For retailers, customer loyalty is perhaps their number-one priority. It helps to secure long-term sales and word-of-mouth promotion: nearly 9 in 10 loyal customers will recommend a brand to friends and family, while almost half would continue to purchase even after a poor experience.
But today, loyalty is moving beyond repeat physical purchases. Customers are increasingly investing in online rewards, virtual tokens, and even digital products. Far from just a fad, these items will form the foundations of retail in the “metaverse” and should be progressively incorporated into customer journeys to develop loyalty in this exciting new era of commerce.
Moving to the metaverse
Out of seemingly nowhere, meta-mania has begun to grip the business world. Facebook’s parent company changed its name to Meta to widespread media attention. Meanwhile, Microsoft bet big on a gaming-oriented metaverse proposition with a $68.7 billion acquisition of Activision Blizzard, in addition to its workplace-focused Teams platform.
In practice, the technologies that underpin the metaverse – VR, video calls, and more – have been in circulation for years. But advancements in connectivity, plus a pandemic-fuelled uptake of online channels and digital services, mean that tech firms believe consumers are now ready to embrace virtual ways of living, working, and playing.
We’ve seen proof of this within retail. As virtual storefronts and products are increasingly employed alongside real-life shopping, a recent study has found that 70% of consumers who visited a virtual store made a purchase. And the types of items that people are buying online are changing, too.
Digital products and NFTs
Recent years have seen a boom in the popularity of digital products, from blockchain-validated NFTs being sold by Selfridges, to Balenciaga releasing a collection of outfits on Fortnite. Purchases of physical products can also be paired with digital products, as Adidas has shown with its recent collection.
While this may appear to be a bubble to some, the underlying shift is here to stay. This change will be driven by younger generations: nearly 75% of Gen Z shoppers have bought a digital product within a video game experience.
Previously, criticism has been levelled at gaming companies for encouraging young players towards microtransactions and purchases of ‘loot boxes’. But as countries like the UK tighten rules around in-game purchases, and legal experts shift their focus to regulations around virtual ownership, metaverse users can expect a safer, more rewarding shopping experience that they want to return to again and again.
Why spend money on virtual products?
Ultimately, buying digital items, like video-game skins, NFTs, or crypto, comes down to trust. Customers purchasing virtual products must believe that a company or virtual environment will have value in the long term, whether that be social capital with their friends or resale value. In this sense, they might as well be buying stock in the company – these purchases are an investment in the company’s future, based on the belief that this future will be bright.
Customers will increasingly expect the products sold in virtual stores to be exclusive to them, too. As we have seen with celebrities buying their own unique Bored Ape Yacht Club NFTs, exclusivity – afforded by distributed ledger technology (DLT) – is a driver of demand and value. More than that, the communities that develop around NFTs add a new dimension to loyalty, where a shared faith and vested interest in these brands exist in extended realities.
Some might be sceptical of buying ‘non-fungible’ digital items in this way, as NFTs could ostensibly be duplicated without recourse. But the same concept has existed for centuries within the physical art industry: many of us buy prints of world-renowned paintings to hang in our homes, but we know it’s not the same as owning the original piece. As more consumers accept this notion within the metaverse, demand for digital product exclusivity will grow.
Encouraging adoption
The metaverse and its exciting benefits aren’t solely for rich collectors or tech-savvy shoppers, however. All kinds of customers want to have the choice and ability to purchase unique items. For years, Nike has enabled its customers to order custom footwear, while McDonald’s has invited co-creation by recently featuring a “hacks menu” of loyal fans’ favourite custom meal combinations. The metaverse will build on this trend.
Even so, not everyone will be an early adopter. Some will need to be eased into these new shopping trends. One method of introducing customers to digital tokens and other virtual products is through rewards schemes; certain behaviours, such as buying products or writing reviews, can be celebrated through tokenised rewards and other metaverse perks. This way, the metaverse can be introduced by way of existing loyalty services which customers are already comfortable with.
We saw this with the release of ‘Spider-Man: No Way Home’ in 2021. US theatre chain AMC offered 86,000 Spider-Man NFTs to movie ticket-buying members of its ‘Stubs’ loyalty programme, on top of their existing benefits. The venture proved a huge success both virtually and physically: AMC CEO Adam Aron tweeted that “all NFTs were fully committed” just hours after tickets went on sale, while claiming “our Spider-Man NFT is a key reason why No Way Home generated the second-highest one-day ticket sales in AMC’s entire history.”
Maintaining loyalty within the metaverse
Online retailers are well experienced in creating loyalty programmes and studying visitor activity to enhance customer interactions. But with retail in the metaverse set to produce an unparalleled level of customer data, businesses must reconfigure their customer data platforms (CDPs) to ensure they can save, study, and safeguard new volumes of information.
Once their CDP is upgraded to work within the metaverse, businesses can monitor multichannel activity, assess which users engage with their digital experiences, and gain immediate feedback on customer behaviour. Then, these retailers can adapt their virtual retail offerings faster and even personalise them to each visitor, resulting in a next-gen level of customer loyalty.
However, successful metaverse loyalty strategies aren’t built in a day. First, retailers need to prepare the right IT foundations, and ensure that any solutions they propose can be realistically put into practice. Then, once these structures and processes are set, they can begin to offer outstanding virtual loyalty programmes, bolstered by VR experiences, exclusive tokens, and similar rewards.
