After writing the title, Will the metaverse radically change retail, I realized that I could change the word retail to tourism or education, or leisure, or culture, and so on to infinity and beyond. For this reason, and for the sake of economy of characters, I included everything in life.
Also value titling this post as “Metabranding, brands into the new universe and beyond” or “Staying human beyond the metaverse”.
But you’re not reading this post for me to tell you “the kitchen” of it, but to find out how the metaverse could radically change retail (and our lives). So here we go. The Internet is the new global society, will the metaverse be?
The virtual world could change the way we work, do business, interact and shop, all of which provides brands with a huge opportunity.
Will shared virtual spaces redefine how we shop and interact with people, brands and companies?
We are close to entering the metaverse mall and we wonder why does it matter?
The metaverse, it seems, is the next big thing. Will it be?
It has begun to look like a game. But we often discount innovations that, only in retrospect, turn out to be instruments of far-reaching technical, but above all social, changes.
Tomorrow’s shopping malls, as well as all that this encompasses, such as stores, are destined to be more social and a more interactive, original and immersive form of entertainment.
Virtual worlds now serve these functions more than ever, spurred at the time by the COVID-19 pandemic.
Instead of shopping through a specific brand’s website, imagine getting together with a group of friends in a Minecraft-like world to have a good time, shop at digital stores and share everything without leaving home or the office.
Although definitions vary, the metaverse generally refers to the idea of a persistent, shared virtual space, similar to a digital mirror of the real world, but without any of the restrictions.
The metaverse could become the collective, persistent and parallel, or extended, reality created by stitching together all the virtual worlds to form a universe, or several, that we can traverse seamlessly.
The key word here is “persistent”.
Just as the physical world does not stop operating when you go to sleep, the virtual world of the metaverse will continue to evolve and change in a similar way, even when users log off.
Unlike today’s Internet, where each of us pushes and pulls static information from a server in a largely asynchronous manner, the concept of a metaverse will give us the ability to enter a “persistent”, always on, alternate reality where we can interact in a completely synchronous, real-time manner with people, places and things.
In essence, the metaverse is a parallel reality (I like it extended), where we can work, play and consume. But everything seems to indicate that this is not simply a virtual version of the Internet we use today. The metaverse would be what completely replaces the Internet as we know and use it.
While the concept of a parallel world has been talked about for more than two decades, our collective experience through the pandemic – the social distancing, the intense feelings of disconnection and isolation it produced – have only accelerated our imagination around the creation of an alternate reality in which one can interact in real time, at any time with others (potentially thousands or millions of others) and share experiences.
A new world where you can travel, without restrictions, whenever and wherever you want.
A world where any experience becomes possible and accessible.
More questions than answers
The issues of debate about what virtual universes would eventually look like will depend on how they include the degree of interoperability, and decentralization versus monopolization (e.g., will they be owned by Big Tech or by the users, à la ethereum).
The game has long been at the forefront of building what could be a metaverse.
The massively multiplayer online game (MMO) Fortnite is one of the most successful examples: it has hosted multiple live concerts, movies, short films, various other programs and launched branded game modes and more.
But it is still outside the metaverse ideal of true concurrency due to technological limitations.
So what comes next?
eSports applications, eGames, and products are pushing into the mainstream, marking a natural step into the metaverse.
For example, virtual goods, initially popularized by gamers (mainly through character skins), have since entered the worlds of fashion, real estate, art and even pets to become a $190 billion market.
Personalized digital avatars have also gained a foothold beyond games like the Sims in recent years, popularized by BitMoji’s bitmoji from BitMoji (owned by Snapchat), Apple’s memristor, influencer and celebrity-centric Geniuses and most recently, ROBLOX’s acquisition of Avatar company Avatar from Avatar loom.ai.
Are you getting clearer?
On a broader scale, these trends illustrate the rapid convergence of online and offline. Among other things, the Metaverse will enable the serendipity that is often missing in e-commerce interactions.
