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The Metaverse 1 of 3… Next-Gen Shopping And Customer Experiences
02/27/22

The Metaverse 1 of 3… Next-Gen Shopping And Customer Experiences

Accompanying PSFK's latest report, Retail Strategies for the Metaverse, will be a metaverse report on marketing and brand experience strategies, plus another that studies the underlying infrastructure and tools laying the foundations for commerce in the virtual world.

The idea of the metaverse has captured the attention of brands, retailers, media companies, marketing agencies, and technology platforms. Pioneering business leaders, investors, and entrepreneurs see new opportunities to stake their claim in an as yet-to-be-defined space that promises to revolutionize the internet and what it means to be online and completely change the way people work, play, learn, and shop. 

Some imagine virtual reality goggles as the key entry point into immersive worlds that seamlessly combine elements of gaming, social media, entertainment, and retail, where users are embodied as avatars of their own design. Others believe society already exists in some version of the metaverse by virtue of the ubiquity of always-on mobile devices and the ability to tap into digital content and experiences from anywhere at any moment. These opposing points of view begin to converge with the widespread adoption and use of augmented reality and hands-free computing protocols like gesture and voice. 

Whichever vision of the future you ascribe to, it's clear that the lines that delineate on and offline behaviors and physical and digital worlds have nearly eroded, as people slide further into fluid, hybrid lifestyles with many ceasing to make distinctions between the two.

Alongside the excitement and wild speculation associated with the metaverse itself, there has been an almost equally meteoric rise around topics like web3, NFTs (non-fungible tokens), cryptocurrency, and DAOs (decentralized autonomous organizations), which are often hard to separate from the broader conversation. These ideas will most certainly play a key role in shaping how people experience the metaverse moving forward.

As always, PSFK seeks to help frame how our audience understands and thinks about an emerging space like the metaverse by looking at the experimentation taking place, listening to expert POV, and tracking consumer sentiment to identify key insights and highlight emerging trends. In part one of our three-part series ‘Exploring The Metaverse Opportunity’ we deep dive into the ways pioneering companies are reimagining the retail, shopping, and product experience. Through the lens of seven trend-led strategies, our researchers look at immersive commerce on platforms like Decentraland and Sandbox, IRL stores with embedded experiential layers, and the ways digital goods elevate the brand-customer relationship and beyond. 

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Accompanying PSFK's latest report, Retail Strategies for the Metaverse, will be a metaverse report on marketing and brand experience strategies, plus another that studies the underlying infrastructure and tools laying the foundations for commerce in the virtual world.

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Insights Driving Metaverse-Based Retail 

Gaming is the gateway to the metaverse for most consumers, but many are open to other experiences, particularly social media.

To date, most US consumers' experience with virtual worlds has been through video games. 4x as many adult Americans have experienced virtual world spaces through games rather than through a purpose-built metaverse experience.
PSFK US Metaverse Retail Experience Survey, 2022 

The metaverse is seen as a place for gaming experiences. 70% of US adult virtual world users like to play games in virtual worlds – but they are also keen to connect with friends (43%), access content (39%) or learn about new things (29%).
PSFK US Metaverse Retail Experience Survey, 2022 

Shopping inside metaverse stores is growing in interest among consumers.

Commerce isn't a significant reason to attract users to the metaverse. When compared to a list of reasons that people visit virtual worlds, only 26% like to go shopping and only 15% want to run a business or do work. When visiting a business in a virtual world, only 40% go there to shop – and more would prefer to get special offers (51% of US adult virtual world users).
PSFK US Metaverse Retail Experience Survey, 2022 

Leading-edge consumers are keen to learn more about products and make purchases when shopping in virtual retail experiences.

Product trial and education present a significant opportunity to retailers and brands in the metaverse. 50% of US adult users who interact with businesses in a virtual world want to learn about services or try on products.
PSFK US Metaverse Retail Experience Survey, 2022 

To truly take advantage of the retail opportunities presented by the metaverse, companies need to elevate the customer experience beyond the purely transactional nature of traditional e-commerce.

