Category: Industry Insights

Brands are moving fast to leverage technology that will empower them with 360-degree, immersive digital experiences. These 3D experiences offer a natural opportunity for brands to enter into the metaverse. 

Immersive digital experiences are powered by Augmented Reality (AR) and Virtual Reality (VR). AR and VR, while used interchangeably, have distinct differences. Typically, AR uses aspects of real-world settings and environments enhanced by computer-generated graphics, whereas VR is entirely virtual. A way to think about the distinction, as Wunderman Thompson reports, is “Augmented reality is when you’re still within your current environment, and you’re just overlaying computer graphics on top of what you’re seeing—whereas with virtual reality you’re taken to a different world.” Most people have their first interaction with AR through filters on Snapchat and Instagram and with virtual try-on technologies on beauty sites. Whereas, most people have their first interaction with VR on the web via games, virtual tours, and virtual stores.

Snap, Meta and Apple Invest in VR and AR Technology

The rapid rise of immersive technology has prompted the world’s most powerful tech and social media companies to invest significant capital and resources towards the research and development of AR and VR products. 

Meta, as part of its October 2021 rebrand, invested $10 billion in VR and AR in an attempt to pivot the firm’s focus from social media to the metaverse. This transition has been in the works for a number of years, beginning when Facebook acquired VR-headset startup Oculus for $2 billion in 2014. According to a March 2021 report from The Information, nearly a fifth of all Meta employees — about 10,000 people — are working on VR/AR in the company’s Facebook Reality Labs (FRL) division. FRL is responsible for developing the software that will lay the foundation for Meta’s virtual platform.

Apple announced the expansion of its AR focus in January 2022, stating it has plans to grow the App Store’s current collection of 14,000 AR apps. The iOS 15 software update included AR-backed positioning and locating features on the Maps app. It is anticipated that the company will build AR tools for 1 billion devices around the world. Recently, CEO Tim Cook responded to a question regarding the company’s metaverse plans, saying, “We see a lot of potential in this space and are investing accordingly.” On the hardware side, Apple is working to introduce an AR headset with glasses in either 2022 or 2023, according to Bloomberg.

The most innovative element of Snap Inc.’s business is arguably in its augmented reality lenses, which were most of the world’s introduction to AR. Through these lenses — which today number at 2.5 million and have accumulated over 3.5 trillion views on the app — users are able to augment and alter their appearances from an extensive catalog of options that include fantastical and increasingly lifelike features. In addition, Snap has a global creative studio called Arcadia dedicated to helping brands develop augmented reality advertising and experiences. The studio has partnered with leading brands to grab the attention of Snapchat’s millennial and Gen Z audiences. Snap advanced further into the AR space in 2021 with its acquisition of WaveOptics, a company that makes lenses and other hardware that can be leveraged in AR glasses. With the acquisition, Snap can match its competitors and develop AR glasses that will allow users to see computer-generated imagery overlaid on top of the real world. One common goal of all these companies is to perfect easily-wearable AR glasses, which will allow people to see digital items overlaid on the world around them.

Oculus Quest is the Best-Selling VR Headset to Date

Currently, the Oculus Quest is the leader in wireless VR headsets. The first edition of Oculus Quest introduced immersive gaming to both newcomers and seasoned gamers across the world. The pandemic accelerated adoption of the Oculus Quest and its applications transcended from gaming to everyday lifestyle activities, like fitness workouts. According to Meta Quest news, Oculus Quest 2 “is the next generation of all-in-one VR with a redesigned all-in-one form factor, new Touch controllers, and a high-resolution display.” With the launch of Quest 2, users are able to “squad up with friends in different time zones, meet up with real people at virtual events, and create, play, [and] explore together from wherever.” The audience for Oculus Quest is still predominantly male, but female ownership is ever increasing. In the last three years, the Meta Quest store — which initially launched in 2019 and provides a platform for the headsets’ games — has more than quadrupled in revenue. In fact, total sales have surpassed $1 billion, marking a massive uptick in people buying VR software since the release of the Meta Quest 2 in late 2020 (PCGamer).

