Why are Retailers Setting up Shops in the Metaverse?
The metaverse enables retailers to build global hubs to serve millions of customers in the metaverse. Digital shopping creates many pathways to success.
Still in its infancy, the metaverse is an immersive, online space where cartoon-like 3D representations of ourselves, known as avatars, can walk around, talk, and interact with others. You typically access it by wearing a set of virtual reality (VR) goggles connected to your computer.
Nowadays a growing number of companies are expressing an interest and buying up space in the metaverse so that they can set up shop there. These firms include the likes of Adidas, Burberry, Gucci, Tommy Hilfiger, Nike, Balenciaga, Samsung, Louis Vuitton, and even banks HSBC and JP Morgan.
Nike is considered to be the biggest brand to commit most fully to a virtual future. The sportswear giant has been busy filing metaverse-related patent and trademark applications, establishing a Metaverse Studio, launching Nikeland on Roblox, and acquiring the virtual fashion startup RTFKT.
Luxury brands are making a strong showing as well. In 2020, Balenciaga unveiled plans to launch a metaverse business unit that would expand its digital initiatives, one of which being a video game that showcased its Fall 2021 collection. And in September 2021, the fashion house collaborated with Fortnite on virtual and physical apparel.
Gucci offered a wide range of digital items for sale in 2021, from $13 virtual sneakers to a unique Roblox handbag that resold for more than $4,000 and a video NFT auctioned by Christie’s for $25,000. Robert Triefus, Gucci’s executive vice president for brand and customer engagement, told The Business of Fashion, “We have proven to ourselves through these collaborations that the virtual world can create a very significant new revenue stream.”
Walmart’s trademark applications showed that the company is preparing to create its own NFTs and cryptocurrency and would start selling virtual electronics, toys, appliances, and home decor. In fact, a real estate metaverse seller is planning to build a virtual mall.
Such businesses pick locations from different providers of worlds within the metaverse, with the most popular ones including The Sandbox, Decentraland, Voxels, and Somnium Space, plus Meta’s own Horizon Worlds.
What are the Opportunities for the Retailer in the Metaverse?
The Metaverse is a blank canvas for retailers to innovate and provides new opportunities to build brand and sales. Retailers can also work together for collective benefit. Here are some ways we think retailers can take advantage of the Metaverse in unique and sticky ways:
1. Bridging Online and Virtual Currency Realms
The virtual worlds have thus far refused to enable easy ways to convert in-game currency for money that works in the physical world. This is a great opportunity for retailers to create their own currencies-either for a brand or a group of brands. In addition, these currencies may work in both the virtual and the real world.
2. Transferable Virtual Goods
Retailers could offer virtual goods for multiple worlds, to enable buyers to create a consistent style across the initially splintered Metaverse until it matures.
3. Shopping With Friends
Friends like to shop together, just as they like to go out to eat or to play video games together. Retailers could enable group shopping in the metaverse or enable scenarios where some shoppers are in the physical world while others are in the Metaverse and they are sharing the same experience together.
4. Making Shopping a Game
As PokemonGo proved the power of gamifying the entire world, retailers could create immersive games focused on their store environment, either online or off — and partner with other brands as well.
5. Providing Shoppers With a Bill of Rights for Their Virtual Goods
Virtual worlds have angered their participants by reserving the right to recall or modify purchased virtual goods. (In the case of Fortnite, the company regularly “nerfs” weapons that prove too powerful and upset the balance of games). Retailers could set a new and higher standard by creating guarantees of ownership on virtual goods in the Metaverse, allowing shoppers to restore purchases and prove provenance. This is akin to merging shopping and NFTs, a logical convergence.
6. Paying Metaverse Shoppers for Feedback
The cost of launching a new shoe or pushing out a new car design in the Metaverse is negligible. With the Metaverse increasingly resembling the real world in terms of product selection and demand, brands and retailers can test out new products and get feedback without paying for physical fabrication, shipping or store placement.
To sum up, we may assume that the Metaverse will evolve in ways none of us envisioned. As such, retailers should recognize that this is a paradigm shift that offers a rare chance to reinvent the way retail works. Staying on the sidelines means someone bolder and willing to experiment – either competitors or challenger brands – will reap the rewards of the brave new world.
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