More than six in 10 (62.7%) respondents prefer visiting a store in the metaverse rather than traditional online shopping.
The Metaverse Mindset: Consumer Shopping Insights, Obsess, 2022

As avatars become the dominant way for consumers to represent themselves and interact within metaverse environments, digital goods present a significant sales opportunity. 

33% of all users like spending time in the metaverse updating the way their avatar looks (although this figure is less for ‘body-less' VR users (29%) vs non-VR users (37%)).
PSFK US Metaverse Retail Experience Survey, 2022

​​One-fifth of Roblox’s daily active users — or 8.6 million — update their avatar on any given day, which points to the importance of self-expression.
‘Shaping online avatars: Why our digital identities differ,’ Vogue Business, 2021

Without the constraints of physical supply chains and inventories, digital goods create lower barriers to entry for brands and creators.

“Without the physical limitations that exist today that put pressure on businesses' bottom line, things like real estate, supply chain and geographical reach, the metaverse will open up more opportunities for businesses to make money.”
Vishal Shah, Head of Metaverse, Meta 

The inherent flexibility and dynamic nature of digital goods present new opportunities for companies to completely rethink product experience and utility for their customers. 

There appears to be a strong demand for cross-world shopping. Over 48% of US adult virtual world users can see themselves buying products that “I can use both in the real and virtual world.” 36% would buy products in a virtual world that they can only use in the real world, and 30% would buy vice-versa.
PSFK US Metaverse Retail Experience Survey, 2022 

At the leading edge, companies see digital goods and NFTs as a new touchpoint for identifying their most loyal fans and engaging them with exclusive rewards, experiences and services.

“One of the consequences of Web 3.0 is that data will belong to users. This will shake up CRM and therefore e-commerce if [Web 3.0] becomes the dominant reality.
François-Henri Pinault, Chairman, Kering

PSFK US Metaverse Retail Experience Survey
The PSFK quantitative survey was conducted February 24-25, 2022. The audience were US adult users of virtual worlds aged between 18 and 65 years old. The survey was a ‘basic census’ balanced in terms of age and gender. The 451 respondents had household income between $0-$200k.

Key Strategies for Retail in the Metaverse

In-World Product Drop
In an effort to drive hype around newly launched or limited edition products while simultaneously expanding access to a wider audience, companies are replicating the product drop experience in the virtual world. Within these activations, logged-in shoppers have the opportunity to be the first to learn about and buy exclusive digital and physical goods, as well as socialize with fellow fans, influencers and brand representatives. In addition to driving sales, this approach has the added benefit of driving greater engagement and interest in metaverse brand experiences. 

To coincide with CES and the launch of its Galaxy S22 products, Samsung Electronics America debuted Samsung 837X, a metaverse stage and experience modeled after the company’s New York City flagship. Built within the 3D virtual world browser Decentraland, 837X features a Connectivity Theater, which served as a direct link to Samsung’s CES stage, relaying news and details from the event regarding the company’s latest products. To attend Samsung’s event, consumers were able to sign up by either using their crypto wallet or simply logging in as a guest. After arriving at the event, attendees were able to also personalize their avatar with hairstyles, clothing and accessories, all of which could be purchased within the virtual flagship. Along with live product drops, Samsung’s metaverse hub also featured quests within its Sustainability Forest that led to exclusive NFTs, and a live mixed reality dance party on the Customization Stage. 

Meta-Layered Stores
Shoppers have already become accustomed to using their mobile devices when shopping in-store to access product information and content. To lean into these behaviors, retailers are integrating entertainment, gaming, and other dynamic elements into the physical shopping occasion. This seamless layer of digital interactivity creates a truly hybrid experience that brings the store and its products to life in exciting ways. Beyond this new level of engagement, forward-looking retailers are also setting up ways for customers to view and purchase digital items from artwork to fashion for collecting or use in virtual worlds.

