Metaverse for Ecommerce: What Retailers Need To Know

April 19, 2022

The Bolt Team

Guy wearing VR goggles as he explores the metaverse

It’s not every day that leaders of the largest companies rally around a single idea, but that’s what has happened with the metaverse. In recent months, both Meta’s Mark Zuckerberg and Microsoft’s Satya Nadella announced their intentions to enter the metaverse in a meaningful way. 

Given this type of fanfare and the billions of dollars that have already flooded into related projects, many believe the metaverse will revolutionize every aspect of daily life—from how we work to how ecommerce brands reach new customers. 

For retailers, the move into the metaverse will usher in a new era of retail, not unlike the decades-long shift from brick-and-mortar to ecommerce. Here’s everything retailers need to know about the metaverse. 

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What is the metaverse?

Most peoples’ understanding of the metaverse comes from what they see in pop culture, read in literature, or hear from technologists. Think about blockbuster movies like Ready Player One and The Matrix. The protagonists in each float between a dystopian physical world and a high-tech virtual reality to save humanity from an existential threat. This convergence between the real world and digital world is meant to showcase the metaverse’s true potential. 

But the earliest portrayal of the metaverse didn’t originate under the bright Hollywood lights. Instead, it was born in the imagination of best-selling author Neil Stephenson, who coined the term metaverse in his 1994 novel Snow Crash. The book tells the story of Hiro Protagonist, a pizza deliveryman and sophisticated hacker, in his quest to stop a drug/virus from consuming both the physical and virtual worlds. 

Stephenson’s depiction of the metaverse has since become the yardstick for a fully-functioning metaverse, where users can glide into the virtual world to do everything from buying real estate to hosting meetings.

Why is the metaverse possible today?

Even though many have chased this idea, no one has come close to making it a reality. What always stood in the way was technology. Internet speeds were not fast enough. Virtual reality capabilities were too rudimentary. And blockchain technology was still in its infancy. 

All that has since changed. These technologies that make up the metaverse are now in a place where the metaverse is more realistic. 

  • Cloud computing: The immersive experiences in the metaverse require a certain amount of storage and processing power to support a virtual reality universe. Today companies like Nvidia are making that possible. The global semiconductor company recently launched Omniverse Cloud, a suite of cloud services that give 3D creators and designers a platform to create life-like simulations in the virtual world. In other words, a meaningful onramp into the metaverse. 
  • Virtual and augmented reality: Long gone are the days when Google Cardboard was the most advanced virtual reality product available. With products like the Meta Quest 2, you can now immerse yourself into entirely new worlds where you can build, shop, and play.
  • Blockchain technology: Many see blockchains as an integral part of a well-functioning metaverse. The technology promises to solve issues of interoperability, proof of ownership, value transfer, and governance. Pretty much everything you’d want in a physical or digital economy. 

The maturation of technology has led multiple heavyweights to develop their own metaverse experiences, including Decntraland, Axie Infinity, Fortnite, and Roblox, to name a few. 

Why should ecommerce businesses care about the metaverse?

The metaverse may sound like a digital playground reserved for gamers and technologists, but it will mean more to more people. In its most realistic form, the metaverse lays the foundation for a new digital economy, where users can create, buy and sell goods. And in its more ambitious form, users will be able to bring their virtual items and identities from one platform to another. 

Either scenario creates a compelling reason for retailers to think about the metaverse, and the data supports this optimism. 

A recent Google survey found that 66% of people are interested in using AR for help when shopping, and merchants who add 3D content to their product pages see as much as a 94% lift in conversion rates.  

What’s more, Gartner found that 25% of people will spend at least one hour a day in the metaverse by 2026. What they do in that time will include shopping and entertainment. 

So it only makes sense that retailers share the enthusiasm of metaverse advocates. The metaverse promises to be a place where people will spend time and spend money. This can benefit retailers in some obvious and not so obvious ways. 

1. Establish a fast-growing revenue stream

Today’s retail channels are primarily divided into ecommerce and brick-and-mortar. The former covers more modern forms of shopping like online shopping, mobile shopping, and live streaming. And the latter is what we think about when we go to the grocery store each week. 

