The future of online shopping gets real with AI and machine learning
AI and machine learning have starring roles in the future of online shopping. Retailers that leverage these technologies effectively can build brand loyalty for years to come.
What is the metaverse? It depends whom you ask, but the term was first defined by novelist Neal Stephenson. In his 1992 novel, “Snow Crash,” Stephenson imagined a digital space where gamers use headsets to interact with other players in a virtual-reality landscape.
Enter – for better or worse – our new reality, where the metaverse does indeed exist, no matter how badly some of us want to pretend it doesn’t.
What is the metaverse: Definition
The metaverse melds physical, augmented, and virtual reality to create a computer-generated environment where users can interact, purchase items, game, and have experiences like they would in the real world.
Users enter the metaverse via virtual reality. Upon entering, AR and VR allow visitors to see objects, people, landscapes, stores, and more environments projected around them, as well as engage in those environments.
The metaverse doesn’t refer to a particular kind of technology, but instead represents how humans interact with technology.
Early examples of the metaverse
The metaverse has the potential to forever change the customer experience and how consumers interact with brands.
Mark Zuckerberg is placing such a heavy bet on the future of virtual reality that he renamed Facebook “Meta,” dubbed its employees “metamates,” and invested $150 million in accelerating the metaverse.
While Zuckerberg may daydream about a world in which humans adopt avatars and move through a series of virtual worlds to socialize, play, shop, learn, and work, other brands are more tactical in their approach.
Gaming platforms are already deep into the metaverse (remember the Sims?), and the pandemic gave them a big boost. Isolated humans across the globe enjoyed the metaverse-esque experiences of Animal Crossing: New Horizons and Fortnite, which provided a glimpse into the future.
Some people see the metaverse as a utopia in which a creator’s economy centered around non-fungible tokens (NFTs) can grow and thrive, but more concrete benefits are emerging for consumer brands and retailers.
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Retail potential in the metaverse
Shopping experiences are an ideal use case. The global pandemic highlights the ways in which retailers need to accelerate the VR experience to survive and thrive in an increasingly virtual world.
To date, many retail metaverse use cases are experimental, but brands that get in on the action early will have an easier entry. E-marketer identified three retail categories with high potential in the metaverse:
- Fashion
- Beauty
- Home goods
In their 2021 survey, 27% of responders said they would be interested in trying clothing via AR/VR before making a purchase, and they’d also give furniture (23%) and home appliances (22%) a spin in the metaverse before buying the real-world version.
While these numbers represent a fraction of global consumers, the digital-first buyers in Gen Z and Generation Alpha are primed to exist in a metaverse future.
This post-analog generation is pre-conditioned to engage with the metaverse and are already highly literate in the world of avatars and digital identities. These digital twins give users the opportunity to carefully curate their online personas, including how they dress, called “skins” in the gaming world.
More than 80 percent of U.S. gamers between the ages of 13 and 45 are aware of skins, and the estimated market for them is a whopping $40 billon annually. Holy untapped potential, Batman.
Looking ahead, we can even see the metaverse as a path to a more sustainable future. Climate change, global pandemics and geo-political upheaval are creating a society that is largely sheltering in place. Retailers who embrace the concept of digital goods will emerge as winners with Gen Z and Gen Alpha, who favor sustainable brands.
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Metaverse pioneers: Retailers embracing the next generation of commerce
The list of retail brands jumping into the virtual pool of the metaverse is expanding day by day. Here are a few:
Nike: In late 2021, Nike acquired RTFKT, an NFT studio that creates digital collectibles. RTFKT was already producing digital sneakers, making the acquisition a no-brainer for perhaps the world’s most recognizable athletic-shoe brand. Nike recently filed several new trademark applications that signal a fast-approaching launch of digital gear for the metaverse.
Coca-Cola: The beverage brand designed its first NFT in collaboration with Tafi. The metaverse collectibles were designed in celebration of International Friendship Day and consisted of a loot box on OpenSea. The NFT was auctioned off and contained virtual apparel for use in Decentraland. Designed to look like a futuristic version of the classic Coke vending machine, the NFT included a variety of branded merchandise like the Bubble Jacket Wearable.
Selfridges: The venerable, high-end British department store Selfridges teamed up with Charli Cohen, maker of NEXTWEAR, which designs and manufactures “limited quantities of physical fashion” in the UK and Shanghai. The brand also creates digital versions of their goods for use in gaming and the metaverse. Together with Selfridges and Yahoo RYOT Lab, they created a virtual city to celebrate 25 years of Pokemon. Visitors can shop for both digital and physical goods, including four digital garments to wear in a Snapchat lens.
Zara: The global fast-fashion brand Zara announced a partnership with clothing label Ader Error to join the South Korean metaverse known as Zepeto. The collaboration will result in the AZ Collection, which will be available in both the physical world and the metaverse.
Other brands are looking to the metaverse to show off their products. AR and VR offer a new channel for how-to content meant to influence and cajole customers into buying. For example, Dyson, a maker of pricey hair tools and high-end household cleaning gadgets, created a showroom available as an app via Meta’s Oculus store.
Big winners in a metaverse future
Industry experts see the potential of the metaverse to not only create rich, intense, and seamless customer experiences that can span the physical and digital worlds, but also to collect valuable new data points for understanding the customer in a cookie-less world.
PWC posits that the implications of the metaverse are far-reaching, but stops short of calling this virtual world a revolution. Instead, consider it an evolution.
The idealized version put forth by big tech may never come to fruition, but that doesn’t by any means preclude a future (and present) that uses the current metaverse technologies and platforms for practical applications in an increasingly digital world.
So, grab your headset, pull out your digital wallet, and get ready.
