In twelve short months, the word ‘metaverse’ has evolved from the plot point of a niche sci-fi novel to the world’s largest tech obsession. Enormous investments from industry leaders like Meta (formerly Facebook) and Microsoft have only added to the anticipation, and experts now agree it has the potential to revolutionise digital experiences.
As Mark Zuckerberg aims to launch key features of the metaverse in as little as five years, businesses worldwide must prepare now to harness the impact of these virtual networks on their industries. This is particularly important within retail—analysts predict that immersive new shopping experiences present a trillion-dollar revenue opportunity.
The rise of the metaverse seems somewhat similar to the dot-com boom: those who offer exceptional virtual experiences the earliest are likely to become first choice for consumers, and enjoy enduring success while competitors peter out. However, just as with any emerging technology, companies must prepare to tackle the early obstacles, complications, and legislative headaches first.
Meeting expectations
Over the past ten years or so, we’ve seen hyped interactive technologies like 3D TVs and Smart Glasses all struggle to become permanent fixtures of everyday life. Even the Nintendo Wii, which rose to be the sixth biggest-selling games console of all time through a promise of immersive, physical gameplay, largely saw players return to sedentary button-mashing in classic ‘couch/controller’ fashion.
The metaverse is likely to be different – perhaps even ‘too big to fail’, due to levels of investment and publicity. But for retailers to be successful within it, they must create virtual experiences that go beyond gimmicks, and truly add value to people’s lives.
Unlimited possibilities
Perhaps the most thrilling aspect of the metaverse for retailers is the potential for transformative customer experiences. Customers could buy digital items and real estate for use exclusively in the metaverse, or virtually browse products before ordering them.
Shopping experiences no longer need to be the same for everyone, either. A retailer could create a ‘perfect’ personalised store for each individual customer – featuring their favourite colour schemes, background music, brands, products, sizes, and more – and secure higher conversion rates as a result. In fact, early versions of this feature already exist, with Meta’s Discovery Commerce online ad tool created to “anticipate customer needs and match products with the people most likely to love them.
All early indicators show virtual retail works well. Forever 21’s personalised stores and Ralph Lauren’s popular clothing lines have both opened on gaming platform Roblox to high customer demand. Meanwhile, the success of video-powered e-commerce has proven that shopping experiences can be engaging, even from afar. Customers no longer need to be segmented, or limited, by their physical location, but rather their interests and needs.
As with all e-commerce, personalising experiences in the metaverse will require the application of data. Every customer interaction will provide valuable intelligence about their interests, wants, and needs, and retailers must be ready to capture, analyse, and action this information.
Building the foundations
The technological infrastructure required to underpin customer experiences in the metaverse involves an advanced customer data platform (CDP). CDPs will need to be able to leverage existing data, such as previous purchases and sizes captured from a customer’s e-commerce history, and aggregate this with new insights from the metaverse.
However, this data may at first require deeper analysis than usual, as retailers consider whether users will act differently in the metaverse to how they would in real life. Much like characters in the metaverse-themed novel Ready Player One (2011), the anonymity afforded by virtual worlds might lead to customers adapting their online personalities and purchasing items that don’t reflect their interests in physical stores. Experiences should be tailored accordingly, and decisions made from the abundance of data should account for this added layer of complexity.
The exciting universality of the metaverse also raises questions around competition, specifically across retailers, brands, and platforms. How do retailers maintain a consistent customer experience in a marketplace model when every brand operates differently within the metaverse? How do you encourage platforms to work together so that shoppers can bring their metaverse goods from one space to another? The answer is likely to be new forms of cooperation.
Rules and regulations
While the metaverse and its virtual worlds represent a brand-new frontier, modern lawmakers may draw on experiences and lessons learned from the internet when considering how it should be legislated. Consequently, retailers must take care when using and storing customer information, as the metaverse promises to spawn strict new data protection laws. Businesses should also be ready for a more stringent online duty of care, plus updated regulations around trading and ownership of both physical and virtual items.
Meta has recognised that new metaverse rules “in the areas of privacy and e-commerce… may delay or impede the development of our products and services” in its 2021 annual report. The worry here is that strict rules end up curbing the quality of customers’ experiences on the metaverse compared to their expectations. For instance, a consumer may expect to be able to shop without worrying about international retail rules, but regional regulations are likely to still apply.
Regardless of these complexities, retailers will still be able to craft exceptional metaverse shopping experiences. They simply require the proper expertise, talent, and foundations to maximise potential opportunities—and mitigate the challenges ahead.