Headset-Based Experiences by Retailers

Retailers have ventured into headset-based experiences and have begun exploring the capabilities of immersive VR. One example of this is the global fast-food chain Wendy’s. Wendy’s created its virtual world, dubbed “Wendyverse”, in the metaverse in partnership with Meta’s Horizon Worlds. With Quest 2 VR headsets, users enter the Wendy’s 3D-world and walk through a virtual town that is entirely Wendy’s themed, replete with a virtual restaurant, a Fanta-filled park fountain, and an online arena where users can play basketball with a virtual Baconator burger. Wendyverse visitors also receive a coupon for a $1 breakfast sandwich to use in real life. The Dyson Demo VR is a 360-degree virtual reality environment that enables customers to style virtual hair and interact with 3D images of Dyson machines. The virtual experience is accessible through the Oculus store for Quest VR headset owners. Users enter a virtual showroom and can experiment with a range of products from the Corrale straightener to the Airwrap styler and test different styles on virtual hair. Sean Newmarch, Dyson’s e-commerce director, commented, “Covid-19 has presented the digital world with unprecedented opportunities, and we’re seeing a heightened focus on how companies are bringing their products to life for consumers virtually” (Glossy).

Brands Leverage VR Tech and AR Try-On Tools

Beauty and fashion brands are harnessing the power of AR try-on tools to improve the customer’s buying journey and encourage purchasing decisions virtually. AR try-on tools allow customers to try on clothes, makeup, and skincare products, without physically being in a store. Two of the main players in the AR try-on space for beauty are ModiFace and Perfect Corp. ModiFace beauty try-ons track the facial features in precise detail to create an accurate, photo-realistic makeup simulation. Perfect Corp provides a range of virtual try-on technologies from AgileHand, AR hand–tracking technology to AgileFace, AR face–tracking technology. Brands are exploring virtual try-on within their websites to provide consumers with an accurate sense of the look, feel, and size of the product. NARS offers an interactive, AR try-on via their website where customers can “try everything once” through simulations on live video. The NARS virtual store powered by Obsess enables users to virtually try on over 500 shades of lip color and find their ideal foundation shade with Matchmaker AR technology.

Beauty brands are leveraging AR filters that enable augmentation and alteration of appearances to increase consumer engagement and interaction. Instagram AR filters help brands showcase their products in a fun, interactive way and engage worldwide audiences. The ‘Kylie Hearts’ Instagram AR filter by Kylie Cosmetics allows fans to create a fantastical heart-shape, blush makeup look. While the ‘Air Matte’ AR Instagram filter by NARS provides users with a more realistic view of how the blush colors from their Air Matte selection will appear on them; users can choose the shade that best suits their skin type. The Dior Makeup Instagram AR filter empowers users to lay gemstones over their faces, pushing beyond the boundaries of real-world makeup and “creating a new form of ‘homoinstagramus’ beauty.” With the ‘Norvina Arcade’ filter by Anastasia Beverly Hills, users can play with four different personalities and try on a purple unicorn teddy, bunny ears, a blue alien, or the Norvina eyeshadow palette filter. 

Fashion and jewelry pioneers of AR try-on tools include Farfetch, Prada, and Piaget, all of which leveraged Snapchat’s virtual try-on features “that [detect] and [respond] to body movements and facial dimensions” (Vogue Business). Users are encouraged to test the products on themselves through easy-to-use filters that can be both voice and gesture-controlled. Farfetch, for example, leveraged Snapchat’s technology to allow users to see clothing displayed on their bodies — a tool that is enabled by 3D Body Mesh which maps the human body and develops a cloth simulation that makes the clothing appear as if it is affected by gravity. Pieces from Off-White by Virgil Abloh were available for try-on, and voice-command features matched users’ words to items in the product catalog for a bespoke experience. Prada, as well, leveraged Snap’s hands-free try-on technology to detect hand gestures, enabling users to set down their phones and try on Prada handbags by using “swiping” gestures to switch the colors of the products. Piaget employed Snap’s AR technology to allow users to try on bracelets and watches — a perfect application for a brand specializing in just that.

Retailers Create VR Stores

Leading brands are leveraging VR and journeying into the metaverse with interactive, 3D virtual store experiences. Virtual stores enable retailers to offer new, unique experiences and elevate their traditional e-commerce sites. Obsess, the leading Virtual Store Platform, enables brands and retailers globally to offer interactive 3D virtual stores on their sites that can be accessed on a computer or smartphone, or with VR headsets. AR try-on technology can be integrated into virtual stores and as customers discover products in the virtual environment, and then seamlessly transition to AR to try the product on themselves.

