The Metaverse: Retail’s New Revenue Stream

Pro Tip: With the metaverse set to disrupt the retail industry, brands and retailers cannot delay in creating innovative strategies for both virtual and physical products to delight consumers — no matter where those transactions take place, whether in the digital realm, IRL or somewhere in between. In a recent article, Retail Leader Pro has laid out the foundation of how retailers should think about defining the metaverse. Here, we delve into the various possibilities that the metaverse offers for retailers as an emerging commerce channel ripe for innovative ideas. Do Retailers Really Need to be in the Metaverse? By 2026, 25% of people will spend at least 1 hour a day in the metaverse for work, shopping, education, social and/or entertainment, according to Gartner Inc. Globally, by 2026 ReportLinker believes the metaverse market will reach $758.6 billion — offering a sizable chunk of consumer attention up for grabs for retailers and brands. So far, the metaverse has already sparked the development of many new kinds of products, services and experiences. These create huge opportunities for retailers to boost sales, strengthen customer and employee loyalty, and expand into new markets, says Lori Zumwinkle, Accenture’s senior managing director and North America retail lead. More and more retailers are recognizing the immense potential offered by the metaverse, too. For instance, Accenture’s Technology Vision research revealed that 72% of retail executives believe the metaverse will have a positive impact on their organizations, while 45% believe it will be breakthrough or transformational. And plenty of retailers have already started experimenting with expanded virtual offerings and/or a metaverse presence. For example: Gucci sold a digital handbag for more than its real-world counterpart. Beauty brand Charlotte Tilbury has added a video chat feature to its virtual store, so friends can share virtual shopping experiences. Gap has launched a collection of non-fungible tokens (NFTs) – and consumers who buy enough NFTs receive real sweatshirts. More than 50 top brands recently took part in the first metaverse fashion week. Wayfair, Crate & Barrel, Target and Macy’s use the metaverse to let customers preview what furniture will look like in their homes. It’s clear that the metaverse is set to have a big impact on the retail industry, and that transformation is already underway. Adoption is high, and it’s rising further. For instance, Accenture’s research found that 64% of consumers have already purchased a virtual product or participated in a virtual experience or service in the previous year. And that number is expected to climb, as 83% of consumers are interested in making transactions via the metaverse. “The bottom line is that retailers that haven’t yet entered the metaverse need to move fast, or risk falling behind their competitors,” Zumwinkle says. Tyler Moebius, SmartMedia Technologies’ CEO, doesn’t believe it’s essential for every retailer to dive headfirst into a metaverse activation right now, but a time is coming in the not too distant future when having a metaverse presence will be as critical to a businesses’ success as having a website is today. “With so much of consumer purchasing today being done through online, in these early stages of metaverse development, there’s a real opportunity for retailers to engage consumers in a completely new medium and test a number of creative responses to their target audience,” Moebius says. “The success that major retail brands, such as Nike and Gucci, have found within the space speaks for itself in this respect, and I think every retailer should be actively exploring how they could benefit from these potential new revenue streams both now and in the near future.” Merchandise in the Metaverse Many brands that initially looked at the metaverse space as a new marketing channel to showcase their products and services, albeit in an immersive virtual way, are increasingly catching on to the fact that digital goods (such as those used to adorn users’ avatars) contain intrinsic value for which consumers are willing to pay. “We’ve worked on many brand campaigns over the last couple of years where there’s a significant crossover between the physical and digital realms,” SmartTechnologies’ Moebius says. “One of the most popular methods we’re creating for our clients is delivering their consumers interactive, gamified digital experiences that incentivize certain behavior, e.g., consuming content, sharing content with a friend, learning about the USP of a product, by rewarding consumers with a unique, trackable non-fungible voucher that can be redeemed in real life (IRL).” SmartTechnologies has seen this technology successfully used to deliver engaged consumers trackable discount codes for use in physical retail stores, as virtual concert tickets and even to give away free Ben & Jerry’s ice cream. “These activations are giving our clients next-level insight into their consumers’ behavior by collecting unique first-party data about their consumers in a very equitable manner, because these consumers are being immediately rewarded with items they want for their participation in campaigns,” Moebuis says. With the metaverse currently offering crypto transactions, selling virtual goods and NFTs has been an obvious revenue stream. But virtual stores often serve as an actual point of sale, allowing for direct checkout and video interaction with sales reps. Another interesting point is the contribution of virtual stores to actual in-store purchases. “A lot of the product discovery, pre-store visit is being conducted via brands’ virtual stores, with these presenting a more detailed, more realistic view of the product,” says Olga Dogadkina, Emperia’s CEO. It’s also fun for consumers to own something IRL and in digital format, adds Rob Crumpler, IZEA’s head of blockchain, NFTs and the metaverse. “We’re seeing real products and NFTs combined to enhance the purchasing experience and give the consumer a life-long memory of the products they’ve purchased,” he says. The metaverse is built on NFTs, which simply means that everything consumers see in the metaverse is unique. “What’s cool about NFTs beyond their uniqueness is the utility they can provide,” Crumpler says. “When you buy an NFT from a retail brand, they can ‘drop’ promotional incentives to your wallet. These incentives are typically VIP-style experiences where you get first access to new products, special discounts, and free access to special events, such as store openings or sponsored events.”

Do Retailers Really Need to be in the Metaverse?

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Do Retailers Really Need to be in the Metaverse?

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