The metaverse could significantly impact how we shop, creating new opportunities for traditional retailers, wholesale businesses, and consumer product manufacturers. Retailers can enrich their customer experience, provide personalized recommendations, create virtual store formats, access a wider audience, and build strong influencer collaborations in the metaverse. Though the metaverse is still in development, brands have the perfect opportunity to think about how it will shape the customer journey and create the right technology to stay ahead of the curve. A retail strategy in the metaverse must reflect a brand’s mission, test products and store layouts, and have a seamless omnichannel approach. This blog dives into how the metaverse will impact retail, tips for building a metaverse strategy, and the benefits the platform can provide.
How will the metaverse impact the retail industry?
Increased engagement and immersion
The metaverse creates a stimulating, engaging, and immersive virtual world where brands and retailers can connect with audiences and showcase their products and services. Retailers can interact with audiences through unique brand experiences like games, competitions, events, and virtual product explorations or virtual try-on offerings. Current 2D shopping experiences do not provide this level of immersion, and consumers prefer visiting physical stores to experience products. However, with the metaverse, this ‘experience gap’ is bridged. With 81% of consumers researching a product online before purchase, as analyzed by GE Capital Retail Bank, the metaverse can provide new ways to engage with products to encourage sales. While metaverse retail experiences don’t aim to reduce physical store sales, an approach that embraces digital and physical experiences in harmony will help the brand unlock success in the future.
Retailers in the metaverse can collect richer data on consumer demographics, behavior, and preferences, which can help create relevant experiences for audiences. The available data will allow for tailoring retail experiences, product recommendations, and targeted marketing. For a new visitor, metaverse stores can display popular product lines for a customer to grasp a brand’s offering. For returning customers, virtual store shelves could display products previously engaged with or new products that could interest them.
New store formats and layouts
Retailers are using the metaverse to build digital twins of physical stores, experimenting with new store formats and launching shopping events that can be accessed through virtual reality (VR) headsets, smartphones, tablets, or desktops. These digital showrooms and stores are packed with engaging and interactive elements that lead consumers to spend more time within the space than in traditional online stores. Metaverse users spend an average of 14 minutes in virtual showrooms compared to 2 minutes in 2D stores based on data collected by Emperia.
Access to a broader audience
Retailers need to go where consumers are, and with the metaverse’s rapidly growing user base, the platform creates an additional touchpoint to engage with more consumers. EY’s Future Consumer Index revealed that 10% of consumers are already engaging with the metaverse, and two-thirds of consumers are excited to transition daily activities into the metaverse, as reported in a study by McKinsey.
Collaborations with brands and influencers
Retailers can collaborate with prominent influencers in the metaverse to increase brand awareness and drive sales. Audiences make purchases based on recommendations of influencers trusted in a particular space. Retailers can also build strategic partnerships with brands that align with their mission to access new communities and consumers. For instance, Adidas partnered with Coinbase and The Sandbox to gain a strong foothold in the metaverse.
How retailers are adopting the metaverse?
Building stores and showrooms
With new ways to display products and drive sales, retailers are encouraged to build virtual stores offering higher engagement and immersion levels. Alo Yoga, an activewear retailer, created a storefront on Roblox featuring calming background music and yoga wear displays. The wellness-focused retailer even introduced a new model of ‘earning’ clothes, rather than purchasing them, by engaging in five days of meditation.
Hosting virtual events and experiences
The metaverse is an excellent platform for retailers to create new experiences and host branded events, creating new ways for consumers to discover products. Nike, the leading sports brand, forayed into the metaverse with its Nikeland activation. The experience invited audiences to watch sporting events, play games, and be among the selected few to be introduced to new apparel launches, available for purchase as digital wearables and physical items. Since its launch, Nikeland has been visited more than 21 million times as of 2022.
Creating virtual influencers and avatars
Popular retailers like Prada and Puma are creating their own computer-generated avatars to build strong connections with audiences. Prada created ‘Candy,’ a digital avatar, as an ambassador of their fragrance collection. Puma, on the other hand, built ‘Maya,’ an influencer that could represent the brand in South East Asia to promote their Future Rider Sneakers. The sports retailer had high control in building Maya’s story to ensure it resonated with the South Asian community.
