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For many consumers, the metaverse is a vaguely futuristic concept, perhaps just now catching their attention. However, retailers can’t afford not to be excited about the metaverse. This new world is coming quickly and will be here by the holiday shopping season. Retailers need to know that laggards may not fare well in 2022 — and realize that the time to prepare for a virtual future is now.
Successful brands have a vibrant presence in both the real world and online. The metaverse is just the next extension to that presence. Virtual reality allows retailers to allow customers to interact with their brand in an immersive environment that tells the brand’s story and sets it apart. Interactive 3D spaces that are richly designed and interactive encourage customers to stay longer than traditional websites and mobile apps.
Imagine the impact virtual spaces can make on holiday shoppers. It’s easy for online sales to be a big part of the year’s most popular shopping season.
The fashion industry was among the first to claim a claim in metaverse. Luxury brands invite customers to explore and participate in new virtual spaces:
- Gucci has promoted a virtual handbag on the popular and well-established gaming platform Roblox and sold it for $4,100, way above its physical price tag.
- Louis Vuitton created a virtual game to celebrate the founder’s 200th birthday, packed with trivia challenges, prizes and surprises meant to draw young customers.
- Dior Beauty created its own holiday virtual store, highlighting gift options and limited edition products in its Atelier of Dreams.
“Marketers, store designers, merchandisers and more will have to begin thinking very differently about what a ‘store’ is,” Maghan McDowell writes in Vogue Business. “In a world that offers every experience, why would we use our industrial-era retail model as a template?” Maghan McDowell writes in Vogue Business.
The metaverse market is still young but data analysis gives a clear indication of its future. Calling it “the next big technology platform,” Bloomberg reports that the metaverse market is on track to approach $800 billion in 2024. That represents a compound annual growth rate (CAGR) of more than 13%, compared to a market of less than $500 billion in 2020.
At the moment, gaming hardware, software, services and in-game ad revenues are the primary revenue generators in the metaverse, projected to reach $413 billion in 2024, up from $275 billion in 2020. Online game developers who take advantage of the opportunity to create virtual worlds in their games (remember Gucci or Louis Vuitton?) could be able to earn a larger share of future gaming sales. The metaverse market will almost triple the size of the current gaming market.
And looking ten years ahead, a February 2022 Credit Suisse report predicts that “even modest metaverse usage” could drive the CAGR for internet traffic an additional 37% over the current 30% rate — multiplying current data usage 20 times over.
At the user level, consumers have been found to spend more than 14 minutes, immersed in 3D virtual shopping experiences, in contrast to less than two minutes on static 2D ecommerce sites. That boost in customer engagement translates to a 70% increase in conversion rates — and retailers offering a virtual shopping environment like a metaverse have seen ROIs grow by 450%.
Aside from this benefit, retailers that use today’s advanced virtual-reality technology can access data analytics based upon user interactions in metaverse. This can be used to optimize product placement. Marketers can use virtual reality technology to determine the most popular products and analyze traffic. This is a great way to increase customer engagement, brand loyalty, and ultimately sales.
Spread the brand story
Virtual experiences are not limited like physical retail spaces. Virtual experiences aren’t limited by location, construction costs, inconvenient times, or inconvenient locations. Even the most extraordinary visions of the metaverse can be vividly brought to life by retailers and made available to consumers.
It’s also possible to manage 3D virtual reality stores with software-as-a-service (SaaS) solutions that give retailers full control, without requiring technological expertise. After establishing a strong presence in metaverse, brands are able to update their product offerings, store decor, and narratives quickly and easily. It allows brands to link virtual stores to other channels such as physical stores or websites. This is crucial in order to ensure that the brand story is consistent across all channels. This creates an omnichannel approach. Integration with existing ecommerce systems can be made possible to integrate virtual stores, which will facilitate inventory management and direct checkouts.
The metaverse is a place where customers can leave behind their daily reality and connect with brands on an emotional level.
What’s still to come
According to Cassandra Napoli, senior strategist at WGSN Insights, it may take a while for the metaverse to fundamentally change how we learn and work. Still, there are many “entrance points” that retailers should be thinking about now, she says: “Brands must begin to wrap their heads around these immersive virtual spaces and plan their corporate metaverse strategy or run the risk of falling behind.”
The Robin Report neatly sums up the significance of the metaverse, predicting that it will become “a new way to experience the internet,” and represent “an opportunity for any brand ready to meet customers where they are-whether in this world, or one that has not yet been created.”
Olga Dogadkina, founder and CEO of Emperia .
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