These virtual shopping experiences serve as an entry point into the metaverse. Neha Singh, CEO, and Founder of Obsess, commented in Forbes, “The metaverse is just the next version of the internet. At first, it was just text, then images, then videos. Now hardware on our mobile devices and computers allows for much richer, virtual graphics.” These ‘virtual graphics’ allow Obsess to create realistic online adventures that mirror the highly interactive nature of in-person shopping experiences. Younger generations are growing up in the age of VR and AR-first. The virtual world will become their real world, and they will be — and to some extent already are — shopping, socializing, and hanging out in virtual experiences on a daily basis.

Learn more about how your brand can utilize VR/AR technology to engage customers with an interactive, immersive, 3D virtual store experience, using the Obsess platform.

What is the Metaverse?

The term “metaverse” originally appeared in Neal Stephenson’s science-fiction novel Snow Crash. Three decades later, the term metaverse is losing its association with science fiction and becoming a reality now. Google Analytics shows interest in the metaverse has accelerated at a rapid rate with the number of searches for the word increasing more than tenfold from 2020 to 2021. Vogue Business states the metaverse is “the next stage of how we use technology—the successor of the internet age”. 

With all the heightened interest in the metaverse, there have been differing definitions of the term. The Wunderman Thompson Intelligence Report “Into the Metaverse” highlights the ambiguity around the term, “Some call it the new internet, others a democratized virtual society, yet others the convergence of virtual and physical realities, persistent virtual spaces, or a digital twin of our own world.” Matthew Ball, a Venture Capitalist, Managing Partner at early-stage venture fund EpyllionCo, tries to create clarity around the term commenting, “The best way to understand the metaverse is to think about the idea that we will spend an ever-increasing amount of our lives connected to persistent virtual simulations.”

“The Metaverse is the New Mall” defines the metaverse “as a connected, 3D virtual world where consumers, through their individual avatars, are able to interact in real time with the digital environment and everything and everyone in it. In this virtual universe, users participate in activities like shopping, gaming, learning, working, and attending concerts and events—but they also use the space to just hang out and socialize with one another.”

According to Vogue Business, the metaverse comprises “digital fashion, social media, augmented reality, virtual stores, video games, and non-fungible tokens (NFTs)”. Many brands and retailers had already begun exploring these areas of the metaverse before interest in the term started to peak after the advent of Facebook’s Meta.

Brands will have an unprecedented opportunity to create in the metaverse. In the metaverse, brands can design their own environments devoted to shopping that will allow consumers to go beyond the simple transaction of searching and filtering. Shoppers will be able to interact with one another and with brands and their products. The metaverse will empower consumers to design, clothe and accessorize their digital avatars, attend fashion shows, and participate in other activities and events. According to a Wunderman Thompson Intelligence Report Into the Metaverse, “Digital engagement is moving from passive consumption to active creation–shifting creative power to the user.” Brands need to begin defining how they will represent themselves in the metaverse because shoppers, especially younger demographics, will expect to seamlessly engage with every aspect of their online lives through the virtual world we will inhabit. 

Why is Interest in the Metaverse at an All-Time High?

There are a handful of reasons why retailers and brands should begin positioning themselves for the metaverse, a market opportunity that Bloomberg Intelligence estimates will reach nearly $800 billion by 2024.  

Facebook’s rebrand as Meta underscores how timely it is for brands to start building metaverse strategies into their business plans in order to establish a distinctive presence in this new digital sphere. Another reason why there is heightened interest in the metaverse is technology has evolved to the point that it is possible to represent digital interfaces in immersive 3D graphics that mirror the real world, as opposed to the 2D “page” interface that is still typical on most e-commerce sites. These advances in computer hardware and software enable the metaverse. 

Additionally, the pandemic accelerated consumer adoption of immersive technologies and the metaverse. The study from Wunderman Thompson reveals “As COVID-19 restrictions ease, the acceleration of tech and its prominence in many lives will continue, with 76% of people saying their everyday lives depend on it and over half saying their happiness depends on it.” People are spending a considerable amount of time and placing a high value on their digital self to the point that their in-person lives are merging with their digital lives. The metaverse can be viewed as a natural progression of the convergence of people’s physical and digital lives. With the metaverse, people will spend their daily activities from socializing to working in virtual environments. 

