Why these experts believe the metaverse is still relevant

As traditional bricks-and-mortar stores face new challenges and e-commerce continues to grow, retailers are looking for innovative ways to reach consumers and provide engaging shopping experiences.  The metaverse has promised a new frontier for retailers to create virtual storefronts, showcase products, and engage with customers in ways that were previously impossible.  But with one of the biggest proponents of the technology, Facebook, recently scaling back its investment in the metav

metaverse, could the trend already be over before it ever really began?  

Still in development

According to Saskia Fairfull, founder of Metarial, the emergence of the metaverse is still developing. She feels that the technology surrounding the metaverse, typically referred to as Web 3.0, is relevant to how the retail industry is evolving.

“The rise of Web 3.0 technology brings blockchain, non-fungible tokens (NFTs), and metaverse to the forefront. One of the first industries to align with Web 3.0 in all three areas is retail,” she told Inside Retail.

She went on to say that some early adopters in apparel are leveraging blockchain for supply chain management and transparency, NFTs for digital collectibles, or digital twins, of products as well as authenticating luxury items.

The technology is also making an impact on 3D, interactive online worlds, such as Roblox, Decentraland, and The Sandbox.  

“As metaverse platforms continue to grow, the opportunity for retail is huge as it incorporates social interactivity, shopping (digital and physical), the ability to trade, and participate in creating assets,” she added.

Dissecting the hyperbole

Fairfull acknowledged that while there has been a lot of hype around the metaverse and Web 3.0 technology, the conversation in recent months has become more negative with the volatility of cryptocurrencies, the NFT market and many Web 3.0 disasters. 

“This could be a sign of growing pains as Web 3.0 technology becomes more readily integrated and understood how it can be utilised,” she opined.

However, she feels that there is no denying that metaverse and Web 3.0 technology presents an entirely new way of interacting online, consumer experiences and a shift toward a democratised and traceable future.  

From her perspective, some standout examples in this space include Nikeland on Roblox, a branded world with different zones to explore, play to earn in-game tokens and buy Nike digital apparel from the Nikeland store. 

Another one is the creative agency RTFKT, which was acquired by Nike and released a collection of NFT sneakers named Cryptokicks.  

Other notable examples include Gucci Garden, a virtual world where visitors can play mini-games, sit in a cafe and purchase digital products from the Gucci Garden virtual shop. 

Burberry also has jumped on the bandwagon by teaming up with blockchain-based game Blankos Block Party to create an NFT collection featuring in-game accessories and a Burberry character. 

Not to be outdone, Adidas will debut its Virtual Gear digital fashion collection as part of the recent Metaverse Fashion Week 2023 organised by Decentraland. 

Existing Virtual Gear NFT holders will receive a 3D replica of their digital fashion item to wear within Decentraland’s virtual world.

Challenges and opportunities

Fairfull feels that some of the challenges retailers face when adopting Web 3.0 technology are understanding if it’s right for their business and audience and whether their Web 3.0 strategy aligns with the company as a whole.

She feels it all boils down to the investment to build out, execute and manage a Web 3.0 strategy, as well as the company’s overall commitment to digital transformation.  

“While some retailers are launching NFT collections to be part of the hype cycle, others have recognised Web 3.0 and metaverse as an opportunity to ramp up their digital transformation efforts,” she stated.

This is a move to ensure they appeal to younger generations and prolong their heritage brand for years to come.  

Over the next few years, she expects retailers to incorporate Web 3.0 technology into their loyalty and rewards programs to provide greater personalisation as well as community driven experiences both online and in real life.

“As retailers become more familiar with the benefits of Web 3.0 technology, there will be an increase in metaverse activity through immersive shopping,” she speculated.

Innovation matters

Nike’s transformation of the first level of its  House of Innovation store in New York City into an augmented reality version of Nikeland in Roblox offers a glimpse of what this kind of immersive shopping could look like. 

Appealing to kids, the activation encouraged youth to visit the physical store and experience the branded Roblox world through a smart device.

Fairfull believes that forward thinking brands are connecting physical products and digital experiences through NFTs and near-field communication (NFC) technology or QR codes.  

“Consumers are interacting with brands in digital games, social media, multi-brand marketplaces, augmented reality filters, pop-up shops, pre-loved marketplaces, op-shops, apps, and online advertising to name a few,” she noted.

The risks

As always, being a very new technology and application, there are many unknowns associated with the metaverse.

According to Fairfull, early concerns are around copyright infringement. One example was the lawsuit between NFT collection MetaBirkins founder Mason Rothschild and luxury fashion house Hermes.   

“The legal matter came to a close in favour of  Hermès, calling for Rothschild to pay damages of $133,000 to the luxury fashion house,” she said. There was a similar lawsuit against StockX by Nike for selling Nike branded NFTs. 

There is definitely something to be said about raising awareness of the fine line between a brand’s design IP and another business releasing digital assets which are heavily inspired by those products. 

“Additionally, there are concerns related to safe and inclusive spaces in the metaverse.  Interactive virtual communities need to ensure there are methods for visitors to report or block inappropriate behaviour and bullying,” she stressed.

Obviously, the metaverse and Web 3.0 technology are susceptible to cyber attacks and hackers. Fairfull said this is a very real and present risk given the state of technology and recent cyber attacks impacting millions of people and their personal information.

What’s next?

According to Anne Paris, research manager at IDC Retail Insights, 3D interactions that help customers make better choices and ultimately derive more satisfaction from brand relationships are only going to increase in the future. 

She said one way that retailers are moving closer to the promises of metaverse hype is in building digital twins of their retail operations. 

“Made up of data threads from computer vision, the internet of things, and real-time customer and employee data, a digital twin will give retailers the ability to see what’s actually happening in stores—from customer behaviour to inventory to employee effectiveness,” she told Inside Retail.

According to her, these digital twins will have a 3D visualisation component that is very similar to what we tend to imagine when we hear the word metaverse. 

She also mentioned that land grabs within the metaverse will become built-out retail environments where emerging brands will quickly iterate new products and designs, where the most popular and successful ones could eventually be produced as physical products.

“Already, brands such as Clinique and Pinko are creating and issuing NFTs for product launches and loyalty programs. Dermalogica used 3D-rendering technology to replicate in-store experiences on their website,” she said.

Walmart has also used augmented reality combined with AI and machine learning to allow online shoppers to try on clothing. She feels that more brands and retailers will partner to create digital content and experiences, across all retail channels.

“By 2024, 65 per cent of retailers will invest in visual commerce to enable personalisation through 3D product configuration and virtual try-on and reduce complexity through image-based interfaces,” she speculated.

Ultimately, for most retailers, Paris feels there is no rush to enter the metaverse, but there is urgency to put the tools in place that digitise the in-store experience and allow for interactive, 3D experiences with customers. 

“Retailers would be wise to build out the infrastructure they need to handle the real-time data streams and AI decision-making that will make metaverse retail possible,” she concluded.