Following its metaverse debut, activewear and lifestyle brand Nike is connecting its Nikeland Roblox activation to the in-store experience within its NYC House of Innovation flagship. The augmented shopping experience leverages shoppers' mobile phones to activate the Nikeland portal within the store, layering digital experiences from the brand’s metaverse world over the sales floor. In-store shoppers can be transported into the Nikeland Roblox via a large display that’s connected to a body scanning camera and allows up to four guests at a time to play a round of “Roblox Basketball.” Additional games can be activated throughout the space by scanning a Snapcode. Snapchat lenses allow users to alter their 3D avatar, tap into an AR-enabled round of “Floor is Lava” or Pachinko Obby Ball, two games featured within Nikeland Roblox. 

Immersive Demoing
Within the digital commerce landscape, enabling customers to understand attributes like fit, features, and performance in the absence of a physical product is an ongoing challenge. To overcome this, retailers and brands are experimenting with a range of rich media solutions from AR applications to fully built-out immersive simulations that allow shoppers to get ‘hands-on’ with a product before choosing to buy. Because these experiences are digital there are further opportunities to layer in 1:1 service or make them social/shareable to further boost shopper engagement and confidence. Additionally, these virtual trial moments enable data capture connected to consumer behaviors, which can be leveraged to drive future product decisions and potentially identify unmet needs.

To showcase its latest concept cars, autonomous automobile technology company Hyundai Mobis developed an interactive display for both in-person and remote guests of CES this year. For those tuning in to the event from home or the office, Hyundai Mobis created a virtual showroom, JOYTOWN, where journalists, industry experts and tech enthusiasts could create a personal avatar and explore virtual models of the M.Vision POP electric vehicle and the hydrogen fuel cell M.Vision 2GO. Along with getting an up-close view of the vehicles, Joytown visitors were able to test-drive each within real-life simulated situations. 

Cross-World Commerce
In anticipation of a future where consumers are spending more of their time inside of metaverse worlds, companies are experimenting with next-gen digital commerce experiences that enable shoppers to virtually browse and buy products in immersive retail environments and have them delivered to their homes. These virtual stores can range from realistic 3D representations to creative, game-like experiences that push the boundaries of physical conventions. In addition to interacting with products, customers can speak to brand representatives and fellow shoppers and attend hosted experiences and events.

Quick service restaurant chain McDonald's is exploring opportunities around virtual restaurants and how they can engage eaters within these spaces. Based on recent trademarks from the QSR brand, McDonald’s is going beyond ordering virtual food in a virtual world, and instead connecting the experience to the real world. Consumers within McDonald’s’ metaverse-based location will be able to place an order virtually and have items delivered directly to their door without ever having to leave the metaverse. Signaling future virtual activation alongside their metaverse store, the food chain has also submitted trademarks for entertainment services such as virtual concerts, NFTs and more. 

Direct-To-Avatar
As avatars become the dominant way for people to represent themselves in metaverse worlds and investments in virtual real estate begin to boom, there is a growing demand for digital goods from clothing and accessories to artwork and furnishings to shape a personal style and aesthetic. Both established brands and up-and-coming designers are stepping in to create digital copies of real-world products and in some cases purely virtual items that look beyond what’s possible in the physical world. Digital goods offer a new paradigm for not only design but also reconsidering ideas around brand value, luxury, and sustainability. While these items are already being sold in traditional digital marketplaces, many companies are also building out creative virtual shopping experiences that offer new levels of interaction and trial. This mainstreaming of digital identities and lifestyles presents new opportunities for brands and retailers to directly engage existing customers and more aspirational audiences in novel ways. 