Studies have shown that people already are spending more time interacting with their friends on social media and gaming platforms than in real life. According to the US Bureau of Labor Statistics (July 2021), people in the US spent on average 6.5 hours per day online. People are only spending around 65 minutes per day seeing friends in person. Post-pandemic this ratio will increase further in favor of people spending more time on virtual interactions. The Wunderman Thompson Intelligence Report Into the Metaverse states “As COVID-19 restrictions ease, the acceleration of tech and its prominence in many lives will continue” and sites that “93% of global consumers agree that technology is our future and over half (52%) say their happiness depends on it.”

How Brands are Already Leveraging Gaming, NFTs, and Virtual Stores

Gaming, one of the core components of the metaverse, has become an increasingly popular way for younger generations to connect and socialize virtually. The Wunderman Thompson Intelligence Report notes that 59% of the US population classified themselves as gamers, including 90% of Gen Zers. This statistic is highly relevant to brands and retailers since the younger generations are gravitating towards gaming as means of entertainment and socializing. Luxury brands are already taking note of the younger consumers’ interest in gaming and are selling their products on gaming platforms. 

A Morgan Stanley report “Luxury in the Metaverse” states “metaverse gaming and NFTs will constitute 10% of the luxury goods market by 2030—a $56 billion revenue opportunity.” Brands are finding success in consumer engagement with virtual goods and NFTs. The Metaverse Mindset: Consumer Shopping Insights survey finds that 74% of Gen Zers have purchased a digital item, such as an accessory, skin, or garment for their avatar, within an online video game. The NFT market has had exponential growth. Morgan Stanley predicts that the NFT market will grow to $236.71bn by 2030 and forecasts that luxury digital/hybrid collectibles will be a $19.17bn market.

Many brands and retailers are leveraging virtual stores as an entry point into the metaverse. Consumers who are shopping in these 3D immersive virtual stores are finding them highly engaging. In fact, 70% have made a purchase in a virtual store. Brands are viewing virtual stores as a means to take their first step into the metaverse, create high customer engagement, and generate ROI. Learn how your brand can sell physical and digital products in the metaverse with a virtual store.

70% of consumers who have visited a virtual store have made a purchase, according to The Metaverse Mindset: Consumer Shopping Insights, a survey by Obsess.

The survey was designed to gauge consumers’ perceptions of and demand for virtual shopping experiences in the metaverse, a market opportunity that Bloomberg Intelligence estimates will reach nearly $800 billion by 2024.

Gen Z Consumers and the Metaverse

The Obsess survey found that nearly 75% of Gen Z shoppers have purchased a digital item within a video game and that 60% of these young shoppers think that brands should sell their products on metaverse platforms. Among Gen Zers who think brands should sell in the metaverse, 54% reasoned that people should be able to shop anywhere they go online, while 45% indicated that metaverse environments should be like online shopping malls. 

In addition, 41% of these Gen Zers said brands should sell in the metaverse because it gives consumers a convenient place to buy digital products like nonfungible tokens (NFTs) as well as physical products.

The Obsess survey also found that fully one-third of all survey respondents, including 40% of Gen Zers and 40% of millennials, would be interested in shopping for real or virtual products in metaverse environments that brands create.

“Our data indicate that the majority of younger consumers want to be able to shop their favorite brands anywhere they go online, including on metaverse platforms,” said Neha Singh, CEO of Obsess in a statement. “These shoppers have grown up with online videogames, esports and social media and many of them see the emerging metaverse as a modern-day mall—a connected virtual world where they can hang out, shop and socialize. For retail brands, these survey findings highlight the importance of creating sound metaverse commerce strategies today that will resonate with consumers over the coming years.”

About a quarter of consumers have shopped online in a 3D virtual store. Among that group, 70% — including 69% of Gen Zers, 77% of millennials and 67% of Gen Xers — have made a purchase in a virtual store. Such stores are widely seen as brands’ entryway into the metaverse

The majority of consumers who shop in a 3D virtual store find it highly engaging. Among respondents who had previously shopped online in a virtual store, 60% indicated that they are likely to do so again, including 54% of Gen Zers, 68% of millennials and 67% of Gen Xers.