For example, Aglet: a “Pokémon Go for Sneakerheads” that allows players to collect virtual sneakers by walking: it plans to eventually allow individuals and brands to list their own virtual retail stores in the app.
Where we’re going to go as a world [is] where brands like Vans, Nike or Adidas will launch products in the real world, and then throw it into a game. And the inverse of that is also going to happen in the future. There will be people designing their own brands in these game worlds, and then they will be made in reality.
Once the technology is there, the implications for commerce are massive, as the metaverse offers unprecedented access and total immersion to consumers, creating a kind of virtual “third space”.
Will the metaverse be for many in the future their “first space”?
Brands and marketers can: Operate in a less fragmented marketplace than the Internet as we know it. Avoid the “marketplace cut-through” of third-party discounting or selling platforms altogether.
Enabling deeper franchising or collaboration of/with fans, rather than individual brand marketing opportunities (e.g., each brand has its own app or website), the open world of the Metaverse allows for more immersive experiences pioneered by brands and fans.
Ultimately, spearheading this effort will require massive amounts of financial resources, engineering, design and programming talent, and a hunger for domination, making large tech companies the most likely contenders to build the metaverse beyond gaming platforms like Fortnite and Roblox.
Tech giants like Microsoft, Facebook and Amazon are going to redouble their investments on this in the coming years, given the persistence of each in owning a significant part of the online labor economy, social graph and e-commerce infrastructure.
The Roblox Experience
Nearly half of all U.S. teenagers under the age of 16 played Roblox in 2020. A key difference, however, between Roblox and other online gaming platforms is that every game on the Roblox marketplace is built by its community of users. Using a simple developer toolkit, provided through the platform.
The result of this user-generated approach is that in a very short period of time, Roblox has accumulated millions of different games and experiences.
In fact, Roblox has become its own little economy, where content creators can monetize their game creations by building in virtual products and game upgrades that can be purchased by players, with the revenue split between Roblox and the game creator.
In some cases, top creators are already earning more than $1 million per year in real-world money.
How do you create economic value within an unlimited, digital world?
In the physical world, the value of an object is governed by a few key dynamics, including authenticity, scarcity and ownership.
Until now, the Internet has, by design, been fundamentally unlimited in dimension and limitless in its supply of digital content. But it is this very lack of limitlessness that has spawned most digital products.
After all, the Internet was born as a file-sharing medium, not a file-buying medium.
Similarly, by virtue of Blockchain, any digital asset, be it art, clothing, a photo of Lebron James, Maradona or even experiences, can now be authenticated as genuine, verifiable and exclusive property.
For these reasons, these unique and limited assets, also known as NFTs, can carry a value.
Think of the example of Pokémon cards. The cards themselves have almost no inherent value. It is only the rarity and authenticity of certain cards that drive their value to extraordinary heights. The same key tenants of value can now be applied to digital assets for the first time in history.
Digital artist Mike Winkelmann, who works under the ass BeePle, until recently, never received more than $100 for one of his pieces.
However, in late 2020, Winkelman sold an NFT of his work for more than $66,000. A few months later, the same piece sold for $6.6 million.
And if that wasn’t enough, in March 2021, the artist sold a digital collage through Christie’s auction house for $69 million.
Why? Because now, using blockchain, authenticity, rarity and proprietary rights can be transmitted and verified.
Let’s go back to retail (although we never left).
When it comes to retail, there are those who envision the creation of shopping venues, stores, malls and more, in the metaverse. This is probably short-sighted. Simply moving industrial-age shopping concepts into the metaverse would be unimaginative as well as ineffective.
The creation of the metaverse would allow to break free from the current industrial form and function of physical stores and move light years ahead towards better shopping, interaction and relationship experiences.
Why would you create a virtual replica of a store, for example a fashion store, when you are in the metaverse, if instead you could buy a new garment from within an experience of exploring where the material comes from, knowing first hand the origin and with first hand explanation by the designer of that garment?
