Metaverse Shopping: Retailers’ new Reality
NFTs are a major aspect of the metaverse that retailers don’t want to lose out on. Read on to know how to set a useful presence as a shopper in the metaverse.
It is expected that the metaverse will revolutionize the retail industry which went through several changes over the past decade, moving from bricks and mortar retail to e-commerce and social commerce and now moving into the digital world.
Metaverse shopping is any commercial transaction made in immersive, online, virtual worlds. Major brands and companies are now rushing to ride the wave of the metaverse by creating different consumer experiences in this new world.
Metaverse is undoubtedly a commercial enterprise. It is an immersive virtual space accessed through virtual reality, augmented reality, and other devices that leapt into mainstream public consciousness in October 2021. That’s when Mark Zuckerberg announced Facebook’s rebranding as Meta, asking us to think of it less as a social media company and more as a metaverse pioneer.
What is the Metaverse?
The metaverse is still in the early stages of development, and it is really difficult to understand it completely. This platform can be described as the next version of the internet that combines a number of technologies including virtual reality, augmented reality, videos and other communication means, which will allow users to game, work, shop, socialise and communicate digitally creating an online virtual world that is parallel to the world we live in.
We see that the metaverse trend is evolving in the tech sector with a predicted $800 billion market opportunity by 2024 and with Facebook taking the first steps in making the metaverse a reality.
The idea is to create a platform similar to the internet, where people can walk around inside of it and where they can interact with one another in real time. Users will be able to build assets that will only exist in the metaverse and have real monetary value, then they can even buy or sell them. The assets are in the form of NFTs (Non Fungible Tokens) and they could be land, art, clothing and other items.
NFTs play a massive role in the retail industry and is the main element that would make retail in the metaverse possible and profitable, and users can pay for NFTs only with cryptocurrencies.
Now there are a number of virtual worlds such as Decentraland, Somnium Space, the SandBox, Roblox, Second Life, Cryptovoxels, SuperWorld, Zepeto and many others, each of which uses certain blockchain technology and has its own cryptocurrency.
For the retail industry, the metaverse will combine the actual physical shopping and the e-commerce shopping, where consumers will get the feel of the physical shopping but in his/her own comfort.
Retail Trends in the Metaverse
Brands have already started their steps into the metaverse as they always try to embrace all channels of retail possible to them and to create innovative consumer experiences to motivate sales of their products.
Nike, one of the big brands, embraced the metaverse with bold steps and has recently acquired Rtfkt, which is a leading brand in NFT creation. This enables Nike create their unique digital sneakers and clothes.
Moreover, Nike launched Nikeland in Roblox, which is a virtual world of sports and slick-looking apparel by Nike. Players would be able to wear this Nike apparel while playing. Nike has also filed a number of new trademark applications that specifically covers downloadable virtual goods and retail store services featuring virtual goods.
Luxury brand Gucci has bought a virtual land in the SandBox to expand its Gucci Vault, its online concept store to create an interactive consumer experience. In 2021, Gucci even opened a Gucci Garden in Roblox, where users can buy Gucci digital collectibles. The digital version of the Dionysus bag on Roblox released by Gucci was sold for 350,000 Robux (USD 4,115).
Ralph Lauren is another brand that offered some of its collection on Roblox. Louis Vuitton as well provided customized “skins” (graphic appearances) for various games being played in the metaverse environment.
The first food order in the metaverse was in March 2021 through Decentraland, one of the most popular virtual platforms to buy land and digital assets. Grocery shopping in the metaverse will help with staff shortages, supply and demand, and optimizing buying experiences.
People may invest in real estate in the metaverse and see massive returns. For eample, someone paid $450,000 to live next to Snoop Dogg. Virtual homes, lots, and land are all being bought today because they are assumed to rise in value going forward.
The virtual reality gives consumers the opportunity for an in-depth experience. In 2021 a virtual mall named Metamall was launched. It is a platform where users can spend time, meet friends and interact with them at a cafe and even buy or lease a space in the Metamall. Metamall allows brands to set up their virtual shops in which they would be free to experiment with store designs and provide users with unique experiences.
Issues Related to Retail in the Metaverse
In the case of the absence of existing standards, precedents and regulations the metaverse will bring multiple new legal implications.
Trademark Protection and Infringements: Brand protection has become important in the metaverse, as brands have already started using and offering their brands in the metaverse. Therefore there comes some challenges such as the registration of trademarks and which classes can be covered and in which countries to be registered.
Infringement of trademark has already started to appear in the metaverse. For example, the luxury French fashion house Hermès sued a digital artist for copying its Birkin handbag through the issuance of MetaBirkins NFTs. It is a case of infringement of well-known Birkin trademark and dilution of the distinctive quality of Hermes famous handbag.
Unlimited licensing possibilities: Any brand can offer unlimited number of products in the metaverse, and it creates huge opportunities for brands to expand in many different products and service offerings. This brings challenges on how quality control will be achieved and measured.
Copyright related issues: In the metaverse copyright will have a bigger role to play due to the NFTs. The content of NFT is subject to copyright, and content owners shall understand their usage rights. The smart contract used for purchasing NFTs shall be carefully drafted as infringement of copyright in the metaverse is already a big challenge and there are also disputes related to copyright ownership in NFTs.
Property related issues: As we know, there are lots of brands purchasing lands and leasing shops in the metaverse. Thus a question arises on how such ownership or lease will be treated and whether the current property and real state laws would apply.
The more we use metaverse the more issues arise similar to all legal issues that we are still facing with the online presence.
Though the metaverse offers massive opportunities there are always some challenges. This new world requires different legal thinking and new solutions to what could be a rapidly changing area. However, business owners in the retail industry should be ready to embrace this new digital world and get their rights protected at an early stage.
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