The Internet has evolved big time over the last few decades, from just serving you static pages to allowing you to interact, create and connect. Online shopping was one of the first to emerge and is now the norm. According to Statista, digital shoppers worldwide grew by over one billion in the last seven years. Online retail sales worldwide accounted for almost 5 trillion dollars for the same period and are expected to keep up the trend.
We have successfully entered the digital era, allowing technology to make our lives better and faster. So, what comes next?
Welcome to the Metaverse - the merging of two worlds.
What Is The Metaverse, exactly?
After Facebook’s recent rebranding to Meta, the term Metaverse became mainstream, and yet more confusing. People who once have never heard of the metaverse are now being introduced to the latest tech at a pace. So what this exotic new word means? Is it a completely virtual world with limitless possibilities? Is it a speculative sci-fi future? Or is it just a fancy way of talking about the latest extended reality (XR) tech? Remember the early internet days? Everyone was excited about something big coming that no one truly understood, nor was able to forecast how it was about to evolve. Yet, here we are.
According to Bloomberg Intelligence, the metaverse is about to bloom into an $800 billion market by 2024. And with internet giants like Facebook, Microsoft, Apple, and Google taking the lead already, it is definitely a space worth exploring in its early days.
So, to wrap it up, we could say the metaverse is a hyper-real virtual environment where people and businesses can move over real-world assets and services. It is an extended virtual reality where people can interact with each other in a computer-generated environment mimicking our world or creating a completely new one.
You may look at it as the “Second life” game on steroids, thanks to the development of some key technology like the blockchain, VR and AR. The metaverse brings a whole new level of digital experiences directly in front of our senses. Think online games with social networks, live entertainment with rock stars, real-time education, trying on clothes and shoes before buying them, etc. This is just the beginning. The metaverse’s definition is likely to evolve and unlock potential for many new industries in the near future.
How The Metaverse is transforming eCommerce & fashion
You may think the metaverse is not yet at your doorsteps but may I ask you to think twice and I will tell you why. The metaverse is about to disrupt many industries and fashion is one of the first on the hot spot.
According to Gartner’s research 25% of people will spend at least one hour a day in the metaverse by 2026. Add to this the results from a recent Google survey revealing that 66% of shoppers worldwide are interested in using AR when shopping. Another 60% of Gen Z shoppers confirm brands need to sell their products on metaverse platforms, according to a study by Obsess. And if this is not enough to convince you that something is brewing, consider Shopify’s internal study results slapping you in the face with as much as a 94% increase in conversion rates when merchants include 3D content on their product pages.
The metaverse begins to look more and more like a place where people will spend their time and their money.
4 ways The Metaverse could boost your eCommerce fashion business
Now that you are a bit more clear on what the future holds for eCommerce, let’s explore what the metaverse will mean to you in practice.
1. Augmented and personalized shopping
Today’s retail options are primarily divided into eCommerce and brick-and-mortar. Besides the online shopping boom, online retailers still have a big challenge - the conversion rate.
Traditionally online shops convert at 2-4% compared to 20-40% when shopping offline. The metaverse, along with AR could offer a possible solution, allowing online merchants to fully transform the buying experience. Amazon has already added early metaverse technology into its marketplace. You can use its AR shopping tool, Room Decorator, with your phone or tablet to see what furniture and other home decoration will look like in your space. You can view a range of products together, and even take AR snapshots of your room and save them to review later.
The metaverse will also open new doors for product personalization. Customers will be able to customize selected products and see changes in real time in a fully immersive environment.
This will be a game-changer for eCommerce and fashion.
2. Customer interaction & community building
One of the most compelling promises of the metaverse is that it will provide customers with an experience almost identical to in-person shopping. A 3D digital hyper-real environment where people interact with virtual assets and with one another will slowly replace today’s flat pages.
This will further close the gap between social media and eCommerce. Imagine you can go out shopping with your friend who lives across the Ocean or you could meet new people from all over the world in a real-like virtual environment.
Take for example the “Gucci Garden” on Roblox. This immersive experience allowed users to explore a series of themed rooms and discover virtual items from Gucci, created by Roblox creator Rook Vanguard.
Nikeland, is another creative approach brands take to build communities in the metaverse. Nikeland is a virtual space where the sport has no rules and no limits. You can do pretty much everything you think of.
3. Perform market research at little to no cost
Knowing your customers' preferences is gold for any industry. All market research could be done virtually, taking all real-world processes into the augmented reality of the metaverse.
