The metaverse in retail: A game-changer that’s not ready yet
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An opinion on metaverse from the perspective of a tech executive (and nerd) experienced in working with retail companies and the tech that will drive the metaverse.
Will the metaverse dramatically change the way we shop? Probably yes, but the technology driving this will take at least a decade to become even close to mainstream. Still, retail companies can start preparing for it by rethinking the way they build their technology stacks and how they shape their customer journey.
As a nerd, I can’t wait for the immersive experience like the one depicted in the movie/novel Ready Player One about a metaverse called the OASIS, which can be entered with a VR headset, body suit and gloves. In Ready Player One, the metaverse functions as a global virtual society where people are able to do whatever they want, to travel to any place, and be whoever they want. Shopping in such a universe would be the natural evolution of shopping.
How much time do we have to prepare for the metaverse shopping experience? This requires an answer to the question: how far away is today’s technology?
MetaBeat will bring together metaverse thought leaders to give guidance on how metaverse technology will transform the way all industries communicate and do business on October 3-4 in San Francisco, CA.
Over the past 25 years, I have watched and experienced the evolution of VR technology. In this article, I will share my observations and predictions.
The metaverse hype
It is not easy to stay up to date with news and predictions about the metaverse and on the other hand to feed the FOMO. Since Facebook’s rebranding to Meta and Mark Zuckerberg’s speech in October 2021, this topic has been widely commented on. In the U.S. alone, the average monthly number of searches on the metaverse is 480,000. The keyword “metaverse” also led the Retail Insight Network’s list of the top five terms tweeted on retail technology in the first quarter of 2022.
The metaverse is expected to grow rapidly. Gartner predicts that by 2026, 15% of people will spend at least an hour a day in the metaverse. Immersive VR technology will change the way we do business, study, socialize and pay bills. A new era is coming for sure, but in my opinion not as fast as it might seem.
Bloomberg Intelligenceestimates the metaverse market will reach nearly $800 billion by 2024.
“We believe the metaverse will be the biggest opportunity for modern business since the creation of the internet,” Meta stated. Naturally, the metaverse has caught the attention of business leaders. According to an Accenture study, 71% of executives surveyed say the metaverse will be good for business and 42% say it will be a “breakthrough” or “transformational.” For businesses, the metaverse can be a new way to engage their customers and add a “physical touch” to the showcases of online products and services.
Retail brands blazing a trail
So let’s focus strictly on retail. Earlier this year, brands such as Shopify and Contentstack named metaverse as one of the top ecommerce trends in 2022. And in April, the CEO of Meta announced that Meta will test selling virtual goods in the metaverse. Is the trend already hitting the market?
First, retail and luxury goods brands have already launched their projects in the metaverse environment. For example, in Nikeland, a micro-metaverse space built on the Roblox platform, Nike allowed users to try virtual products when playing games.
Another example of the retail-games cooperation is Balenciaga, which created a virtual store in the Fortnite game. The virtual store replicated the physical brand’s stores.
Nonfungible tokens, or NFTs, are records of digital ownership stored in blockchain, and are at the foundation of the metaverse economy. NFTs are the certificate of authenticity for digital copyrights. Owning NFTs is a value for consumers seeking originality and authenticity; they are also a business and entertainment for connoisseurs and collectors.
Gucci responded to the growing popularity of nonfungible tokens, launching an NFT project called “New Tokyo” and another one called “Gucci Grail” offering digital accessories including sneakers and bags along with wearable NFT. Also, this year Adidas offers NFT holders access to four exclusive physical products.
Future shopping in a real OASIS
Virtual reality, augmented reality, gamification and personalization — the metaverse contains all these elements. In an ideal metaverse, similar to the OASIS, there would be endless possibilities to create a new and exciting virtual shopping experience.
We could use our digital avatars to try on and buy clothes, get style recommendations from store assistants, interact with other shoppers and move from one metaverse to another. The devices would be comfortable and able to convey personalized facial expressions.
In the metaverse, people could interact with each other as they would in the real world, which can give a huge boost to social commerce. The main benefit of the metaverse is that it could make shopping more engaging and interactive.
That’s the vision. When it will become a reality, and whether it ever will, is unknown. That’s because the metaverse will not be fully effective in retail until it makes shopping better, faster and/or cheaper.
How far away is today’s technology?
To be clear, the metaverse is already here! You have gaming platforms like SteamVR, PlaystationVR or Meta´s own Horizon, to name a few. In all of these platforms, you can move around in a virtual world and buy things. It is early days and which one will end up being the Google Chrome of the VR space remains to be seen.
I am not even sure that the “metaverse” will be powered by Meta. This is because the technology to create a global working metaverse like the one in our dreams might not even be invented yet.
