For many consumers, the metaverse is a vaguely futuristic concept, perhaps just now catching their attention. Retailers, however, can’t afford to be that relaxed about the metaverse. It is speeding our way and by the time the holiday shopping season rolls around, this new world will actually be here. Retailers need to know that laggards may not fare well in 2022 — and realize that the time to prepare for a virtual future is now.
Successful brands have a vibrant presence not only in the physical world, but also online, on mobile devices and on social media. The metaverse is simply the next extension of that presence. By embracing virtual reality, retailers can enable customers to interact with their brand in a unique immersive environment that tells a brand’s story and sets it apart. Richly detailed, interactive 3D spaces encourage shoppers to linger longer than conventional websites or mobile apps ever have.
Imagine the impact that exciting virtual spaces can have on holiday shoppers and it’s easy to see why online sales — along with customer engagement and brand loyalty — are bound to raise the bar during the year’s hottest shopping season.
The fashion industry has been among the first to stake a claim in the metaverse; luxury brands in particular invite shoppers to explore and play in innovative virtual spaces:
- Gucci has promoted a virtual handbag on the popular and well-established gaming platform Roblox and sold it for $4,100, way above its physical price tag.
- Louis Vuitton created a virtual game to celebrate the founder’s 200th birthday, packed with trivia challenges, prizes and surprises meant to draw young customers.
- Dior Beauty created its own holiday virtual store, highlighting gift options and limited edition products in its Atelier of Dreams.
“Marketers, store designers, merchandisers and more will have to begin thinking very differently about what a ‘store’ is,” Maghan McDowell writes in Vogue Business. “In a world where any experience is possible, why on earth would we use our industrial era version of retail as a template for the future?” Virtual stores offer the possibility of “a third mode of shopping that resembles neither stores nor websites,” she notes, but rather combines “the best of both the physical and virtual worlds.”
The metaverse is young, but data analysis offers a good indication of where it’s going. Calling it “the next big technology platform,” Bloomberg reports that the metaverse market is on track to approach $800 billion in 2024. That represents a compound annual growth rate (CAGR) of more than 13%, compared to a market of less than $500 billion in 2020.
At the moment, gaming hardware, software, services and in-game ad revenues are the primary revenue generators in the metaverse, projected to reach $413 billion in 2024, up from $275 billion in 2020. But online game makers that seize the opportunity to create virtual worlds within their games (remember Gucci and Louis Vuitton) could earn an even greater share of future gaming sales. In total, the metaverse market is expected to exceed the current gaming market by nearly three times.
And looking ten years ahead, a February 2022 Credit Suisse report predicts that “even modest metaverse usage” could drive the CAGR for internet traffic an additional 37% over the current 30% rate — multiplying current data usage 20 times over.
At the user level, consumers have been found to spend more than 14 minutes, immersed in 3D virtual shopping experiences, in contrast to less than two minutes on static 2D ecommerce sites. That boost in customer engagement translates to a 70% increase in conversion rates — and retailers offering a virtual shopping environment like a metaverse have seen ROIs grow by 450%.
Beyond that benefit, retailers who leverage today’s advanced virtual reality technology have access to data analytics based on user interactions in the metaverse, which can help optimize product placement. Marketers can not only determine which products are most popular, but also analyze traffic and track user activity, essential steps toward increasing customer engagement, brand loyalty and, ultimately, sales.
Spread the brand story
Unlike retail spaces in the physical world, virtual experiences have very few limitations. They’re never hindered by construction costs, crowded showrooms, inconvenient locations, or the wrong time of day. In the metaverse, even the most fantastical visions can be brought vividly to life and made accessible by retailers to all consumers.
It’s also possible to manage 3D virtual reality stores with software-as-a-service (SaaS) solutions that give retailers full control, without requiring technological expertise. Once they’ve established a strong presence in the metaverse, brands can update their product offerings, store decor and narratives quickly and easily. This allows brands to align virtual stores with other channels like physical stores and websites, as it’s crucial to ensure that the brand narrative is cohesive across all sales channels, making for a perfect omnichannel approach. Virtual stores may also be integrated with ecommerce systems already in place, facilitating inventory management and direct checkouts.
The metaverse can be an exciting yet comfortable space where customers leave their everyday reality behind and connect with brands on an emotional, personal level.
What’s still to come
It may be a while before the metaverse substantially changes how we work and play and communicate and learn, according to WGSN Insights’ senior strategist, Cassandra Napoli. Still, there are many “entrance points” that retailers should be thinking about now, she says: “Brands must begin to wrap their heads around these immersive virtual spaces and plan their corporate metaverse strategy or run the risk of falling behind.”
The Robin Report neatly sums up the significance of the metaverse, predicting that it will become “a new way to experience the internet,” and represent “an opportunity for any brand ready to meet customers where they are–whether in this world, or one that has not yet been created.”
Original Source: ” Metaverse shopping: Retailers’ new reality”, Venture Beat , June 5 , 2022