What is the metaverse?
The metaverse is a virtual reality made up of individual worlds where one can undertake many real-life activities. It’s likely to completely replace the internet as we experience it today, connecting the realms of gaming, e-commerce, social media and more into one large, seamless digital experience. https://45727f0ef94025f06e6627c6206e0135.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
For retail, the metaverse will be an opportunity to deliver a virtual experience for customers without the limitations of traditional supply chain, manufacturing, or even physics. To think of it as a big virtual shopping mall is very likely underselling it, because the metaverse will be beyond anything we’ve seen. Traditional shopping journeys will be redundant with the possibilities it presents.
While many retailers have experimented with digital experiences like augmented reality (AR) and virtual shopping over the past several years, the metaverse means a major shift towards completely blurring the boundaries of physical and digital brand experiences.
Who will the metaverse be for?
Right now, we’re seeing it play out as a concept for gamers and early adopters of technology, but in the future, everyone will probably adopt the metaverse. Just like today’s internet – filled with easy-to-use website builders and cheap domain names – it will be designed and developed by all of us, once it hits mass adoption.
Until then, it will likely be led by brands, tech companies, gaming organisations, and even governments as they look to create virtual realms for their products and services. A quick scan of LinkedIn will show you that some companies are even toying with the idea of virtual meetings, where instead of your face on a screen via Zoom, you are an avatar, sitting at a virtual table and taking part.
If there’s one thing the pandemic has influenced dramatically, it’s the relevance of digital connection and socialisation within our day-to-day lives. Online worlds are becoming more realistic, with many using games and social-media platforms to escape lockdowns and connect virtually with friends, families, and like-minded people all over the globe. E-commerce has also become more widely adopted by the older generation, who have been forced to change their shopping habits. The one thing that is missing (which the metaverse will bring) is the physicality of the digital brand experience.
For retailers globally, the metaverse presents an opportunity to push boundaries creatively, and leverage a competitive edge through what some are calling the third dimension of e-commerce. Millions of dollars are already being spent by real-estate organisations securing their ‘virtual Rodeo Drive’, snapping up premium locations in worlds that already exist.
Fashion brands are getting into crypto, even designing and selling non-fungible tokens (NFTs), and ad agencies are using major A-list celebrities to push the adoption of cryptocurrency for those who are yet to jump on board. The more retailers experiment with new technologies and digital brand experiences, the more likely they are to continue to maintain not only a competitive advantage, but the attention of younger generations.
What’s already happening?
There are already some exciting developments within the industry that highlight the future focus on new-wave digital brand experiences. From time-zone agnostic virtual fashion shows, brand launches and activations, to digital products like NFTs and more, brands are diving head first into the metaverse globally.
The Gucci Garden within the Roblox gaming world had an unbelievable 19 million visitors after launching in mid 2021. The space, which was open for two weeks, had digital collectables and limited-edition Gucci products, while also echoing the real-world exhibitions across the globe. Roblox’s predominantly Gen Z audience was exposed to the luxury fashion brand like never before, even snapping up digital products that are now considered limited-edition pieces as they purchased items for their digital avatars.
Roblox-specific products (like a Gucci Dionysus Bag with Bee that was recently resold for over $4,100 worth of Robux) present a completely new market for retailers, and demonstrate that even though the metaverse is seemingly limitless, it’s still possible to inject an element of scarcity and exclusivity within the digital realm.
This year, Decentraland will host its first virtual fashion week, in collaboration with UNXD (a blockchain luxury marketplace), including catwalk shows, after parties and pop-up stores. And like Walmart throughout 2021, many retailers are looking to trademark meta-brand related terms to ensure they don’t miss out on their piece of the pie.
Another dimension for shoppers
More than anything, the metaverse is another channel to engage and delight your audiences. It’s more than just shopping for products and services online, particularly for younger generations. It’s about truly immersive experiences and transcendence beyond one’s physical identity. Younger generations consider digital assets just as valuable, if not more so, than physical ones, and use these to express their individuality within the digital sphere. Retailers that recognise this need for self-expression and engagement will dominate as the metaverse becomes more of a reality.
Retailers will need to adjust their current ROI criteria towards different metrics than the traditional bottom line, and accept that not everything will work. For example, Burberry’s fashion launch on Twitch, while highly experimental and forward thinking, was not received with unified celebration. Some called it confused and lacking clear brand storytelling. ROI will head in the right direction only when the metaverse gains critical mass, so those who are looking at a secure investment will likely find it hard to quantify quickly. This is all about the long game.
Just having a presence there is also not enough. With millions being spent on metaverse real estate, there could be the assumption that securing enough virtual real estate is the winning play – but it’s not, really.
The industrial way of looking at the world won’t exist in the metaverse, and whilst you may have a ‘shop’ on every corner in every virtual world, traffic will be attracted to the truly innovative and creative, rather than the convenient. The metaverse knows no true geographical boundaries, after all.
First step towards the metaverse is design strategy
The way to enter properly without wasted investments is to ensure you have a clear design strategy for the metaverse, and the business in general. What’s the objective of your brand’s presence in the metaverse? How does your brand intend to evolve overall? Where does your brand strategy fit in? What’s your integrated customer experience strategy for the next 10-plus years?
The design thinking methodology works perfectly for businesses conceptualising their strategy here, because like the metaverse itself, design thinking enables the creation of ideas that are boundless and decentralised. Design strategy then takes these ideas and censor checks them against financial viability, user desirability, and technical feasibility – leaving you with a clear directive.
Retailers need a clear understanding of their objectives, the kind of experience they want to deliver, what makes it memorable and then how it connects as a channel back to the remainder of their overarching business strategy. How will it be monetised? How do you transition people in and out, and then across your other channels seamlessly without eroding brand equity?
The dominant players will be the retailers who can recognise and embrace the importance of customer experience, design, and technology within the context of the metaverse. Ultimately, the most successful brands will always have creativity and innovation at their core.