An online virtual space would enable fashion enthusiasts to experience how a particular piece of clothing will look on them.
2. Branding through games - Using AR/VR gaming platforms for engaging with millennials and generation Z consumers. Levis has collaborated with Snapchat to experiment its line of clothing in an authentic and personalized way. Fashion accessory brand Gucci has collaborated with online gaming platform Roblox to sell virtual (or digital) version of its Gucci Dionysus handbag.
3. Brands learn more about their customers – “Virtual dressing” can reveal a shopper’s tastes and preferences. Real time data collected by brands can be leveraged to understand the customers’ choices and demand of products across verticals and position their offerings better to capture market share.
4. Revolutionize virtual events - Metaverse can bridge geographical divides while mega retail events can be hosted on metaverse. A recent use of metaverse was by John Legend for his concert “Bigger Love” hosted by Wave featuring a digital avatar of Legend. The fashion industry is experimenting with metaverse and companies like IMVU and Faceless are planning to create their fashion show on the budding metaverse space.
Challenges with metaverse
1. Sharing the metaverse space between companies - Companies owning metaverse space would need to be open to interconnecting their worlds, so people can roam freely between them, to avoid duplication of metaverse spaces
2. Onboarding retail stores to metaverse – Retailers may not be keen to invest in a model that is not tested or the potential is unknown
3. Cost of setting up metaverse retail estate could be high- compared to internet based B2C portals or brick and mortar shops. This would include which costs for technology, human resources, devices, use of AI, blockchain, AR/VR, creating and managing digital identities which are verified/authenticated.
4.Create an infinite number of assets - In order to fuel customer engagement, brands will need to invest their time and budget in strategizing channels and producing an endless amount of content tailored to customer tastes and behavior patterns.
Aligning to customer needs and desires
It’s proven that businesses with omnichannel engagement strategies have higher consumer retention. The ability to move seamlessly from brick and mortar stores to online ordering to social media market place and in future to metaverse retail would be truly liberating for a consumer.
While metaverse is yet to arrive, different ways to experience pieces of the metaverse are already available. Some of it is accessible with the help of augmented reality (AR) or virtual reality (VR) technology, which blends the real and virtual worlds, either by using AR goggles or VR headsets. Some advanced platforms even feature sensors that translate the real-world gestures to a virtual world avatar.
Studies have shown that:
1. The amount of information stored in the memory is 70% higher when using AR, than when it’s not.
2. 61% of consumers prefer stores that offer augmented reality experiences.
3. If consumers could experience product in AR, 71% would return more often and 40% would pay more.
It’s not just the consumer market that’s taking advantage of AR, opportunities to boost sales are also taking off in the B2B environment. By 2022, the number of VR experiences in B2B will account for 40% of all experiences. The data for AR/VR is encouraging and shows a huge untapped potential for metaverse in retail that will impact the bottom line of businesses.
A single interconnected metaverse is more likely still decades away. With so many young people engaged in virtual reality games, the next generation will be much more comfortable with virtual worlds. They may even want their favorite brands to meet them there. Research shows that it’s not only the young generation but also the Generation X (aged 51 to 69) that are interested in VR with around 64% feeling positively about it.
Looking at the trends and benefits, it is likely that the metaverse will be a huge development for enhanced customer experience in the future digital world. It will represent an entire ecosystem of virtual realities, which are broader and more complex than the current internet ecosystem.