24 Mar 2023
A Metaverse is nothing but a virtual-reality space in which users can interact with a computer-generated environment as well as with other users. It is a digital universe housing virtual experiences and is potentially unlimited in the number of “worlds” it can create. It provides an immersive online space where we can have a representation of ourselves in 3D (known as avatars) who can walk around, explore, engage in conversations, and even make purchases. The Metaverse is accessible through a set of VR goggles connected to a computer. The metaverse is built on the internet and users can “live” in it instead of “browsing”. NFTs – Non Fungible Tokens are at the foundation of the metaverse economy which is nothing but a record of digital ownership stored in blockchain. On the metaverse, digital currency is used to purchase items.
Facebook founder, Mark Zuckerberg, is so convinced about Metaverse being the future of the Internet, that he has renamed the firm to Meta. There are now 50+ different providers of metaverse “worlds” and the most popular ones are The Sandbox, Decentraland, Voxels, Somnium Space and Meta’s own Horizon Worlds.
At The Sandbox, each plot is called a “land”, and has the dimensions of 96 m x 96 m (length and breadth) and a height of 128 m. Many “land”s grouped together would form an “estate”. The “land” prices vary considerably depending on the popularity of the area. The average price for one Sandbox land is around $2,300 currently.
A growing number of companies across industries – for example Adidas, Burberry, Gucci, Tommy Hilfiger, Nike, Samsung, Louis Vuitton, and even banks like HSBC and JP Morgan, are buying up space on the metaverse to set up shops there. Burberry is a British Luxury fashion brand famous for trench coats and has a partnership with Reliance Retail to operate stores in India. Microsoft has ventured into Metaverse in Microsoft Teams — the software giant’s online meetings platform. According to the latest reports, Microsoft will release Mesh for Microsoft Teams in 2022. The new service lets Teams users in different physical locations join collaboratively and have holographic experiences during virtual meetings.
Online shopping still lacks the visualization and engagement that the metaverse can offer. The basic premise for retailers is that a customer’s digital avatar can log into a metaverse shop from anywhere in the world and buy items which can be shipped. 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. This opens an exciting host of opportunities for luxury brands, retailers, and for consumers themselves. The future of retail on the metaverse would allow you to not just shop “with” your avatar but also shop “for” your avatar. By using personalized digital avatars, brands can access deeper real-time insights into customers’ preferences. Brands can use these insights to improve their services and build customer loyalty.
Across the world, the majority of shoppers stop at just ‘add’ items to cart and do not proceed to buy them. The immersive nature of the metaverse would help improve customer experience and in turn increases chances of conversions to actual purchases. Some eCommerce platforms have already started offering some of the AR and VR features as part of the retail metaverse.
Clothes, shoes and accessories form the major items being purchased online. Given this, retailers cannot ignore the prospect of Metaverse any more. In fact, some of the major brands have already started experimenting on Metaverse and are using it to learn and develop awareness, engagement, and loyalty. Notably, in 2021, 21% of the retail market used metaverse with US $9.807 Billion in annual revenues.
Technology driving Metaverse will take at least a decade to become mainstream. Given below are some of the challenges which need to be addressed in order to increase adoption –
According to Gartner prediction, by 2026, 15% of people will spend at least an hour a day on the metaverse. In the USA the average monthly number of searches on the metaverse is 480,000. Bloomberg Intelligence estimates that the metaverse market will reach nearly $800 billion by 2024. Brands such as Shopify and Contentstack have named metaverse as one of the top eCommerce trends in 2022. It is therefore imperative that retail players explore the metaverse and prepare to adopt it for digital asset creation. As metaverse technology evolves and more retailers establish a presence, businesses that seamlessly blend the best of both worlds – physical and virtual – and deliver cutting edge consumer experiences would only succeed. Companies would need to constantly adapt by rethinking the way they build their technology platforms to support and shape superior customer experience on the Metaverse.