Does the concept of the metaverse seem daunting? As technology has evolved, various industries are adopting unique ways of doing business and learning about new tools to keep up with the demands and expectations of consumers.
The metaverse has been gaining momentum in recent months, and shows no sign of slowing down. Consider that Metaverse Dubai has already built the first and original NFT metaverse, based on a real-world map of Dubai’s most prestigious areas.
As expert retail consultants, we have our finger on the pulse of industry developments. Let’s explore the role that the metaverse plays in the future of retail, and the challenges that corporations will encounter.
What Is the Metaverse?
Essentially, the metaverse is a 3D digital environment that combines augmented reality (AR), virtual reality (VR) and video.
The metaverse breaks through physical limitations by creating virtual constructs. In the retail space, the metaverse offers great value for customers and retail outlets alike. The metaverse supersedes our current understanding of the internet and virtually overlays data and experiences onto our physical surroundings.
Who Will Build the Metaverse?
Mention of the metaverse was first made in author Neal Stephenson’s 1992 science fiction novel Snow Crash. Since then, the concept has become a reality and Big Tech companies are working on bringing the possibility to fruition.
Many people associate the metaverse with Facebook, who rebranded to Meta in October 2021. However, there are more than 160 companies building the metaverse, laying the foundation for the future. Some of the most notable are Epic Games, Meta (Facebook), Niantic, Microsoft, and Apple.
Organizations are also working independently in an experimental sense. For example, in the UAE, blockchain-enabled Hyperspace is building a physical front end to the metaverse, assisting with real-time connectivity to digital worlds and lifestyles.
Economic Value in the Metaverse
In many ways, the internet has changed the way that we identify economic value. Consider that more than 50% of surveyed UAE citizens intend to use cryptocurrencies within the next year. The subsequent rise of crypto and blockchain has shifted the economic landscape in a digital direction and digital products have become commodified.
In an effort to preserve the value of items, blockchain has been incorporated in the metaverse as a way to maintain authenticity. Using a blockchain ledger allows virtual goods to be verified of authenticity, rarity and verify rights of exclusive ownership.
Retailing in the Metaverse
The metaverse is being incorporated by various industries, with the hope of disrupting the playing field. Along with film, advertising, healthcare, and real estate, retail is one of the industries that holds the most potential for change.
Consider that Meta plans to open retail stores to further build the Metaverse around the world, including in the UAE. The development is largely due to the pandemic fueling change and customer expectations.
As the metaverse translates itself into the retail space, marketers, store designers and merchandisers will need to reconsider the concept of a store entirely. Brick and mortar stores carry a nostalgic appeal, but the metaverse offers a convenience and comfort that society has grown accustomed to have.
The metaverse is a few steps beyond digital merchandising, and it introduces a unique set of challenges (and opportunities).
A few challenges to note include the following:
- Maintaining reputation and identity
- Data and security
- Currency and payment systems
- Law and jurisdiction
- Ownership and property verification
- Lack of skills and experience
- Consumer traction to using access tools (such as VR headsets, glasses, among others)
Consider that the removal of physical constraints allows brands to create the ultimate brand experience. Paying attention to distribution, location and availability will further the possibility of success.
Examples of key players in Retail
While the metaverse is still a fairly new concept in actuality, there are a few retail brands that are leading the charge:
- Ralph Lauren - Gender-neutral digital clothing is available in virtual Polo shops on Roblox, as well as a gamified social experience
- Zara - Digital versions of the physical AZ collection is available on the ZEPETTO platform
- Stefan Cooke - A 23-piece modern menswear pack is available for purchase on the EA video game, The Sims
- Jordan Brand - Fortnite gamers can go on a scavenger hunt and acquire brand clothing and accessories
- Balenciaga - previously working with Fortnite, Balenciaga is working on a dedicated, exclusive metaverse
- The OTB Group - The creation of the new business unit, Brave Virtual Xperience (BVX), offers support to all of its brands in gaming
- The British Fashion Council (BFC) - Launched its first Fashion Award for metaverse design with Roblox
- Dyson - Created advanced VR technology allowing customers to test products using an Oculus headset
- H&M - Items from the vegan Co-Exist Story collection have been created in virtual form to be showcased at the in-game fashion show for Animal Crossing
Balenciaga dressed characters. Courtesy of Epic Games.
Examples of key players in Gaming
The metaverse is most commonly associated with gaming, as the translation of VR and AR is already prevalent in the industry. Even so, there are a couple of key players among others that are dominating the industry.
- Fortnite - users can interact with environments and socialize in an augmented reality
- Roblox - with many fashion collaborations, Roblox allows users to customize their clothing and accessories in games
Examples of Key Players in Tech
Many companies are investigating the potential of the metaverse, with a couple leading the charge:
- Meta - After changing their name to Meta, Facebook has committed to “bring the metaverse to life” and has pursued this goal by purchasing Oculus, unveiling Horizon Home, and more
- Microsoft - As Meta’s rival, Microsoft has been investing in immersive spaces with a strong focus on the workplace
The role of Non-Fungible Tokens (NFTs)
NFTs play a crucial role in the smooth operation of the metaverse. While NFTs are commonly associated with digital artwork and collectibles, they also provide opportunity in the metaverse, especially in retail.
As real-life identities adopt Avatar personas, people are starting to buy digital assets from retail outlets. NFTs help gain exclusive access to enter a metaverse’s location, and even assist with airdropping branded merchandise or special privileges to followers.
Should you consider it for your business
The metaverse already exists through the method of interactive games and avatars. Other industries in the UAE are experimenting with the metaverse in various ways, such as the MetaTerrace restaurant which has launched in Dubai.
Yet as it stands, the metaverse isn’t available to many consumers in the retail space. The need for a VR headset is a barrier to entry. The technology is still under development, and it could take several years before the metaverse is mainstream. Anyone who chooses to invest will be laying the foundations for easier deployment in the future and for a development that will most likely become the norm in the future.
At Ollen Group, our strategy consultancy services are up to date with consumer shifts in the Middle East, and the necessary steps needed to find success in the future - including the development of different aspects to be part of the metaverse and cope with the demand for digital progression. Ollen Group technology consultancy services and retail consultancy services offer turnkey solutions from strategy to execution, as well as design, development, and deployment.
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