With the purchase of a virtual plot of land in The Sandbox, luxury Italian retailer Gucci is one step closer to offering an interactive brand experience in the metaverse. Building on its online concept store Gucci Vault, which includes the brand’s NFT products and virtual goods, the dedicated space within Sandbox will allow the brand to sell digital goods directly to their brand fans and followers. To shop with Gucci in the metaverse and be able to wear fashion items within the game, Sandbox players will be able to use cryptocurrency in the form of SAND tokens. Along with digital shopping opportunities, the virtual Gucci destination will feature an interactive maze and a space to host conversations about fashion and the metaverse.

Dynamic Product Experiences
Digital goods and NFTs offer a new paradigm in product ownership. By virtue of their programmability and connectivity, brands, artists and designers are rethinking how virtual items can be updated and altered over a lifetime, while also serving as an ongoing customer touchpoint. Some creators are offering product editions that carry different levels of utility and customization, while others are considering how remixing multiple purchases can be used to unlock new versions or experiences, which can even crossover into the real world. As these digital goods change or disappear from circulation, they change in value, which can also impact the broader marketplace. These early experiments point to the potential for virtual products to offer more dynamic experiences and fundamentally change the relationship between customers and makers.

After selling 30,000 “Into The Metaverse” NFTs to loyal fans and brand enthusiasts on the promise of future benefits and access, athleticwear brand Adidas Originals has begun unlocking exclusive products for holders. Throughout a total of four phases in 2022, also known as product redemption periods, Adidas NFT owners will have guaranteed access to claim exclusive physical products at no additional cost. Items available include a Firebird tracksuit, a graphic hoodie and a beanie, all co-created with brands like Bored Ape Yacht Club, Punks Comics and crypto consultant GMoney. To level up to the next phase or claim a product, NFT holders go to the Into The Metaverse website, connect their crypto wallet to verify ownership and phase level, and will be able to then access the items. As they move from one phase to the next, their NFT will also automatically change color, signifying their standing in the overall process. Looking ahead, the sportswear brand is planning to continue offering additional experiences and perks for their NFT community, delivering ongoing value for their most loyal customers. 

Ownership Privileges
Brands are looking to expand their relationship with customers beyond a single transaction by treating ownership as the gateway to a valuable ecosystem of experiences. Within the emerging world of digital goods and NFTs, the purchase of a limited edition brand token or asset grants the holder access to exclusive privileges that can range from members-only events to first dibs on product drops. This model fundamentally rethinks the value of purchase beyond its utility, while creating a new way for companies to identify their most engaged customers and interact with them on an ongoing basis.

Cameo, the celebrity shout-out company where fans can pay to have favorite recording artists, actors or reality TV stars create short, personalized video messages, is adding NFTs to their offerings. Starting in February 2022, fans of the platform’s 50,000 influencers, professional athletes, musicians and actors can mint a Cameo Pass through the peer-to-peer NFT marketplace OpenSea. Costing about $550, each NFT will give fans exclusive access to real-life Camero events, such as meet-and-greets, merchandise drops, and celebrity Q&As. Cameo Pass is one of many new ways Cameo is helping connect fans to talent directly. 

Key Solution Providers Powering Metaverse Retail

Decentraland
https://decentraland.org/ 

Bitski
https://www.bitski.com/

Vurvey
https://vurvey.co/ 

Yahoo Ryot Lab
https://www.linkedin.com/company/ryot/ 

Yahoo Immersive
https://www.yahoo.com/lifestyle/tagged/immersive/ 

Neon
https://neonapp.com/

The Sandbox
https://www.sandbox.game/en/ 

Roblox
https://www.roblox.com/

Dapper Labs
https://www.dapperlabs.com/

Genies
https://genies.com/

Exclusible
https://exclusible.com/

Venly
https://www.venly.io/ 

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Accompanying PSFK's latest report, Retail Strategies for the Metaverse, will be a metaverse report on marketing and brand experience strategies, plus another that studies the underlying infrastructure and tools laying the foundations for commerce in the virtual world.