The metaverse: a new era for retail?

The Metaverse is one of the world’s most talked about emerging trends, dubbed the “successor to the mobile web” by Mark Zuckerberg, CEO of Meta. But what exactly is the metaverse?

It is a group of 3D virtual worlds built by several companies and focused on social connections, merging physical and digital environments. Using virtual and augmented reality tools, it promises to give users and brands a new place to work, learn, play, shop and create – an “Internet incarnate”.

Zuckerberg renamed Facebook’s parent company to focus on putting the Metaverse at the heart of everything the company does. This enables the company to offer its 3.6 billion monthly active users a scalable virtual world across all social apps, transforming mobile commerce. This prompted many big brand retailers to sit up and take notice. The possibilities for providing new and existing users with exciting new shopping experiences in a new dimension of e-commerce are endless.

The Metaverse has the potential to reshape the way major brands interact with their customers. However, a key question that remains is: what are the opportunities – and threats – for retailers trying to bring exceptional customer experiences from the physical and traditional e-commerce world to the virtual world?

How can the Metaverse improve the customer experience?

More and more merchants are trying to deepen their customer relationship by experimenting with the Metaverse to replicate the in-store shopping experience. Ralph Lauren, H&M, and even Kaufland and Walmart have recently talked about launching Metaverse stores where customers can virtually interact and try on clothes, with the choice of buying them physically or digitally. The merging of the physical and digital world offers a new level of shopping. Samsung, for example, unveiled its virtual store inspired by its physical location in New York last September. The virtual world offers brands a new space where new products, styles or colors can be trial-tested in a digital store environment to gauge consumer interest before the products are physically produced. Connecting the digital and physical worlds offers the benefit of being able to place orders more accurately, reduce excess inventory and respond to customer requests in a more targeted manner, which improves the customer experience across all channels.

Known as “digital twinning”, virtual versions of homes, shops, offices and customers are created, enabling a seamless relationship between the physical and virtual worlds. This allows consumers to purchase products such as B. IKEA furniture to view and interact with in their own homes. You will also be able to visit virtual replica retail stores and try out products before buying them. These future possibilities could significantly reduce return rates for businesses and improve the overall customer experience by leveraging the real world through the virtual.

Additionally, Metaverse users have the ability to create avatars that may differ from the user’s reality in terms of identity, style, and societal choices. The ability for consumers to have multiple identities in the metaverse provides merchants with the ability to interact with an increasingly diverse audience, each with different needs. New consumer groups will emerge and new methods will be needed to reach them. The task of merchants will be to convert existing physical consumers into digital consumers and conversely to convert new digital consumers into physical consumers. It makes sense for brands to embrace this innovative technology and discover the incredible possibilities of this experimental playground as the next step in their e-commerce roadmap.

Uncertainties in the Metaverse

What is certain, however, is that the metaverse is still uncharted territory. Consumers want to try exciting and innovative technologies, but it is incumbent on companies to minimize potential risks as much as possible, just as consumers would expect in the real world. If they don’t, they expose themselves and their customers to attack and fraud.
The ability to create multiple identities in the metaverse gives scammers the ability to create fake profiles and place fake offers on items. Automated bots could impersonate legitimate users and generate unnecessary digital traffic that can slow down these virtual spaces, much like the business of resellers in the real world.

At a time of great uncertainty in the metaverse, merchants need to build a high level of trust with consumers to allow them to safely explore and enjoy new environments. It’s unclear how fraudulent activity thrives in the metaverse and how it can be monitored – in any case, merchants should proactively prepare for all possibilities. For brands to continue innovating in their customer relationships and experiences, retailers need to understand who their customers are and connect real personalities to digital personalities through the use of automated identity-based technologies. This allows merchants to react quickly and proactively to new and emerging threats. However, the current lack of regulation could make it easier for cybercriminals.

Payment processing and regulatory actions in the Metaverse

Blockchain technology provides the security and scalability needed to operate a secure, global, peer-to-peer payment network. However, it also poses challenges for regulators. A global system of interconnected nodes, where transactions take place around the world, raises the question of how a virtual environment like the metaverse can be regulated. Do businesses have to comply with the laws and regulations of multiple countries? Who has the power to make decisions in this virtual reality?

Another bone of contention is authentication: how can users identify legitimate merchants and products? This is where NFTs might provide the answer. A patent filed in 2019 by Nike links the shoes to the Ethereum blockchain, providing proof of the authenticity of physical goods. This not only provides proof of authenticity for items, but also a method brands could use to link physical and digital goods.

With cryptocurrencies potentially becoming the preferred method of payment in the metaverse, businesses need to consider how to respond to this development. Because it is an emerging currency but not yet widely adopted, retailers that only use cryptocurrency as a method of payment could alienate the general public who cannot or do not want to use cryptocurrency. change.

If traditional payment processors decided to operate in the metaverse and offer consumers the option to buy with real money, how quickly could the entire payments ecosystem be able to adapt and reliably authenticate transactions? Mastercard has already announced its intention to extend its payment processing systems to the Metaverse.

Will it be traditional means of authenticating payments, or will automated identity-based solutions be able to bridge the gap between real consumers and their digital counterparts? Either way, the general uncertainty surrounding regulations and payments in the metaverse underscores the need for caution and adaptability.

The future of the metaverse

The Metaverse could mark the biggest upheaval in the retail market since the pandemic-driven digital commerce boom. The unknown of the metaverse creates a dichotomy of opportunity and potential danger. While it is still too early to fully assess the impact, the winners of the Metaverse will not necessarily be the first, but rather those who can create a safe environment and provide a unique experience for their customers.

Leave a Comment