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Although everyone agrees that the metaverse is coming, there’s no broad consensus on what it really is, and how it’s going to work. Retailers see it as essential to serving customers, a natural progression from mobile, social media and the internet. But how will retailers shift the intricacies of selling physical goods over to a virtual world? That question and more are emerging as businesses begin exploring how they might navigate the uncharted waters of the metaverse.
It’s important to learn “how we separate what we do in the virtual space from what we do in the physical world that’s further converging,” metaverse expert Cathy Hackl says. “Commerce is evolving as we head into these new virtual spaces and shared experiences, both in the virtual and physical world[s].”
In this context, technology has a new mission: illuminating how users behave in virtual retail spaces. Detecting who is visiting your virtual store, where and when they’re visiting, how they’re interacting with your products and for how long, why they engage with specific content — all of this information is crucial to retailers. To know what works in the metaverse, retailers need to follow the customer journey closely, and use customer insights to help guide the design and product placement in their virtual stores.
Researchers have been studying the metaverse marketplace recently, and their predictions are optimistic:
- In a metaverse market report, Verified Market Research projects that the market will reach USD $825 billion by 2030; in comparison, the metaverse market was valued at USD $27 billion in 2020.
- Gartner predicts that by 2026, 25 percent of people will spend at least one hour each day working, shopping and more in the metaverse, while 30 percent of organizations worldwide will offer products and services in the metaverse.
- A McKinsey report on value creation in the metaverse forecasts growth to $5 trillion in value by 2030, with ecommerce the greatest force at $2.6 trillion.
- Further, 95 percent of business leaders expect the metaverse to have a positive impact on their industry over the next decade, McKinsey says; 31 percent say the metaverse will change the way their industry operates.
As for consumers, McKinsey senior partner Eric Hazan (lead co-author along with senior partner Lareina Yee) notes that among more than 3,400 surveyed worldwide, “two-thirds are excited about transitioning everyday activities to the metaverse, especially when it comes to connecting with people, exploring virtual worlds, and collaborating with remote colleagues.”
Real customers in virtual spaces
Consumers may be excited about shopping in the metaverse, but companies still have much to learn about designing appealing virtual retail spaces that consistently lead to sales conversions. Retailers need to know the demographics of their shoppers (age, gender, location, etc.), and how customers move through the virtual store. How long do they stay? What areas do they visit and interact with? What products do they engage with? And what do they buy?
Metrics like these are commonly used to assess online shopping sites — and, even more commonly, physical store traffic — don’t exist in the metaverse. It’s still unknown territory. But tools that track consumer behavior in virtual retail stores could help retailers see what areas customers are visiting and how they’re engaging with products.
Ideally, metaverse retailers can use such customer insights to guide the design of their virtual spaces, from layouts to product placements, as their long-term ecommerce strategies start diverging from one-time usage campaigns to full-blown flagship stores, enabling them to collect and analyze data on the behavior of their metaverse consumers.
Retailers have some fundamental concepts to explore as they figure out how to sell products in the metaverse: the familiar virtual-to-virtual model will be joined by new virtual-to-physical, physical-to-virtual and direct-to-consumer models.
Virtual-to-physical commerce enables customers to purchase goods while shopping in a virtual environment and have those purchases delivered to their real-world homes. The reverse, physical-to-virtual commerce, offers actual products designed to unlock a virtual experience (via a scannable QR code, for instance). Direct-to-consumer commerce may have the greatest potential of all, considering that during 2021 alone, some $100 million was spent on virtual goods in gaming platforms.
Scaling up each of these models will play a large part in determining whether those future projections of billions of dollars will be on target. And leveraging the data each will generate — all of it critical to retailers — will require further technological breakthroughs.
A new land of opportunity
According to Gartner, “Enterprises experimenting with the metaverse can connect, engage with and incentivize human and machine customers to create new value exchanges, revenue streams and markets.” Capturing these economic opportunities will require companies to adopt new digital business assets (DBAs) along with metaverse-friendly updates to product development, brand placement, and customer engagement strategies, and “financial flows in the virtual world.”
This “new land of opportunity” will be open to entrepreneurs, too, says metaverse guru Dirk Lueth, who co-authored the new book “Navigating the Metaverse” with Cathy Hackl and Tommaso DiBartolo — and it’s a limitless land. Today, “entrepreneurship will get a completely new twist in the sense that anyone can become an entrepreneur in the metaverse,” Lueth says. “It doesn’t matter where they’re from … People anywhere in the world can make it.”
The metaverse is very much a work in progress, calling for innovative technology, up-to-the-minute data management and analysis, fresh products and a pioneering approach to commerce. Yet even while “everything’s evolving,” Hackl believes that brands must start building their metaverses now. “If you wait a year and a half or two years to do something, to have a clear strategy,” she cautions, “it might be a little bit too late.”
Olga Dogadkina is founder and CEO of Emperia.
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