My experience with VR technology
The first time I tried a VR headset was in the U.S., back in the mid-90s. It was a big and clunky contraption that kind of looked like the light at the dentist’s office coming down from the ceiling. The resolution and frame rate were terrible. I think it was a 30-second demo and after that, I remember being kind of dizzy and unimpressed.
The next time I tested VR tech was in the early 2000s. At my university, we had a multimillion dollar VR setup that was used for traffic research. It even had full-size cars to put into the simulator and huge, 360-degree surrounding screens. I lasted about one minute in that VR simulator before my face turned green and I had to run out of it. The resolution was better, but the frame rate and response time were still terrible and unusable for anything other than research.
In 2016, I have 2 boys and Playstation VR was just released. The boys got the headset for Christmas and we used it a lot! The resolution was now OK, the response time was OK, and you could actually wear the headset for more than two minutes without throwing up. The headset was still big and clunky, and the controls were not very accurate.
This brings us to today. My oldest son became super interested in VR and a couple of years ago, he pulled the trigger on a big PC and a semi-pro VR headset. We used it quite a bit, but last summer, he sold the whole thing, and I totally understand why. The technology is not there yet … not even for a highly motivated nerd. It is just not good enough yet.
It has now been more than 25 years of development since I tried VR technology for the first time! The headsets are still too big, too heavy and not comfortable enough to wear over time. The resolution and responsiveness are still not good enough and VR-sickness is still a huge problem. This is not a mainstream technology that everyone will wear and use yet!
Are users ready?
CommerceNext’s new customer survey, which targeted respondents between the ages of 18 and 59, found that almost half of respondents (48%) had never heard the term “metaverse,” and only 5% considered themselves enthusiastic users of it. Nearly half of respondents (47%) are only vaguely familiar with the term and do not yet know how to use it.
It’s no surprise that the leader of the metaverse heyday will be Generation Z. A survey by Obsess found that nearly 75% of Generation Z shoppers have purchased a digital item within a video game, and that 60% of these young shoppers believe brands should sell their products on metaverse platforms. “Among Gen Zen who think brands should sell in the metaverse, 54% reasoned that people should be able to shop anywhere they go online, while 45% indicated that metaverse environments should be like online shopping malls.”
Preparing your retail company for the metaverse
The metaverse is still in an early stage of development and technology is not ready yet, so it is difficult to predict which channels and areas will be worth investing in. But if your company does not want to miss out on the opportunities this technology offers, it is crucial to start preparing and finding your place in this space. Roberto Hernandez from PwC wrote an interesting and useful article on this topic. I decided to add some tips from my experience and expertise as well.
Simplify the customer journey
Ecommerce executives should start today to improve the customer experience and strive to shorten the customer journey. Metaverse shopping is about new ways of presenting products and convenience in payment and delivery options. During the designing processes in CX, prioritize:
- simplicity at every stage of the customer journey
- user-friendly design
- personalization, localization and multiple languages on your ecommerce website
- frictionless purchasing experience.
Future-proof your tech stack with composable commerce
Composable commerce is becoming increasingly important and many enterprises are turning to architecture based on the principles of MACH (microservices, API-first, cloud-native and headless) to become more agile and future-proof.
According to a survey commissioned by the MACH Alliance, 79% of technical decision makers surveyed expressed a strong intention to increase MACH elements in their front-office architecture in the future.
MACH architecture is one of the most rapidly evolving software trends today. It opens up endless possibilities and opportunities to keep pace with changing technologies and markets. The flexibility of MACH software allows retailers to respond quickly, add new channels (like the metaverse), and stay competitive.
Embrace the growing amount of data
In the metaverse, the product data (the equivalent of the physical product, which we can also call digital twins) will stay mostly the same, only VR representations need to be added.
The immersive VR experience will be the next ecommerce channel to enrich the customer experience. It doesn’t sound complicated, nor should it be, but it’ll still be the new source of data. Therefore, companies should think about effective product information management to collect, manage and distribute a large amount of data.
Test, test, test
As long as the metaverse is in development, retailers can warm up and test low-risk cases that best fit their niche. Start with strategy. The first step for your retail business might be to start selling digital versions of physical goods, because omnichannel is also about connecting the brick-and-mortar experience with the digital one.
The next step is adding VR/AR features to your story, such as a 360° view or virtual tour, or even developing an app that makes it easier to try on the product (a great example is Sephora Virtual Artist). Feeling a little more confident yet? Try out NFTs.
A final thought
The metaverse will not reset the internet as we know it yet. Many customers and businesses will never find themselves using the metaverse.
However, simplifying and personalizing your customer journey, staying agile, making products and services more easily accessible are just great tips no matter what the future holds.
Morten Næss is an EVP of Technology at Bluestone PIM, a disruptive product information management (PIM) solution based on the MACH principles.
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