Gamified Virtual Environments

Online video game platforms are key metaverse shopping environments: Nearly three-quarters (74%) of Gen Zers and 62% of respondents overall have purchased a digital item—such as an accessory, skin or garment for their avatar—within an online video game.

In addition, more than half of respondents (52%) said they would pay up to $49.99 for a virtual product for their avatar to use within an online video game.

When asked about their interest in exploring worlds, islands or environments created by their favorite brands in online videogames, 51% of Gen Zers and 44% of millennials indicated they would be very interested in doing so. This compares with 41% of Gen Zers and 38% of millennials who said they would be interested in exploring any metaverse environments brands create.

Not all consumers are clear on how the metaverse is defined: Just over half (53%) of respondents said they are very or somewhat familiar with the term metaverse, indicating that retail brands will need to establish clear messaging when it comes to describing their metaverse offerings to consumers.

Some 40% of all respondents think the metaverse is still in the conceptual stage, but that it will eventually take the form of connected online technology platforms that people will navigate using a digital avatar, while more than a quarter (27%) mistakenly perceive that the term metaverse refers to a technology owned by Meta, the parent company of Facebook.

Methodology

Obsess’s The Metaverse Mindset: Consumer Shopping Insights survey was fielded from 1,001 U.S. consumers who were surveyed online by Kantar from December 22 to December 29, 2021. Gen Zers are defined as consumers ages 16–24, millennials as ages 25–40, Gen Xers as ages 41–56, and baby boomers/silvers as age 57 and older.

There are varied predictions about the return of foot traffic to retail stores in the post-pandemic world, and the changing role of stores. Regardless of whether consumers visit stores more or less than before, increasing the ROI on retail space investments is a higher priority for brands than ever before. One way to enhance the scope and reach of your brick-and-mortar store is to digitize it. A photorealistic, 3D virtual version of your store can drive engagement and gain traction nationally and worldwide, whereas the brick-and-mortar is dependent upon regional, foot traffic.

Utilizing virtual and augmented reality (VR and AR) technologies, it is possible to digitally recreate physical stores in photorealistic, 3D e-commerce sites that includes both in-store and online inventory for a fully shoppable online store experience. Essentially creating a shoppable virtual tour of the retail store. These virtual stores are designed to drive discovery, engagement, click-through, session duration, average order value, and conversion for leading retailers and brands.

Benefits of Virtualizing Retail Stores

• Store becomes accessible to a wider audience 
• Remote shopping enabled
• Makes in-store inventory digitally accessible

Retailers can use the Obsess Experiential E-commerce Platform™ to virtualize their retail stores at a high resolution and with a fast turnaround time.

Neha Singh, CEO of Obsess, comments, “This is a very easy way to create a much richer experience for consumers online, because you already have your retail stores that you have constructed and merchandised with so much effort. A much wider audience can now visit your store, and shop it without having to physically go to the store.”

Ralph Lauren’s series of virtual flagships is a relevant example of transforming physical locations into 3D, immersive digital experiences. Ralph Lauren (RL) has virtual store recreations for their Boston, Beverly Hills, Hong Kong and Paris store locations. By visiting the Ralph Lauren website and by clicking on the “RL Virtual Experience” page, a visitor can travel around the world with Ralph Lauren virtually and be immersed in photorealistic renderings of their renowned and unique flagship stores in various locations. Customers can click on any product in the virtual store, and order it online, call the store or add it to their wishlist. The “RL Virtual Experience” serves as a new sales channel in addition to Ralph Lauren’s retail stores and e-commerce website.

Ralph Lauren Virtual Experience

Ralph Lauren’s digitization of their famous flagship stores around the world inspired American Girl to take a step forward in virtualizing their iconic stores, providing access to consumers everywhere. They decided to launch their virtual store to celebrate the brand’s 35th anniversary. The virtual American Girl Place is an immersive experience embedded in the brand’s website that allows customers to explore the brand’s store and shop from their computers or mobile devices.

Retail TouchPoints noted that “the results of American Girl’s virtual store have been clear, with high traffic across both experiences, strong engagement and solid click-through rates.”

The American Girl Virtual Experience

Now, American Girl customers do not have to travel to New York City to experience the magic of the flagship store, they can do it virtually from the comfort of their home. Customers can even partake virtually in the location’s most popular experiences including booking tables and parties at the American Girl Café. The ability to book reservations is made possible through an integration between the virtual store and the actual store’s reservation system.