Partnering with virtual marketplaces
Marketplaces on Roblox and Fortnite are excellent for displaying brand products like digital wearables for avatars, reaching new customers, and generating revenue from avatar purchases. Fashion retailer, Forever 21 partnered with Roblox to launch Forever 21 Shop City, which offered a range of virtual avatar accessories and clothes. Through this activation, the brand aimed to broaden its consumer engagement tactics and make its products accessible to wider audiences.
What is a metaverse strategy in retail?
If you’re looking to launch your retail brand in the metaverse, your strategy must be built by taking the following aspects into account:
Reflect your brand's values and mission
Your brand activation in the metaverse must reflect your identity and vision and uniquely offer insight into the brand narrative. Retailers that offer to tell a brand’s story meaningfully through immersive and memorable experiences will garner a loyal user base. Alo Yoga, the activewear brand we spoke about earlier, not only increased engagement by encouraging users to complete yoga sessions to earn rewards, but they used the activation to take a firm stand on their mission of prioritizing wellness.
Leverage data collected in the metaverse
User data in the metaverse will be far more detailed and specific, unlocking opportunities to create personalized experiences. Customers will have more control over their data and can opt into data sharing with particular brands, and those who do will expect to be offered relevant experiences. A majority of brands, however, are still not fully leveraging data for personalization, according to the Drum’s 2022 Consumer Survey. Retailers in the metaverse must understand and track user activity, behavior, and traffic to identify bestselling products, improve positioning, and increase conversions.
Test new products and services
Retailers can experiment with product offerings by launching refined versions of existing products or new product ideas in the metaverse. This tactic is cost-effective and allows retailers to gauge audience behavior and affinity for the product before launching it as a physical item. Forever 21 launched the F21 Metaverse Collection based on virtual product testing in Roblox. The physical store collection features several items from the virtual store, including the best-selling item in the metaverse, the Forever Beanie.
Test store layouts
Using digital twins of physical stores can help retailers test a store’s layout and merchandising. Analyzing data like dwell time, areas interacted with, products engaged with, and purchases made will help optimize the retail experience for consumers by creating better layouts, displays, and product placements in the store.
Develop a comprehensive omnichannel strategy
Metaverse strategies must integrate with other digital touchpoints, like social media, email marketing, and search advertising, to create a seamless shopping experience. However, creating a cohesive experience across digital and physical channels is also crucial to success. According to Google’s research, 86% of European and US sales growth will be driven by multichannel and marketplace formats in the next five years.
Benefits of the metaverse for retailers
Differentiate from competitors: Using metaverse can be an excellent strategy for retailers who want to stand out by amplifying their brand story and positioning. Retail brands can be innovative and creative in the metaverse to gain attention from consumers with abundant retail brand choices.
Better customer insights: Retailers can gain deeper insights into consumer preferences and behavior since metaverse users represent themselves through personalized avatars. These insights can guide brands to design better virtual stores, improve products and services, drive customer loyalty, and improve their e-commerce strategy.
Access to a global audience: The metaverse’s lack of geographical restrictions gives retailers access to audiences worldwide. The platform also helps brands reach specific niche audiences and sub-communities that populate the platform. Younger audiences are a primary cohort on the platform, and by targeting particular metaverses, like Roblox, which has two-thirds of its users under 16, brands can effectively position themselves among them.
New revenue streams: In the metaverse, avatars are a digital extension of oneself, making users want to look their best by dressing appropriately. Retailers have an opportunity to generate revenue by offering digital clothes and accessories that users can personalize their avatars with. For instance, Balenciaga partnered with Fortnite to create virtual luxury merchandise for in-game avatars.
The metaverse is not here to replace physical shopping experiences but to bridge the gap between physical and digital touchpoints to create a seamless user journey. Retailers that leverage the metaverse can benefit by differentiating themselves, gaining better customer insights, tapping into new revenue streams, and reaching a broader audience. The metaverse’s impact on the retail industry will be driven by the ability to create immersive, personalized, innovative shopping experiences. Retailers like Nike, Forever 21, and Prada are already adopting metaverse strategies to build virtual showrooms, host events, create virtual avatars and collaborate with metaverse marketplaces to elevate their e-commerce strategies. While the metaverse may not be for everyone, those who enter the space must do so with a well-planned roadmap that engages with their target customer.
Are you looking to launch an immersive retail experience in the metaverse? We can help you build, scale, and monetize your idea in the metaverse. Get in touch with us!