What does the metaverse mean for retail?

With a serious amount of hype, and investment from some of the biggest names in tech, everything is pointing towards the radical change on the horizon that is the metaverse. But what is the metaverse, and what does it mean for retail?

What is the metaverse?

The metaverse is a virtual universe. It is a culmination of different innovations, including 5G, 3D, artificial intelligence, virtual reality, blockchain, cryptocurrency, cloud computing and social commerce. Such technologies make the possibility of creating a 3D virtual world realistic.

Facebook CEO, Mark Zuckerberg has outlined his vision for the future of the company, directing the focus to the metaverse, calling it the “next frontier”. Zuckerberg announced the company is rebranding as Meta in October 2021.

Boundaries between physical and virtual worlds are already blurred for many. What is the point of a physical book library when you can access the same thing virtually, or purchasing a physical copy of a game when it can be bought online?

Entering the metaverse

As technology continues to evolve, so does consumer behaviour. The concept of the metaverse is fresh, but virtual connectivity in ecommerce is a well-established concept amongst consumer habits. Increasingly, retail brands have utilised virtual reality devices, creating digital experiences for consumers. 100 million consumers shop with augmented reality online and in stores, published Snap and Deloitte. Snap and Deloitte also predict that by 2025, almost 75% of the global population, and nearly all social media users will be frequent augmented reality users.

Augmented reality allows consumers to visualise and experiment with products before committing to a purchase, which has been a game changer already for many ecommerce shops. Despite this adoption, a wider embrace of virtual reality is required to fully immerse in the metaverse, however this channel is increasingly noted as a natural route forward.

Currently, there are different separate and nascent metaverses owned by companies including Roblox, Tokens.com and Epic Games. There has been a race by brands to create virtual worlds and host ideas of what the metaverse could be, and many retail brands are diving straight in, taking small steps towards the metaverse already.

Nike was one of the first to invest in the metaverse, premiering NIKELAND on Roblox, a gaming platform reaching over 47 million daily users worldwide. NIKELAND allows players to dress their avatar in Nike gear and play in a virtual world where there are no rules.

Gucci has also purchased land on The Sandbox, a virtual world built on the Ethereum blockchain, officially entering the metaverse. Gucci will revamp its Gucci Vault to accommodate the virtual world, turning it into an interactive experience.

Roblox also hosted a virtual Gucci Garden, echoing real life locations, where for two weeks, avatars could enter to buy and discover limited edition avatar items from Gucci’s Roblox collection. A virtual Gucci bag was resold for £2,900 worth of Roblox currency, worth more than the £4.20 it was originally sold for, and more than the physical equivalent.

Fast fashion retailer, Pretty Little Thing has also entered the metaverse, bringing the first virtual model to their website, bridging the gap between real life and fashion.

The creation of the metaverse will allow retail brands to step away from what they know retail as now. Brands can break free from physical stores, and even the best digital shopping experiences that exist today.

Imagine a world where you can receive fashion or beauty advice from a personal advisor that you have pulled from the metaverse into your living room. The metaverse would mean people can access a world where anything really is possible, so why would people stick to retail as we know it.

It is not a case of waiting for when or if the metaverse becomes a fully interconnected and immersive experience. Millions of people log into the metaverse daily, demonstrating a whole market and revenue stream ready to be tapped into. Those who are slow to progress will be stuck in the virtual world. Consumers are already used to mixed reality experiences, the metaverse doesn’t seem so fanciful, and the next generation of ecommerce is certainly emerging.

The future

There is no doubt that the involvement of big technology companies and the rebranding of Facebook are key indicators of the radical change on the horizon.

Is the metaverse a trend that will soon pass, or is it the next big shift that will take the industry by storm?  Lots needs to happen for a truly consumer centric metaverse to exist, as opposed to one dominated by technology giants.