Digitizing your brick-and-mortar store is a simple way to enhance its ROI. By virtualizing your physical store, you will reach a larger audience worldwide, enable remote shopping, and ensure your in-store inventory is digitally accessible. Learn more about how to create shoppable virtual tours of your retail stores. 

Pop-up stores have been a hugely successful retail strategy and revenue driver for many brands. However, they drive a finite amount of sales, dependent on the time span of opening and foot traffic in the area. Virtual stores are a solution to the restrictive nature of pop-ups as they maximize the potential of a pop-up store, making it accessible and shoppable from anywhere at any time.

Key benefits of a virtual pop-up: 

• Significantly widens audience for the pop-up store
• A virtual version can stay open longer than a physical version, driving sell-through
• Provides deeper insight into consumers’ interests and interactions with key data

An example of this is when multi-retailer MyTheresa created an immersive, 3D shopping experience for Moncler, powered by Obsess. Situated in the sprawling Alps is a 3D-rendered, photorealistic image of Austria’s Timmelsjoch museum, which houses Moncler’s collection as well as information on the history and culture of the area. Symbolic of the ethos behind outerwear innovator Moncler, it’s a future-facing design that also complements the natural world that surrounds it. The virtual experience has a pop-up that educates the user on Moncler’s origin story and shares the brand’s evolution story.

Below, we highlight other virtual pop-up experiences Obsess has created:

Terez Virtual Pop-up

Activewear brand Terez created a virtual version of their pop-up store in Soho New York. The virtual pop-up brought the Terez website to life with the vibrant colorful décor of the store. With Shopify integration, customers could shop products directly from the virtual store. Activations in the physical store were also digitized in interactive ways–in the virtual version, clicking on the leaves of the positivity tree brought up different positive affirmations.

Tommy Hilfiger Virtual Pop-up

Tommy Hilfiger created a virtual pop-up for an influencer collaboration with Zendaya. With their first experiential pop-up store in NYC, the shoppable virtual tour highlighted the 70s-themed zodiac-inspired prints and made all products digitally shoppable. Activations like tarot card readings and horoscopes were added as content engagement interactions.

Digitizing a pop-up store into a virtual store can serve as a valuable sales tool that also provides insightful data about prospective customers. To find out more information on how you can virtualize your pop-up store, click on this link.

Facebook’s rebrand as Meta underscored how timely it is for brands to build experiential e-commerce experiences in their business strategies. As the next generation of the internet, the metaverse is a connected, 3D virtual world for consumers to interact with everything and everyone in it. Users can shop, play games, learn and attend events, or use the space to hang out and socialize with one another.

That means, essentially, the metaverse is the new mall.

Morgan Stanley says metaverse gaming and NFTs will constitute 10% of the luxury goods market by 2030—a $56 billion revenue opportunity. Today, the largest metaverse platforms are Roblox and Fortnite—with 45 million daily active users and 350 million monthly active users, respectively. The metaverse will evolve quickly; new offerings that aren’t strictly gaming will emerge, drawing their own purpose-based communities of users.

Forward-thinking brands and retailers are already creating immersive e-commerce experiences such as 3D virtual flagship and pop-up stores. Technology advances empower brands to create immersive online shopping experiences that are richer, more dynamic and interactive than ever before.

Over the next decade, the spending power of today’s teenagers will increase significantly. This cohort’s expectations will define the future of experiential e-commerce within the metaverse. As digital natives who grew up interacting online, they’ll expect the entire shopping journey to be personal, interactive and customizable.

Here are 4 factors that will play a major role in defining the future of experiential e-commerce:

1. The Metaverse Is Taking Shape

Brands will create custom shopping environments on metaverse platforms that allow consumers to do more than just browse and purchase. Shoppers can interact with one another, with brands and their products, as well as design, clothe and accessorize their digital avatars, attend events and fashion shows and participate in other activities. According to a Wunderman Thompson Intelligence Report Into the Metaverse, “Digital engagement is moving from passive consumption to active creation–shifting creative power to the user.” 

The emerging class of products that bridge the physical and digital worlds will take center stage in the metaverse. Brands ranging from luxury leaders to CPG makers are already selling digital assets as NFTs and giving consumers the option to buy physical versions of some of the virtual items, too. Dolce & Gabbana, for example, recently sold a collection including both NFTs and physical items at auction for the cryptocurrency equivalent of $6 million.

