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“Metaverse:” It was a concept from a classic science fiction novel and now it’s a buzzword for tech companies, marketers, and futurists — but what exactly is the metaverse, and how should retailers approach it? While there are varying explanations for what it actually means, Accenture describes it as an “evolution of the internet that enables a user to move beyond ‘browsing’ to ‘inhabiting’ in a persistent, shared experience that spans the spectrum of our real world to the entirely virtual and in-between.” Your business becomes an always-on journey that shoppers can engage with in bigger and more immersive ways that can truly expand the customer experience.
Deloitte describes it as encompassing both “fully digital environments and digital enhancements to our physical world.” This level of opportunity allows entrepreneurs of all types to build upon existing brand experiences and create entirely new ones all at once. With this in mind, it’s estimated that the metaverse could create $5 trillion in impact by 2030. It’s vital to long-term planning to understand how brands and consumers are starting to engage in this new space.
The metaverse versus virtual reality
The metaverse may require similar technology and be a virtual world, but it’s important to note that they are technically not the same thing. To start, the metaverse is composed of a network of interconnected virtual worlds. Each world has it’s own unique rules and characteristics, and users can move freely between worlds as they choose. The metaverse also allows users to interact and collaborate with others and customize their environments in a way that’s rarely seen in virtual reality, which can often include exploring and interacting with a reality as it is.
The metaverse’s hyperfocus on community also allows users to meet and chat with others and purchase goods and services, blurring the lines between real life and digital life.
It’s also important to highlight how the metaverse differs from another reality: augmented. The difference between the metaverse and augmented reality is that the latter means the “physical and digital are seen and experienced simultaneously,” as described by Forbes. In the metaverse, the digital world replaces the physical in many ways.
Retail operations in the metaverse
Accessing the metaverse requires, at minimum, a digital device with internet connectivity. Depending on a consumer’s intent, they may need specialized hardware (3D screens, etc.) and software (programs, games, etc.), much like accessing virtual reality (VR) experiences. Because the metaverse isn’t owned by a single entity or corporation, there is currently no unified version of it. As a result, many companies are developing their own platforms, headsets, and other technologies to enter. Major companies include Meta, Apple, Amazon, The Sandbox, Roblox Corporation, Epic Games, Nvidia, and more. Aside from deciding on whether or not to join the metaverse, selecting which of the above providers to use is one of the biggest decisions for retailers.
Next to determining a metaverse platform is determining a retail shop location. Similar to how things operate in the actual world, location matters. In most cases, the location tends to matter a bit more, considering all of the options available to consumers, thanks to the lack of a physical commute.
In the metaverse, a store location is often called “land” while multiple locations are referred to as an “estate.” Land can vary in size depending on the platform. Via the Sandbox, for example, land is typically 96m long x 96m wide with a height of 128m and a price tag ranging from $2K on up. The higher-end land is usually in more visible areas, like near Snoop Dogg’s metaverse mansion, other celebrity locations, or other high-profile areas.
Benefits of retail in the metaverse
As the metaverse continues to evolve and expand, this creates an opportunity for your brand to explore different ways to grow, reach new customers, and find new ways to show up for frequent shoppers.
Marketing: Marketing is one of the most popular ways brands are engaging with the metaverse. From eye-catching billboards (potentially right next door to Snoop Dogg’s mansion) to large-scale activations, this new form of technology allows you to expand your reach like never before. Aside from a heavy focus on product placement, it also gives you room to take shoppers on an immersive experience to encourage further loyalty to your store and heightened engagement with your brand.
Product testing: If you’ve always wanted to experiment with new product offerings but didn’t want to invest a hefty sum to do it, the metaverse is the perfect place to start. The highly digital experience allows you to create entirely new products with ease or advanced versions of already available products to see what your customers are interested in and where they’re looking to go with your brand next.
