This new era of retail is about adding a human element to an invisible world of technology, blending in-store and online shopping experiences to create a true omnichannel shopping experience that is revolutionizing how consumers interact and engage with retailers. Enter the metaverse—shopping experiences integrated seamlessly throughout immersive digital worlds via a gaming platform or a virtual storefront.
Brands including Nike and Ralph Lauren have been testing the metaverse waters and they like what they’re seeing. In fact, Nike has made major moves towards a virtual future. They’ve filed metaverse-related patent and trademark applications, established a Metaverse Studio, launched Nikeland on Roblox, and acquired the virtual fashion startup RTFKT (source).
As the metaverse jumps from hype mode to reality, retailers and brands have a lot of upside potential for making the metaverse a part of their strategy. Here’s our take on the top 3 reasons why it’s a good idea for retail.
1. A better way to engage with new customers and younger generations on their terms
85% of consumers feel that for brands to be successful in the future, digital presences will be “essential.” Gen Z and Gen Alpha are “digital-natives” and are the first group of consumers to most likely start their shopping online before going in-store. Gaming has helped pave the way for them creating digital worlds that have carried over to all facets of their lives—and fashion retailers have taken the lead in collaborating with partners like Roblox to dress avatars in their brands. While largely undertaken as a branding awareness or marketing campaign, these brands see the potential to seed a new generation of consumers and strengthen their relationship with them. During his session at the National Retail Federation’s Big Show, Patrice Louvet, CEO of Ralph Lauren, said that the metaverse is an opportunity to build relationships with younger consumers.
Case in point: “According to Shopify, interactions with products featuring 3D/AR content had a 94% higher conversion rate than those without it. Consumers value the ability to try on real-world goods through AR and to visualize products in 3D, and these are features that can be transferred to more immersive digital settings (source).”
2. Humanizes digital experiences
As the digital and physical shopping world gets blurrier, integrating human touch points into technology and facilitating human-to-human communication to create a truly personalized shopping journey becomes more important. This is especially true for Gen Zers who are known for valuing experiences over material goods. A metaverse platform opens the door to building deeper customer relationships that can be customized to a specific customer’s likes and preferences, increasing engagement, personal connection and building brand loyalty.
3. Potential to drive significant revenue
According to Bloomberg Intelligence, the revenue opportunity could become $800 billion by 2024. Add to this the low to no cost of virtual goods that brands and retailers can make available on gaming or metaverse platforms and the enormous potential of unique nonfungible tokens, or NFTs, which are being sold for tens of thousands of dollars, and the metaverse could become a sizable revenue opportunity.
For example, Under Armour launched a series of footwear-themed NFTs priced at $333 each, featured in the image below. The company sold out of 2,974 copies after the December 2021 release.
There’s no doubt that the future of shopping will be shaped by the blending of the in-store and online experience. This is a dynamic we’ve all been witnessing in an accelerated way the past two years. Now, we’re beginning to see how digital is pushing this forward with the metaverse, augmented/virtual reality, social commerce. All of these technologies and platforms will play a pivotal role in strengthening customer relationships and ultimately, improving the overall consumer experience for generations to come.
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