The metaverse will evolve based on computer hardware and software advancement, including an increased ability to represent digital interfaces in immersive, 3D graphics that mirror the real world as opposed to the 2D interface typical on most e-commerce sites. Brands need to begin defining how they will represent themselves in the metaverse because shoppers—especially younger demographics—will expect to seamlessly engage with every aspect of their online lives throughout the connected virtual world we’ll inhabit.

2. E-Commerce Will Become More Natural and More Social in the Metaverse

Technology is driving a more futuristic e-commerce experience, to become much more natural, social and intuitive—such as in real life. In real life, such as in malls, we often shop in the company of others. Shopping in a 3D, photorealistic virtual store with a few pals who can provide real-time advice via live video about a particular fall jacket or shade of lipstick will soon become the norm. Shoppers and their avatars will be able to see, hear and follow each other throughout virtual stores, providing inspiration and feedback to one another.

This social shopping capability will go beyond what consumers have come to expect from the livestream shopping experience. Participants will be able to choose who they want to invite to a private shopping outing in a virtual store and interact with influencers and sales associates via video or avatars in the immersive environment.

3. The Lines Between Gaming and Shopping Will Vanish

The largest gaming platforms have built-in communities of players where brands can find new audiences for their products. Younger generations of consumers likely grew up playing multiplayer video games and watching esports. They already expect to be able to interact with other people and brands everywhere they go online. In the future, consumers will expect their entire shopper journey, including virtual stores, to be customized and rendered dynamically.

Brands, from Ralph Lauren to Gillette, have enabled consumers to obtain virtual clothing, accessories and skins to personalize avatars in various games. The next step is full integration of e-commerce shopping and gaming. Brands across price points are already seeing strong consumer engagement with their immersive virtual store experiences.

4. VR Headsets Will Make Shopping Irresistibly Immersive

Virtual reality headsets like the Oculus, faced some stumbles in consumer adoption when they first hit the market. But the technology has rapidly improved and the pandemic has proven a tailwind for the devices. Consumers flocked to multiplayer video games and online fitness platforms while stuck at home during lockdowns; there’s now a new audience that knows firsthand how much more exciting and realistic virtual worlds can be when experienced through a VR headset.

Statista forecasts more than 26 million AR and VR headsets will be sold each year by 2023. A recent survey found that nearly a quarter (23%) of Americans have now used one of the devices. VR headset ownership still skews male, but with large numbers of women continuing to join at-home online fitness platforms, the ratio is shifting.

Some brands are already building headset-enabled experiences into their e-commerce and in-store strategies. Shopping with a VR headset is an immersive experience that can’t be replicated on a laptop or mobile phone.

Morgan Stanley states in their “Luxury in the Metaverse” report, “It is no surprise that gaming tends to be a past-time for younger consumers and likely always will be. The transition to fully immersive virtual reality (VR) Metaverse experiences also naturally lends itself to the same younger cohorts. VR is not a prerequisite for Metaverse experiences, nor gaming platforms; yet it adds to the immersive experience, encouraging longer game time.”

The Takeaway

As retail companies experiment with novel ways to sell, reach new consumer audiences, and drive sustainability, interactive shopping experiences will become table stakes for brands in every category. We’re quickly moving toward online store environments that feel as sensorially rich and immersive as physical stores, and as personalized. Companies are already building and hosting branded, 3D virtual worlds on their own websites and these spaces will be part of metaverse platforms in the near future. By creating their own visually unique virtual planets, islands, stores and more, these brands are presenting products in a discovery-driven manner that’s never before been possible online.

One of the things that sets these future-looking companies apart is that they’re thinking about virtual selling organizationally and creating specific line items for experiential e-commerce in their budgets. It’s key for all brands to have three- to five-year plans for their experiential e-commerce and metaverse initiatives. Technology enabling these experiences are evolving quickly. Brands will have to watch the space closely to see which developments align with their goals, business model and target audiences, and invest accordingly.

At some point, the word “metaverse” will fall out of common use, just as “cyberspace” has over time. We’ll all just refer to immersive virtual spaces as “the internet” rather than a separate part of it. Having a presence in this virtual world will be as important as having an e-commerce website for brands.