Why are retailers interested in the metaverse?
A growing number of brands are expressing an interest in the metaverse. Last month, Walmart’s trademark applications showed that the company is preparing to create its own NFTs and cryptocurrency and would start selling virtual electronics, toys, appliances and home decor. In fact, a real estate metaverse seller is planning to build a virtual mall. Retail brands are now viewing the metaverse as having a real potential to change how consumers interact with their products and stores and up their marketing game. According to research, 77.24 percent of shoppers stop at just ‘add to cart and end up buying nothing. The immersive nature of the metaverse is crucial to how this experience can be improved. Better shopping experience Virtual showrooms and stores have come a long way since 2016, when the first virtual store was launched by eBay. Virtual stores are not only convenient and time-saving for consumers, but they decrease returns for sellers and can help expand the customer base. Customers can discover products faster and the personalisation for each user will be far greater than in physical stores. Online shopping lacks the visualisation and engagement that the metaverse can offer. A lot of the features are tailor-made for retail companies. Customers can explore different features and try out different models while the time spends in stores (a sales metric) also naturally increases. The immersive experience gives customers an opportunity to try out products and integrate them into their homes before they buy them. IKEA has launched an AR catalogue app that allows shoppers to see what a lamp would look like in their room before they decide to buy it. A study conducted by Obsess titled ‘Metaverse Mindset: Consumer Shopping Insights’ showed that 70 percent of the consumers who visited a virtual store ended up buying an item. Attracts young customer base Gen Z is very familiar with the virtual experience, making the metaverse a good fit for young consumers. The survey found that 40 percent of Gen-Z and 40 percent of millennials, who made up one-third of the total respondents, want to buy virtual products. Retailers now understand that going where consumers are is a better option than trying to bring in customers to physical stores. Besides, virtual connectivity everywhere has grown. A study conducted by Snap and Deloitte found that by 2025 nearly 75 percent of the world population on social apps will be using AR. Innovative marketing Fashion brands led the retail industry’s foray into the metaverse. Brands like Nike, Gucci, Louis Vuitton, Tommy Hilfiger and Forever 21 all have had metaverse-based marketing campaigns. There are a few who have invested heavily in the windfall from selling on the metaverse. Nike has submitted a bunch of patent applications, including one for a Metaverse Studio, launching Nikeland on Roblox and buying a virtual fashion startup RTFKT that creates virtual shoes and collectables. Luxury brands like Balenciaga plan to establish a metaverse unit aside from having developed a video game for a new collection and partnering with Fortnite on virtual clothing. In this segment, Gucci is far ahead. The company sold a Roblox handbag for more than USD 4,000 and a video that was sold as a NFT on Christie’s for USD 25,000. Samsung launched its own metaverse on Decentraland, a platform built on the Ethereum blockchain to showcase its products. Offering a virtual experience of their New York store, the platform sold NFTs worth USD 71.8 million in one week. The brand is now selling its smart TVs along with a NFT Platform app for buyers to explore and trade in digital art. Nascent metaverse and gaming platforms already have a retail constituent as they are marketplaces that already sell NFTs. NFTs themselves are another major aspect of the metaverse that retailers don’t want to lose out on. Just like Samsung, brands can easily use NFTs to enhance a user’s shopping experience. They can be used as receipts or as a special entry pass for product launches to gain attention or can be used to make new digital products. In other words, brands can innovate multiple ways to generate revenue using NFTs. But the change isn’t just flowing in one direction. A week after Facebook’s rebranding to Meta, the company announced that it was planning to open physical stores to showcase its virtual reality headsets. Experts say that the metaverse will not necessarily mean the death of physical stores. Instead, the two could end up in a symbiotic relationship.
NFTs themselves are another major aspect of the metaverse that retailers don’t want to lose out on.
NFTs themselves are another major aspect of the metaverse that retailers don’t want to lose out on. NFTs themselves are another major aspect of the metaverse that retailers don’t want to lose out on.
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Poulomi is a Technology Journalist with Analytics India Magazine. Her fascination with tech and eagerness to dive into new areas led her to the dynamic world of AI and data analytics.