As technology improves, the potential for retailers to make use of the metaverse will grow.
No single definition of the
metaverse is widely accepted, but in his piece for The Telegraph's business section, Matthew Sparkes defines the metaverse as "a shared online space that incorporates 3D graphics.”
Although the term "metaverse" was coined back in 1987 by a science fiction writer, its depiction has remained more fictional than scientific. In recent years, however—thanks to technological advancements—the concept of the metaverse has become increasingly tangible. The buzz started when Mark
Zuckerberg announced plans to rename Facebook to Meta. Since then, many retailers have hopped on the metaverse bandwagon.
Nike has filed for several trademarks, allowing it to produce and sell shoes and apparel of virtually any kind. JP Morgan opened their first virtual bank branch, and Samsung recreated their New York City flagship store in Decentraland. They're using the platform to launch new products, hold events—everything you'd expect from a real-world retail
location!
While many retailers are already taking advantage of the metaverse, there is still uncertainty about whether this virtual world will continue to grow in popularity or if it is a short-lived fad.
First, Dispelling Some Metaverse myths
There is a huge amount of confusion about the metaverse, partly because it's new technology that people don't understand.
Myth 1: You need a VR headset to access the metaverse
People without VR headsets can also access the metaverse through their personal computers by creating avatars. For example, customers of Decentraland create these avatars and log in to explore virtual landscapes on screen. Additionally, Snapchat has created an entire "Extended Reality" Metaverse with only smart phones. Think outside the box.
Myth 2:
The metaverse will replace real-life interactions
Rather than replacing existing modes of communication, the Metaverse creates a more exciting and interactive mode with which to communicate. It’s helpful to compare the metaverse with the rise of smartphones. Smartphones have transformed how people interact, allowing them to stay in touch with their social networks 24/7. But face-to-face interactions are still important and will continue in some form—just like they do
now.
Myth 3: The metaverse is just for gaming
While gaming remains the dominant driver of user involvement with the metaverse (97 per cent of gaming executives believe that today), other activities, such as shopping and social networking, are becoming increasingly popular.
.Yet, gaming isn't where it's at: a recent survey by McKinsey & Company found that in the next five years, customers' preferred activity on the
metaverse will be shopping virtually—followed by attending telehealth appointments and virtual synchronous courses.
Keeping expectations realistic
In its present form, the metaverse lacks the technological infrastructure necessary to meet market demands. It is appropriate to compare this situation with that of the dot-com bubble between 1995 and 2000—a time when speculation rather than solid business plans fueled investment in
internet-based companies.
As a result, there are strong expectations for how such technologies will perform. A recent survey of 1,500 consumers found that 51 percent of people expect customer service to be better in the metaverse than it is today—and only 18 percent felt that it would remain unchanged. 32 percent of customers expect less frustration and anxiety when dealing with customer service agents in the metaverse, while 27 percent believe that virtual avatar assistants
will be more effective than online chatbots.
As metaverse technology is still in its infancy stage, the focus remains on developing infrastructure and processes for the future. But some people may be unrealistic about what a reimagined world can deliver, causing them to overinvest or otherwise make snap judgments based on feelings rather than facts
The Opportunities are Real
As technology improves, retailers
will be able to use virtual reality and other internet-based technologies in ways that weren't possible before. At the moment, it's already possible for retailers to take advantage of three key opportunities:
Retailers can use virtual billboards and interactive advertisements to expand their presence, with less noise compared to existing online or mobile channels.
In December of last year, Cloud Nine—an IT services company—was one of the first to advertise on
virtual billboards in Decentraland. This was a marketing move that other businesses should keep in mind as well.
The metaverse could also offer unique experiences for customers to engage with brands by hosting events, running contests, and adding game-like features. Such interactions would increase customer loyalty and brand engagement.
The Metaverse Fashion Week is an example of how retailers can use virtual fashion shows to create unique brand experiences.
The pilot program, which featured Tommy Hilfiger, Perry Ellis and Dolce & Gabbana brands among others was widely successful in leading the industry shift towards immersive customer engagements.
The virtual environment offers retailers the chance to offer their customers a more personalized experience. Just as online stores can customize customer experiences by collecting data on them, so too can they do in the metaverse. Metaverse's Horizon World gives users the ability to
create their own virtual worlds, invite friends and customize their experience.
It's clear that there is a huge learning curve here, and anyone who thinks they understand the metaverse completely would be lying. However it's also clear that it will be a huge boon for retailers sooner than later, but we still need a little patience and understanding while it develops.
The most important thing to remember is that this is still in the very early days of VR/MR
(virtual reality/mixed reality). It's going to take time for everyone involved in the industry to figure out how things are going to work best, what works well together and what doesn't, etc.
We're not just talking about hardware manufacturers like Oculus or HTC Vive—we're talking about developers, content creators, merchants and consumers too! Everyone needs some time to get used to all these new technologies so they can figure out how they can best use them for their
own benefit.
It's also important for retailers to realize that there isn't just one way of doing things in virtual reality—it depends on what type of store you have and how much money you want to spend on your store design versus how much you want customers coming through your doors (and back again).