The metaverse has become one of the most talked-about things in technology. It’s much-hyped, but potentially with good reason: assorted metaverses (there are more than just Facebook’s) will present a new mechanism for engaging with consumers across multiple activities – from gaming, entertainment and retail to contact center agent engagement.
According to Bloomberg Intelligence, the market opportunity for the metaverse could be worth as much as $800 billion by 2024. JPMorgan has called the metaverse a trillion-dollar yearly revenue opportunity, noting that around $54 billion in virtual goods is sold every year. Which is more than twice the amount spent annually on buying music.
Changing customer expectations means that companies are always looking for new ways to enhance CX: 67% of customers say that their standard for good CX is higher than ever before. A strong metaverse presence could enable retailers to meet these changing expectations. According to Gartner research in early 2022, 25% of users will spend at least one hour a day in the metaverse by 2026, whether for work, shopping, education, social activities or entertainment.
Gartner further forecasts that 30% of companies will have metaverse-ready products and services by 2026. Which presents the question: what will retail CX look like in the metaverse?
Ways retail will manifest in the metaverse
The metaverse is a virtual environment built on a blockchain architecture. It offers a virtual reality (VR) experience that recreates “lifelike” interactions using 3D avatars and renditions of physical surroundings. Most metaverse activity and engagement up to this point has focused on social gaming. More than 60% of Fortnite users play at least six hours per week, and a further 30% play 11 hours or more per week.
Currently, retailers are just experimenting in the metaverse. It’s an awareness-generation exercise to drive initial engagement and loyalty and to try and establish what customers want. Luxury brands including Burberry, Dolce & Gabbana, Hermes and Gucci are using NFTs (non-fungible tokens) to generate interest in their metaverse. This might be a sensible place to start since Gartner has reported that as of February 2022, 93% of consumers have either never heard of the metaverse or don’t understand it. It’s also worth noting that NFTs will play a much more significant role in the metaverse than is often reported in the mainstream: NFTs are online assets that have verifiable scarcity and ownership that cannot be manipulated, so they become assets with value in the digital realm. In short, they become things companies can sell.
What might be next for retailers in the metaverse? Real estate and how they present it will be a key part of the offering. “At a basic level, retailers could create simple storefronts that mirror their retail stores in the physical world. Or, if retailers find that customers want a more immersive and interactive experience, there might be whole malls involved, effectively virtual retail shopping parks that defy the laws of physics and give retailers CX possibilities they’ve never considered before,” says Jonas Wallengren, Principal Business Consultant CX & EX at Orange Business Services.
Early examples include Decentraland, an Ethereum-based VR blockchain platform in which virtual visitors can use tokens to buy virtual real estate, goods and services. It recently hosted the first metaverse fashion week, featuring over 60 brands, artists and designers. Decentraland already hosts stores for brands like Samsung and Sotheby’s, which built a duplicate of its London Galleries inside the platform. Further, in 2021, Boson Protocol, a decentralized commerce platform, bought real estate in Decentraland for $704,000 on which to build a virtual mall.
Retail’s next essential line
The metaverse presents retailers with a new channel that will bridge online shopping and brick-and-mortar experiences. Through virtual CX, companies can show you products and services and give you more personal experiences in doing so: as Mark Zuckerberg has commented, “A lot of the metaverse experience is going to be around being able to teleport from one experience to another, so being able to basically have your digital goods and your inventory and bring them from place to place, that’s going to be a big investment that people make.”
Use cases that will leverage metaverse technology to offer something new include virtual goods and NFTs. This case seems proven already, with 20% of Roblox users changing their outfits daily. It’s entirely feasible to see shoppers using VR and AR to try on watches, sunglasses, shoes, makeup, clothing and more, and then have the physical item shipped to them in the real world. “Phygital” (a combination of physical and digital) shopping will go mainstream, as digital enhances physical shopping using things like digital mirrors in physical stores and CX that uses AR for an enhanced experience. Examples include the Nike and Snapchat virtual experience of running through a city.
Addressing an evolving audience
“Consumers, and indeed users in general, are in a state of constant technological learning and adjustment. And just as Gen Y and Gen Z have become the dominant demographics in the workforce, so too they will in the consumer space over time. And that means retail companies will need to tailor experiences to an increasingly tech-savvy and virtual-familiar base,” says Wallengren.
According to the recent The Metaverse Mindset: Consumer Shopping Insights report, almost 75% of Gen Z consumers have purchased a digital item from inside a videogame, and 60% think brands should sell products on metaverse platforms. A further 54% of Gen Z shoppers believe people should be able to shop anywhere they go online, and 45% want to see metaverse environments that are essentially online shopping malls.
But while the metaverse could present retailers with a world of possibilities, it is also important to remember what it is not: it isn’t a standalone cure-all for customer engagement but rather another string to your bow. It’s another channel via which to engage customers, albeit one that presents more opportunity for ongoing, emotion-based interactions.
It should form part of your omnichannel CX strategy and be an adjunct to, not a replacement for, your existing CX activities and channels. And with research such as Forrester’s prediction that consumers will choose brands that deliver happiness and comfort in 2022, the experiences that brands offer will be as important as the products or services in their portfolio. Metaverse presence and next-level CX will be a significant part of that.
I’ve been writing about technology for around 15 years and today focus mainly on all things telecoms - next generation networks, mobile, cloud computing and plenty more. For Futurity Media I am based in the Asia-Pacific region and keep a close eye on all things tech happening in that exciting part of the world.