For the metaverse to be more than a gimmick, retailers will need to get creative and harness the power of communities and creators.
After COVID-19 necessitated shopping practices to change, people are more willing to try something new. For retail brands, this moment is a chance to experiment with the metaverse. Not merely as a gimmick, but a real opportunity to enrich the customer experience. Like the behaviours of the modern consumer, the metaverse is transforming. It’s opening new avenues for additional profits and brand enhancement beyond the physical retail store. As the metaverse continues to evolve rapidly, it’s critical that retailers establish a strategy, outline an audience and build communities that enable creators.
The two-pronged retail metaverse strategy: creativity and currency
Being successful in the metaverse as a retail company requires an in-depth strategy. It should focus on points of interaction and engagement, including transactions. Moreover, a winning strategy necessitates creativity. Recall that the metaverse is unbound by real-world physics and logistical limitations – meaning that businesses can remove the four walls of a store. By making personalised environments immersive and fun to explore, companies can speak directly to each individual customer. Smaller retail stores, usually limited by square footage, can create a virtual marketplace. This can be infinitely larger than the shop, accommodating vastly more customers.
The transactional side of a retailer’s metaverse strategy could also involve non-fungible tokens (NFTs) and cryptocurrencies. Likewise, businesses must consider what shoppers are spending virtually and what comes back to them in the real world. Businesses should understand how to manage or converge revenue streams.
There are two kinds of commerce:
- vCommerce (virtual), where people buy goods and services in the metaverse; and
- eCommerce, where the things purchased on a digital webpage get physically delivered to the consumer.
Finding an audience and building communities in the metaverse
After establishing a metaverse strategy, it is pivotal to determine an audience and build communities around them. For some retail brands, finding an audience might not be a problem, as their current demographic transfers easily to the metaverse. Other brands that don’t cater to the young male gamer archetype will have a more challenging time outlining an audience. Nevertheless, fostering and nurturing communities in the metaverse will pay dividends.
The metaverse will reflect gaming in many ways, namely communities. In the early 2000s, World of Warcraft was the gold standard for online communities for millions of players. Even today, gaming is a virtual and real-world activity where users develop friendships going beyond the game itself. Moreover, gaming overlaps with the metaverse. More than 2.7 billion people play games, many of which use communication channels such as Discord, Twitch and Medium for community engagement. For communities to flourish, retailers, like in gaming, will need to organically gather their customers around shared interests and give them control. One business doing community quite well is GitHub, which permits users in its open-source environment to mint NFTs in real-time.
The new creator economy and recognising limitations
The metaverse is kicking off the web 3.0 and the creator’s economy. Inevitably communities of consumers will form around them and the digital assets and content they create. Retail brands should invest in content creation as another revenue stream.
Roblox lets users build and design unique worlds and share with others. These worlds can get monetised. Another is Decentraland, an entire 3D virtual world owned by users. People can create virtual structures like theme parks or galleries and charge users to visit them via Ethereum blockchain technology. For retail, these interactions between content creators and communities will most likely manifest. It will allow users to leverage historical catalogues, digitise past collections and purchase in-game wearables or skins for real money.
Despite all the noise and excitement of communities and creators, retail brands shouldn’t buy into the hype. Not without understanding where the metaverse is and where it is going. Currently, the metaverse of today lacks interoperability between virtual worlds – a consumer can’t take their avatar from Second Life to Decentraland.
Conventional advertisements won’t work in the metaverse. Until the measurement and tracking technology catches up, retailers will need to gather metrics through more out-of-the-box methods. For now, companies can be creative and use engagement as the main KPI.
Get in early and establish a digital presence
Retailers must get inside the metaverse early to begin playing and learning quickly. Likewise, retailers need to continuously invest in a strong digital presence that will eventually be easily recognisable to customers. Above all, businesses must be willing to adopt new mindsets – and by bending the real world and the digital world into this new virtual world, brands can establish robust communities fueled by eager creators. It’s time now to make sense of new audiences and behaviours, and experiment with new worlds, integrations and games, paired up with a consistent business and experience strategy.
Erica Moreti is head of strategy and innovation and physical experience for EPAM Continuum.