With the introduction of the metaverse, retailers can add a third channel to their existing toolkit. And this one may even surpass the previous two in terms of sales and profitability. A recent study found that 71% of shoppers found AR a compelling reason to shop more often, while 35% said they would shop online more if there were a way to try stuff on virtually. 

We’ve already seen consumer brands make headway on this front. For example, Sephora’s Virtual Artist uses AR technology to let customers try on cosmetics products before making a purchase. But these types of tools are just the tip of the iceberg. Soon, shoppers will be able to test products or try on clothes on virtual avatars with similar physical attributes as their own. 

2. Foster a more inclusive community

These days, building a retail business requires more than just pushing products on mobile, desktop, and social. Often, customers are more interested in the community and purpose-driven initiatives that a brand stands for. So to build trust and loyalty, especially with younger generations, brands need to demonstrate that they understand and value consumers’ priorities. 

A common way retailers do this is with promotional giveaways and exclusive events. In the metaverse, that has come in the form of non-fungible tokens (NFTs). Retailers drop exclusive product launches or exclusive access to content for passionate fans who purchase their NFTs. 

There’s no shortage of big-name brands that have launched NFTs, including Nike, Coca-Cola, and Adidas. 

The other, perhaps more interesting, retail initiative in the metaverse is live events. In late 2020, Lil Nas X hosted one of the first concerts in the world-building game Roblox, which recorded over 33 million viewers over two nights and almost eight figures in digital merchandise sales. That’s a lot of virtual t-shirts. 

3. Perform market research at little to no cost

As the physical and digital worlds blur further together, retailers could use the metaverse as a way to learn about customers’ real-life preferences. For instance, retailers could test products in the metaverse before producing a similar version in the real world. And similarly, shoppers could use the metaverse to try out products before making a purchase. 

Metaverse Fashion Week is a prime example of how this may play out. The high-profile fashion event in the metaverse brought together some of the most well-known brands in what mirrored the glitz and glamor of NY Fashion Week. It’s unclear how Gucci, Ralph Lauren, and other brands will leverage the insights from the events but don’t be surprised if real-life versions of the notable digital styles crop up soon.

Examples of ecommerce businesses using the metaverse 

The idea of a fully-functioning metaverse that mirrors the Oasis in Ready Player One may be years away. Yet many retailers have already made strides at selling and showing up in this early version of the metaverse.

There are countless examples of brands using NFTs to generate awareness, foster loyalty, and sell collectibles.  

And more recently, we’ve seen brands take groundbreaking steps in how they sell in the metaverse. Samsung recently opened its doors to Samsung 837X, an immersive world hosted in Decentraland and modeled after the flagship Samsung store in Manhattan. As part of the experience, users will be able to explore a new Connectivity Theater, Sustainability Forest, and Customizable Stage, where guests can attend mixed reality dance parties and other live events. 

Other innovative use cases include Nikeland in Roblox, Gucci Garden, and Dyson Demo VR. The latter, in particular, showcases an immersive 360-degree virtual reality experience where users can test Dyson products without leaving their homes—a practical way to combine virtual reality and a physical product. 

The potential for retail in the metaverse is endless. And as the metaverse evolves, brands will find new and innovative ways to bring the in-store experience to those who prefer online shopping. 

Is the metaverse right for you?

The promise of a fully-functioning virtual world sure sounds exciting, especially if you work at a multinational retailer with a significant marketing and tech budget. 

But if you’re like the millions of small business owners without the resources to launch moonshots, the metaverse should be viewed as “not now, but soon.” Today, your top priorities should be to give customers a frictionless checkout experience on your website and expand your reach beyond your owned physical and digital platforms. That is creating shopping surfaces on social media, at live in-person events, and anywhere your shoppers spend time.   

Bolt partners with thousands of retailers who want to make these moves. Our industry-leading one-click checkout improves the customer experience on retailers’ sites, and with Checkout Everywhere, you can now bring that same experience to concerts, bus stops, social media, and much more. 

And when the time comes to enter the metaverse, Bolt will be there to bring the same seamless checkout experience to the virtual world.

ThinkShop by Bolt does not constitute professional tax or financial advice. Contact your own tax or financial professional to discuss your situation.