Brace yourselves: the metaverse is here. What started out as a term from a 1990s science fiction novel is now a market expected to be worth $800 billion by 2024. And it has the potential to transform commerce as we know it. Brands are already scrambling to stake their claim in this new digital world.
What will commerce in the metaverse look like and how can brands prepare for this potentially revolutionary change? We’ve got some ideas.
From healthcare to manufacturing to retail, digital-first initiatives are transforming every industry. As a result, the edges that used to separate the digital and physical worlds are getting hazy. As parts of the workforce become increasingly remote, employees spend hours per day on Zoom and Slack. In effect, these virtual spaces are becoming a “work metaverse.”
Digital work has allowed for flexibility, safety, instant collaboration, and more geographic equality in the workforce. Last year, Americans spent an average of 1,300 hours connecting with each other on social media. Children were able to play games online when they couldn’t in-person. With the rise of the metaverse, physical and digital worlds will become much more intertwined. The future is phygital.
Perhaps the most obvious use case for commerce in the metaverse is the digitization of fashion. Many brands already feature VR shopping experiences, like virtual fitting rooms, to increase conversions and decrease returns. Digital skins — the virtual clothing, accessories, and cosmetic add-ons for avatars in online games — rake in an estimated $40 billion per year.
As digital fashion expands beyond gaming, this is likely how the masses will first dip their toes into the metaverse. Whether you wear t-shirts and jeans or couture, clothing items translate easily into virtual goods. And your avatar is going to need clothes, too. People want to express themselves everywhere — including the metaverse. Users will want to personalize their digital identity, and adorning their avatars with unique virtual clothing is where it will start.
Both mass market entities and luxury brands have already shown up to the party fashionably early. Last year, youth retailer Pacsun entered the metaverse by leveraging the Roblox platform to reach Gen Z customers. The clothing brand now sells digital items in the Roblox Avatar Marketplace. Pacsun also recently partnered with game development studio MELON to create social experiences and mini games.
The high-fashion market is also stirring up hype for the metaverse. Decentraland, a 3D virtual world, will host the first Metaverse Fashion Week later this month with virtual shows, stores, and events. Fashion apparel is one of the largest sectors in the world. As clothing brands move into the metaverse, they’ll bring a throng of consumers with them.
The metaverse isn’t just a place where retailers and brands can sell digital versions of merchandise. It’s a way to create immersive experiences that drive engagement and supplement physical products. Brands are already exploring how VR shopping experiences can shape the future of commerce.
At the end of the month, Acura will become the first automaker to open a virtual showroom in the metaverse. Fans will be able to explore the new Integra model, play a racing game, and browse a new apparel collection designed by artist Wannerstedt. The metaverse is ripe with new opportunities for brands to gamify, personalize, and make shopping experiences more memorable for consumers.
A whopping 80% of consumers say that the experience a brand provides is just as important as its products. As the metaverse takes hold, brands will need to deliver the new experiences consumers are looking for. The key is to think outside the box — brands that stay ahead will find new ways to express their value propositions in a digital format.
The metaverse won’t just be a place to shop from the comfort of home via VR headsets and computer screens. Retailers will also bring the metaverse to customers at brick-and-mortar locations. Innovative brands are already testing the waters with in-store augmented reality, NFT exhibitions, and more.
The metaverse is still in its infancy. Brands breaking into this new space will need to adopt a test-and-learn mindset. Shoe and apparel brand Toms, known for donating a pair of shoes for every pair purchased, uses in-store virtual reality to connect customers with their company values. Through VR and a 360-degree film, visitors are transported to Peru where they can participate in a “virtual giving trip.”
The key to a winning metaverse strategy will be to innovate and dream up new ways of engaging customers to build deeper, long-lasting relationships and deliver extra customer value. Brands that tap into the metaverse to foster community and put customers at the center of it all will win big.