Loyalty: Loyal customers will likely follow you anywhere. The most important thing you can do is make it count. Creating an undeniable incentive for engaging with your metaverse store front — like perks and discounts — can have many advantages. It gets customers to your store, and, depending on the world you create, it can work to keep them there. According to Retail Dive, “receiving an offer/discount/coupon on physical products from the brand” was the second-most important factor for customers to consider the metaverse behind data privacy.
Additional revenue streams: Moving around the metaverse often includes an avatar, and, because avatars function as a digital version or extension of a shopper, it’s natural for users to want to dress them up in a way that reflects themselves. Avatar accessories and apparel can be purchased in the metaverse, and, in some cases, there may even be a match to the item that can be purchased by shoppers in the real world. These items ultimately create additional revenue and business opportunities for your retail store.
Examples of retail in the Metaverse
Alo Yoga
Activewear brand Alo Yoga took the idea of wellness to the next level in their metaverse store. The immersive storefront powered by Roblox, called Alo Sanctuary, features calming sounds and yoga wear, but perhaps the biggest difference between the physical store and the immersive store is that some clothes can be earned instead of bought. Their black and white G.O.A.T jacket, which sells for $268 in stores, can be virtually earned in the metaverse by completing five days of meditation.
This model challenges the traditional method of shopping by using engagement as a means of currency instead of the typical cryptocurrency method in the metaverse. It also takes a literal stance on the brand’s mission by prioritizing wellness and creating a meaningful experiential moment for customers.
Gucci
Luxury retail brand Gucci was one of the first big brands to dabble in the world of the metaverse. The limited Gucci Vault Land powered by Sandbox showcased vintage Gucci pieces (not for resale) and gamified the experience by educating users about the company’s history and heritage. By playing the history games or interacting with vintage pieces, users earned blockchain-based tokens or rewards that could be used throughout the Sandblox platform.
This model is a bit different from others in that Gucci isn’t focused on actively selling in the metaverse, but instead educating audiences about their history and encouraging pride and engagement. This is helpful for reaching different audiences and emphasizing brand recognition.
Forever 21
Forever 21 has been experimenting with the metaverse for over a year, and, for the most part, it’s been a real success. From virtual avatar accessories to real-world shopping opportunities, the virtual storefront has been a useful way to bring about additional revenue and business opportunities. In December 2022, the brand celebrated it’s one-year anniversary by making its incredibly successful metaverse beanie a real-world item to be purchased online and in stores along with other metaverse-inspired items like hoodies and t-shirts.
In addition to creating additional revenue and business opportunities, this also enhances marketing opportunities for the metaverse store, driving more customer engagement and potentially encouraging more product testing for the brand.
Nike
Nike is perhaps one of the biggest brands staking a major claim into the metaverse. Nikeland, first announced in 2021, is one of the sportswear giant’s original ventures into the immersive space. It allows users to watch sporting events, play sports, and be the first to be introduced to new clothing items — some of which are available for purchase in real life and for users’ digital avatars. One of the more notable moments of Nikeland came during NBA All-Star Week when LeBron James paid a visit and participants were able to win rewards and unlock virtual products. As of 2022, Nikeland has been visited over 21 million times and, along with the company’s other digital ventures, contributes to 26% of the brand’s total revenue.
While Nike is currently investing in even larger metaverse ploys, including the launch of .Swoosh, a new metaverse marketplace platform, and buying the metaverse agency RTFKT, their efforts are proof of the endless possibilities available to your retail store in a virtually expansive world.
Despite its opportunities and overall potential, it’s important to note that the metaverse is still emerging. If it’s a leap your business might not be ready for, there are other ways to stand out to your customers and improve engagement. If you’re interested in experimenting with new products or offerings, talk to your customers and gauge their interests. Square Feedback is a great way to understand new things your customers would be open to. Analyzing customer data is another way. If there’s an uptick in customers shopping for hats, ideate ways you can take that product to the next level.
Once you’ve found a way to expand or build upon your brand, make sure you market it appropriately. Square Marketing has ways for you to engage with your customers via email or text so you can reach them whenever and however. Don’t forget to follow up with a loyalty program to reward faithful customers for their continued shopping.
