Engaging Consumers With Interactive Digital Experiences

Retailers are amplifying entertainment in their virtual worlds by adding an element of fun and gamification that couldn’t exist (at least not at the same level) in their physical stores, and are dramatically increasing both engagement and the bottom-line with their online assets. 

“What initially was viewed as a ‘marketing campaign’ is now quickly becoming an online strategy, where virtual stores are permanent and serve as flagship stores,” says Olga Dogakina, CEO of Emperia, a tech company that creates virtual spaces for brands and retailers.

NFTs: A Point of Entry into the Metaverse

The metaverse is built on non-fungible tokens, or NFTs, which simply means that everything seen in the metaverse is unique.

When mapping trends within the metaverse space, use of NFT technology is growing to re-create a sense of physical ownership within digital spaces. 

“The sense of tangible ownership you get when picking up something as simple and commonplace as a Bic pen in your day-to-day life IRL [In real life]  is one of the key feelings we want to replicate in digital spaces to make them feel more ‘real,’ and NFTs provide an opportunity to create a solution,” says Tyler Moebius, SmartMedia Technologies’ CEO.

Many retailers and brands engage in NFT-based campaigns as a means of soft-onboarding themselves into the Web3/metaverse space. 

“One of the great benefits for retailers working in this space is that they can start off in one area, such as NFTs, and then easily grow into another adjacent space, such as the metaverse, thanks to the interconnectivity at the heart of the technology,” Moebius says.  

Much like with online and physical stores, Moebius is also seeing that brands are now adopting a two-tier strategy to the metaverse: 

• First, retailers are syndicating their content/products with popular metaverses, similarly to how brands have historically sold their products both via online marketplaces and physical retail stores.
• Second, brands are increasingly developing their own dedicated metaverse space in a manner akin to how retailers operate their own e-commerce websites or physical stores. 

“What we’re seeing is that those brands, who were early thought leaders in the Web3/NFT spaces, are now building out their own metaverse strategy to expand their sales in this space,” Moebius explains.

Emerging Platforms

As with any new technology, the industry is seeing many metaverse platforms enter the market, each with their own unique take on building a sustainable platform. Prominent metaverse platforms include:

• Decentraland — As a first-mover launching in early 2020, and their impressive list of collaborations with brands, such as Coca Cola, Samsung and Dolce & Gabbana, is a testament to the platform's ability to showcase and generate revenue for its clients in a highly successful manner.
• Highstreet — While many metaverse platforms employ their own toolsets to create content, Highstreet allows budding developers to create add-ons for the platform using the wildly popular (and widely available) Unity engine, a 3D development tool that’s used extensively in both universities and the videogame industry. The inclusion of Unity support seems likely to vastly increase the amount and quality of user-generated content, as developers skilled with Unity will be eager to show off their pre-existing skills in this new market. “Highstreet employs a ‘play to earn’ mechanic, a popular new trend in the Web3 space where users can undertake specific tasks to earn digital goods and rewards,” Moebius explains. “This innovative mechanic is often being used in collaboration with brands looking to engage their consumers with a new USP [unique selling proposition] that's both highly interactive and mutually beneficial.” 

• Roblox— Right now, Roblox has the audience, but Roblox isn’t technicallyWeb3 yet, so the consumer experience can be limited. The popular platform lacks clear distinctions from other video games and also Web3 tools. 

“I think the exciting platforms still emerging will offer true Web3 experiences, such as the Sandbox, Decentraland and the Otherside, which is sponsored by the Bored Ape Yacht Club,” IZEA’s Crumpler explains. “These are the platforms retailers should be focused on to build lasting consumer experiences and amplify the voice of their brand through metaverse ambassadors.”

What about Meta?

Meta has consistently dominated conversation around the metaverse since Facebook made its industry-shaking announcement in October 2021 that it was changing its name to Meta. Many have been quick to mock the seemingly slow pace of updates received since then, but their recent rollout of Meta Horizons in Spain and France is a great step in the right direction, SmartMedia Technologies’ Moebius says.

“We’ve seen a lot of memes about the graphics of Horizons circling online since the announcements, but in my mind prioritizing solid performance and maximum accessibility with existing consumer hardware over eye-catching graphics is key to making the kind of wide-scale adoption Meta is looking for feasible,” he explains. “When Meta released the Quest VR headset, its affordable price point drastically increased the size of the VR market, and frequent reductions to the price of the unit have further accelerated consumer adoption, resulting in nearly 15 million units being sold. Meta now has a huge potential audience to use, promote and play-test Horizons, giving them a significant advantage over competitors in the field, albeit at the expense of graphical fidelity, thanks to the Quest VR’s limited processing power resulting from its low price point.” 

