When I first heard someone casually use the word metaverse this year, I furrowed my brow and thought, what the hell is that?
So I furiously Googled what the word meant, and I was left even more confused. Is the metaverse some type of game? The newest installment of The Matrix? I essentially shrugged it off as just another technology gimmick.
But I wondered if my initial flippant disregard of the metaverse was akin to people’s uncertainty and hesitation of the internet and online shopping 30 years ago (In 1996, Time Magazine hilariously wrote, “Remote shopping, while entirely feasible, will certainly flop. It has no chance of success.”)? At the time, people couldn’t imagine what the internet would look like or how it would function. And to me, that feels a lot like this new metaverse conversation.
All the experts say that the metaverse is the next big thing. Matthew Ball, a venture capitalist who writes about the metaverse, describes it as “a sort of successor state to the mobile internet.” And Forbes predicts that the metaverse will revolutionize how we think of culture, shopping, and entertainment. So it must be worth our consideration, right?
If you need a little help understanding what the metaverse actually is and what it means for ecommerce, keep reading. Because if you’re a retailer who prioritizes agility, the metaverse should be on your radar.
What is The Metaverse?
First coined by Neal Stephenson in his 1992 novel Snow Crash, the metaverse described a digital world inhabited by avatars representing real people. More recently, the metaverse rose to popularity last fall when Facebook’s Mark Zuckerberg revealed that Facebook changed its name to Meta and explained that new virtual technology was on the horizon.
Facebook’s involvement with the metaverse is likely, in part, a strategic effort to win back millennial and Gen Z consumers who lean on digital technology but lost touch with the social platform. But the metaverse is much more than just a millennial marketing scheme.
The metaverse is a digital universe, accessible with a virtual headset, where people can create, buy, and sell goods as avatars that represent their physical being. In the metaverse, users can interact with other avatars and purchase digital products, like representations of real world items and non-fungible tokens (NFTs).
Sounds technologically advanced, right? Well, it is. The metaverse doesn’t exist yet—big players like Facebook and Microsoft are still building it. We can probably expect it to go live within our strategic planning horizon.
But that isn’t stopping companies from jumping on board. Heaps of businesses are getting involved early on, and prospects are looking good. According to Bloomberg Intelligence, the global metaverse revenue could approach $800 billion.
Retail in the Metaverse
So what does all this mean for retailers? There’s lots of good news for ecommerce.
- New opportunities to sell. The metaverse will provide a new commerce environment known as dcommerce, decentralized commerce, that invites more equitable commercial activity without megaretail monopolies.
To participate in dcommerce, retailers will need to adopt direct-to-avatar (D2A) strategies. Similar to the direct-to-consumer model, Consumer Goods explains that D2A “will allow brands to side-step supply chains and sell clothes that don’t exist in real life directly to the avatars themselves.” Essentially, consumers will be buying goods solely for their virtual existence, opening up lots of new commerce opportunities for retailers.
- Improved shopping experiences. We’re already beginning to see brands invest in virtual stores and malls: many beauty brands are currently testing rudimentary versions of virtual retail stores that allow consumers to browse aisles and sample products from their desktops.
But in the metaverse, virtual stores and malls will be far more immersive. Consumers will be able to visit stores as their avatars to try on apparel and accessories in 3D. This way, they can vet products before buying them in real life, which presents a unique opportunity to reunite in-store and online commerce.
If you’ve been sleeping on the metaverse, it’s time to wake up because there’s a whole new world of opportunity waiting right around the corner. Contact Sophelle today to get up-to-date on the latest retail innovations.
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