Recent examples such as Click&Collect show it clearly: Omnichannel is slowly erasing even the last boundaries between off- and online retail. With the metaverse, a new trend is now emerging on the horizon that is likely to fuel omnichannel commerce even further and permanently change the shopping experience.
What still seems like something out of a science fiction novel today will be taken for granted in the future of retail, specifically in the metaverse: Apps will use augmented reality (AR) to guide us through the store to the product we are looking for or inform us about offers that we can conveniently accept with a swipe. The fact that this is also attractive for consumers is demonstrated by a Google study According to this study, 66 percent of consumers are interested in using AR tools as a shopping aid.
In turn, the metaverse promises the consumer goods industry and retailers new business areas and additional sales channels - and thus enormous growth opportunities. This is not surprising, since according to Gartner, a quarter of people will spend at least one hour a day in the metaverse by 2026, be it to work, to educate themselves, to browse social media - or to shop. The market volume of the metaverse economy also promises to be enormous: According to estimates by Bloomberg, it will amount to around 800 billion US dollars in 2024.
One thing is clear: the metaverse will also have a major impact on retail. But what exactly is behind the metaverse trend and what does it mean for retail?
What exactly is the Metaverse and how does it affect the future of commerce?
The Metaverse - an artificial word made up of "meta" (higher level) and "universe" (universe) - is a vision of an online cosmos in which the virtual environment, augmented reality and the real world converge. Users have a digital identity in the form of self-created avatars that allow them to switch seamlessly between different virtual spaces and applications. This "digital twin" can be used to work in the virtual office, join in the nightlife, take part in online events, pay a visit to the stadium of their favorite soccer team - or go shopping. Watching a World Cup final on the other side of the world or enjoying Christmas shopping in New York will therefore also be possible without traveling, as long as this service is also offered in the virtual world.
New business models
It is clear that the Metaverse is opening up entirely new forms of social interaction in retail in this way. While pioneering technologies such as artificial intelligence, virtual reality, augmented reality, 5G, blockchain and NFTs (non-fungible tokens) are not yet fully mature, the Metaverse already hints at offering entirely new business models to retailers. Since the Metaverse has its own economy, it is thus possible for every user to make investments, purchases and sales, to trade within the Metaverse and thus to make revenue.
What does the metaverse mean for retailers?
Our shopping experience will be fundamentally changed by the fact that commerce will also take place in the metaverse. For example,digital twinningwill create virtual versions of users as well as digital images of offices, apartments, houses and stores. These, in turn, will allow users to move seamlessly between the real and digital cosmos. Already, there are useful applications based on AR that merge the two worlds. For example, consumers can use the corresponding app to see how well the sofa they want would look in their living room. All they have to do is start the app and point the camera into the room to see how the piece of furniture would look in their living room.
It is also conceivable that in the future, customers will be able to try out a product in a virtual store before making a purchase decision. For example, when shopping for fashion, it would be possible to try on clothes virtually with the help of our digital twin, which has our exact body measurements. If the app also knows the contents of our closet, we can avoid color mistakes, for example. What's more, the app would also offer suggestions for fashions that match our existing wardrobe, which would provide retailers with additional upselling opportunities. The highlight: After the virtual try-on, the real goods can be sent home at the click of a mouse. In addition to a better customer experience and thus higher customer satisfaction, the Metaverse ensures lower return rates in retail.
But these are not the only benefits this trend will bring to retail. Rather, the metaverse will positively change the future of retail in many ways. Above all, however, the social element plays a major role: the virtual world makes it possible to go shopping with friends - even if they are not on site at the time.So one thing is certain: the metaverse opens up a multitude of opportunities for retailers. Nevertheless, the concept is still in its infancy and presents companies with many hurdles. It also harbors various risks that retailers must be aware of if their presence in this parallel universe is to be crowned with success.
What are the challenges and risks of the Metaverse for retailers?
First and foremost, retailers need to correctly assess the resources required to enter the metaverse. It is also important to keep a constant eye on the consumer behavior of shoppers. This allows retailers to create a solid database that they can use to optimize their business processes. It is also important to first define a strategy or the desired application scenario and only then start with the actual implementation.
Bots and external attacks
But while managing these challenges is still in the hands of the merchants themselves, there are far more critical aspects that are beyond their control. For example, automated bots in the metaverse could misrepresent themselves as real users. By unnecessarily generating digital traffic, they could cause congestion in digital spaces and slow down data exchange. The greatest risk, however, is online fraud, which is even more potent in the metaverse than it is today. This is because the possibility of acquiring multiple identities there makes the virtual world a playground for criminals. Fraud opportunities range from e-commerce swindles to NFT theft and fake accounts used to distribute phishing emails and ransomware. Such perfidious actions are already causing millions of dollars in damage.
While the metaverse is still uncharted territory for retailers, it is already important to think about how it can be used while still protecting society from fraud. Retailers have a responsibility here: just as in the real world, consumers simply expect retailers to minimize potential risks in the metaverse as far as possible.
Metaverse: What should retailers do now?
Since the metaverse is still a thing of the future for retailers, the key is to get your company's direction on track now if you don't want to be left behind by the competition. In particular, these three things need to be done:
- Keeping an eye on trends and technologies
Dealers should always keep themselves as well informed as possible about trends and technologies. Looking through the lens of their specific industry shows what these mean for their own trade.
To get an idea of which trends will be important for retail in the future and how they will affect your own customers, the key is to try them out! Companies should know how gaming and virtual reality work and therefore subject these technologies to extensive tests. It is also a good idea to buy an NFT yourself.
- Homework "Digitization "
Whether online presence, merchandise management or CRM system: good digitization of the company is essential, because it is a prerequisite for the company's success - and thus also for the future of retail.
Conclusion: Metaverse - bright future for trade
The forward-looking "metaverse" trend will open up unimagined opportunities for retailers and create huge growth opportunities. According to estimates by the investment bank Morgan Stanley, the fashion and luxury goods industry, for example, could bring in an additional USD 50 billion in sales by 2030. Admittedly, it is still too early to know exactly which platforms will prevail in the future and which investments will therefore be worthwhile in the long term. Nevertheless, retailers must not remain idle now. Rather, it is now a matter of developing an awareness of the metaverse and considering the extent to which its potential can be exploited for one's own company. Retailers who have the courage to try new things now will take omnichannel - and customer satisfaction - to a whole new level.
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