Ultimately, Meta’s focus on dominating the hardware market for the metaverse makes them a key player for retailers to watch. 

“Personally, I believe a great user experience that consistently creates positive memories for users can be much more powerful than good graphics alone,” Moebius says. “The recent fierce financial and social backlash against video game releases like Cyberpunk 2077, which were perceived to have prioritized flashy graphics over core UX, has definitely strengthened this belief within me.” 

Emperia’s Dogadkina agrees that Meta is a player to watch. 

“Facebook used to heavily promote Oculus and later on Meta Quest as an exclusive way to use virtual spaces, which has always been an entry barrier to users, due to price point and comfort,” she says. “This will probably change with time, maybe with the use of other hardware or more flexibility around devices, which will make the technology more accessible. One big advantage Meta holds is the ability to collect and analyze data, which Emperia sees as crucial, in order to make virtual retail spaces into an actual bottom-line contributor, and this is where Meta would have the upper hand when it comes to dominating this future market.”

Emerging Trends to Watch

While metaverse platforms become more sophisticated, emerging technologies will influence consumer behavior in the digital realm.

Accenture Technology Vision research identified four key trends evolving within the metaverse:

1. WebMe — Putting the Me in Metaverse: Since the pandemic, consumers have become accustomed to living virtually and the metaverse is a natural extension of that. It enables companies to transform customer experiences and relationships, expand their addressable markets and create new revenue streams.
2. Programmable World — Our planet, personalized: This is about technologies like 5G, AR and smart materials being woven through physical environments in increasingly sophisticated ways. This enables an unprecedented level of control, automation and personalization in the physical world.
3. The Unreal — Making Synthetic, Authentic: Consumers are increasingly encountering machines that in many ways resemble humans. While most are designed for good, some bad actors are using these technologies for malicious purposes, e.g., deepfakes and bots. This is forcing companies to question what’s real, what isn’t, and if the line between those two really matters.
4. Computing the Impossible — New Machines, New Possibilities: A new class of machines is pushing the limits of what’s computationally possible. This is blurring the lines between industries, and challenging companies to solve society’s greatest challenges.

The Future of the Metaverse

The metaverse will significantly disrupt the retail industry, and those in the industry predict its uptake will be much faster and more widespread than most people expect.

“For example, there’s a common assumption that the metaverse will only appeal to younger consumers,” says Lori Zumwinkle, Accenture’s senior managing director and North America retail lead. “It’s true that consumer appetites in this demographic are particularly strong. For instance, our Technology Vision research found that around 60% of millennials are eager to buy real-life products in virtual worlds, but other demographics are excited about the metaverse, too. For instance, a third of baby boomers are interested in using augmented and virtual reality to consult with experts on topics, such as health and DIY.”

The idea that people need expensive VR headsets to enter the metaverse is another myth to debunk. Plenty of metaverse experiences can be accessed from a smartphone or tablet, so the barriers to adoption are extremely low.

Additionally, more than half of consumers say they have bought or are interested in virtual clothes or accessories for an avatar, Accenture found.

In the long term, Emperia’s Dogakina says the metaverse could possibly replace the traditional e-commerce website. “The future of the metaverse is only limited by our imagination and what experiences we can create,” she says.

IZEA’s Crumpler predicts that one day moms will meet up in the metaverse and hyperspace their avatars together from store to store, group-buying NFTs and getting discounts on their back-to-school shopping. A few hours later, everything they purchased will land at their front door, possibly delivered by a drone, he says. 

In short, increased engagement and greater experimentation from retailers will abound. 

“It's clear from the giant uptake in Web3 technology by brands and retailers that the metaverse is not going away,” Smart Technologies' Moebius says. “Those retailers, who invest now, will naturally gain a first-mover advantage that sets them up for future success. It’s increasingly possible that traditional 2D web developers will start evolving or maybe even be replaced by 3D developers, most of whom currently reside in the video game industry, as consumers seek out more engaging and interactive digital experiences. We expect to see increasingly immersive, interactive and awe-inspiring metaverse projects in the near future as brands seek to differentiate themselves in what will become a crowded space very quickly.