Here are just a few examples of what is possible:
- Heat maps – a new tool called Z-dimension allows for real-time heat maps of consumer behavior.
- Digital design testing – you could first introduce your products in the virtual world, let people try them on, and receive feedback before the actual production.
- Augmented analytics – BadVR, the world’s first immersive data analytics platform, let you visualize data in a 3D environment. You can also collaborate in real-time with your team.
Why NFTs are the keys to accessing The Metaverse
NFTs and existing metaverse environments are already closely interconnected, with NFTs taking the role of value carrier. NFTs are set to disrupt the current paradigm of user interaction, socialization, and transaction in the metaverse.
Here are a few use-cases of NFTs in the metaverse:
Protecting and proving your identity is an issue we often stumble upon even in the physical world, not to mention online. Now, when we are about to immerse into highly realistic 3D digital environments, the concern about identity protection is still on the plate. How will we establish and prove our identities in the metaverse is a question that may find its answer in NFTs (non-fungible tokens). To over simplify what an NFT is we can just say it is a blockchain-based record of digital ownership.
2. Community and social experiences
NFTs in the metaverse have the potential to unlock unprecedented community engagement and participation, blurring the lines between the physical and digital worlds. Take this great vision for example from Paraj Mathur, Senior Associate on the Panoramic Ventures investment team:
“Shoe brands can create NFTs that community members can mix and match to create new shoe designs. If the design is chosen by the community, the brand can manufacture and sell it, with NFT holders getting a revenue share on the new design.”
And more recently, we’ve already seen leading consumer goods brands taking the leap into the metaverse. Samsung, for example, created Samsung 837X, an immersive world built in Decentraland and mimicking the flagship Samsung store in Manhattan. People will be able to explore a new Connectivity Theater, Sustainability Forest, and more. Like the Customizable Stage, where you can attend virtual dance parties and other live gigs.
Co-creation and shared experiences boost loyalty as they feel closer to the brand and their fellow fans.
3. Access pass and exclusivity
Creating scarcity is another NFT strategy brands use to generate buzz and demand.
e.l.f Beauty launched its first NFTs in the summer of 2021 - digital, “gold dipped” art of 3 of its top products: Poreless Putty Primer, 16 HR Camo Concealer and Ride or Die Lip Balm. This new approach increased demand, just like it did for D&G, Burberry and other pilot NFT+eCommerce concepts.
In another example, MAC Cosmetics took a metaverse spin in a special collab with an NFT collection - Viva Glam X Keith Haring. All collection sales would be donated to the MAC Viva Glam Fund, while 2.5% of any future resales would be donated to The Keith Haring Foundation.
In the metaverse, shopper can find new and unique spaces where they interact with brands and connect with others in the context of shopping. Gucci recently announced they are developing a virtual space to experiment within the gaming ecosystem of The Sandbox, which is a rapidly expanding metaverse. Snoop Dogg and K-pop talend incubator - Cube Engagement also have presence in this metaverse.
Gucci spread the word in their community server in Discord, the go-to messaging platform for all things NFT-, crypto- and metaverse-related. These servers unlike polished Instagram posts tend to be open to fans (in some cases, only those who have purchased NFTs) and facilitate public peer-to-peer communication and community expansion.
In the future, with a better-established legal structure, anything can be tokenized - jewelery, property titles, car deeds, health information, etc.
This gives merchants, retailers, and dealerships a secure way to transfer ownership. And since NFTs are publicly verifiable on the blockchain, the end of disputing ownership.
As the metaverse grows in importance for businesses and for consumers, NFTs will be a vehicle through which in-world residents can purchase virtual real estate, furnish their virtual houses, and clothe their digital selves. The products you’ll buy in the metaverse will be, in essence, NFT versions of your blender, your hoodie and your lawn mower.
By combining NFTs with DeFi (decentralized finance), you’ll be able to verify ownership and do away with middlemen or brokers when purchasing high-value physical items.
The Splyt platform, for example, uses NFTs to represent real-world items instead of digital items. Inventory data is stored on the blockchain, and entrepreneurs can sell NFTs and collect royalties when an item is resold. Buyers can be assured their purchase is authentic because of the security built into the NFT.
How Relite can help?
Before considering whether you should use NFTs for your business, you must understand that it is not about just being part of the next hot thing. It boils down to creating real value for your customers. Stay tuned for our next articles exploring various ways you can incorporate NFTs, along with examples of how the big names did it successfully.
If you are not sure whether NFTs are for you, feel free to get in touch with George, Relite's founder, and schedule a talk to explore opportunities.