There I can get first-hand contextual knowledge of the quality and performance of the garment as I order it to be delivered to my real-world home.
I can buy my new car, or motorcycle, or bicycle in the metaverse, while taking an adrenaline-filled test drive on the race track of my choice, not in a static car showroom.
I could get beauty tips from a personal consultant that I sit in the metaverse with, without leaving my living room.
In a new world where any experience is possible, why on Earth would we use our version of industrial age time as a template for the future?
Marketers, architects, store designers, merchandisers and more will have to start thinking very differently about what a “store” or a “mall” is.
Over time, almost all of us will spend time socializing, learning, working and entertaining ourselves in the metaverse.
Some may choose to spend almost all their time there, seeing the real world as boring, limited and inefficient in comparison.
With increasing amounts of time spent in the metaverse, the ratio between the virtual and physical possessions we own will change dramatically.
Who wants to wear the same virtual outfit to two different virtual parties on the same virtual weekend?
Mientras pasemos más tiempo en el metaverso, los símbolos de status, como la casa virtual que posee, el coche, la moto, la ropa virtual y la joyería que usan o los cosméticos virtuales que usan se convertirán en tan importantes como las mismas compras y posesiones del mundo real.
The metaverse is a new dimension: we can call it a new reality, a new universe, or whatever we want. The metaverse will need brands as much as brands will need the metaverse. It is therefore impossible to ignore the transcendental role of branding in this new dimension.
Brands will capitalize on this demand by creating an assortment of virtual products that could match or exceed real-world prices. In fact, the sheer amount of time that can be spent in the metaverse, unlike the real world, can itself be seen as a status symbol.
No one knows for sure, but what most experts agree on is that the metaverse is an inevitable step in the convergence of humanity and technology and an evolutionary fusion of reality and virtuality.
And, while this could take decades to unfold, there will be increasingly substantial investments now and, in the coming years, by organizations building that future.
Companies like IKEA are successfully employing augmented reality technology to allow customers to design their spaces with their studio app. L’Oréal has built an entire line of virtual cosmetics. And Gucci has begun selling virtual clothing, designed by Gucci creative director Alessandro Michele, for $12.99 per pair.
Each of these things, while limited by the technologies and protocols we use today, is a small step toward that metavertical future. Growth will come slowly and incrementally until, as is the case with the Internet, sufficient infrastructure, developers and users create a tipping point.
Brands will buy an actual virtual property and hire builders to develop their brand presence and experiences, where they will sell digital and physical products to consumers who split their time between the two worlds that will be one.
There is not one metaverse, there are many
Although the full metaverse appears to be years away, a greater convergence of offline and online technological advances will enable the construction of the metaverse.
In the meantime, retailers should look beyond the short-term and strive to experiment with VR/AR (including the use of virtual humans), games like Fortnite, or various other existing technology capabilities.
Offering virtual products may be all the rage, but over the next 10 years, the trend will likely evolve toward designing virtual universes that are more complete, have more substance and offer an immersive shopping experience.
All of this matters today because we are surrounded by a variety of technologies: virtual reality headsets, augmented reality technology, gaming platforms, crypto currencies, blockchain, non fungible tokens (NFT), virtual goods and more, which, although currently still seen as a game, is a very serious game.
Just as, together, they take us to a place called the “metaverse” that could literally change the very nature of life on Earth: how we work, play, share and shop and more.
Distribution, location and availability issues are largely removed from the equation. This means it will be impossible to stand out without a clear brand proposition. Similarly, if physical constraints are removed, the metaverse will provide retail with the opportunity to create the ultimate brand experience.
Rereading the text, I think that having titled this post as “Metabranding, brands into the new universe and beyond” or “Staying human beyond the metaverse” also made a lot of sense. See you in the metaverse, without losing humanity.