What Should Retail Look Like in the Metaverse

While unusual to many consumers, the Metaverse Fashion Week, known as Decentraland, offered a glimpse into the future. For retail, the metaverse presents the optimal middle ground between the ease and convenience of online shopping and the immersive and tangible enjoyment of physical shopping. The metaverse can be seen as a third layer, a new market or a new channel that could be integrated with exiting physical and digital ones.

As complex as the metaverse seems, it provides a unique opportunity for retailers and brand marketers to invest in a creators' economy and transition from a corporate mindset to communities combing the real world with the digital.

Opportunities for Creators and Communities in the Metaverse

To extract the most value and potential from the metaverse, retailers must focus on investing in creators and fostering community. Web 3.0 will decentralize apps, resulting in a new virtual economy; creators will be an integral part of this new economy. Retail companies need to consider that these people will add a new channel to the omnichannel mix through their contribution of digital assets and fresh content.

Brands will benefit significantly by leveraging and incentivizing the creative power of their customers. Consider what's already happening in Roblox, where players can create their own worlds for other users to explore.

Creators will inevitably spawn communities, and it's paramount that businesses nourish these groups from a consumer-first perspective. In many ways, social media was the progenitor of the metaverse in that it was all about communities that shared interests in the virtual world. The metaverse is the next phase where instead of sharing videos and photos, users can contribute their content and creativity directly to brands — augmenting equity and perception, or supporting the creation of new revenue streams.

Gaming is an excellent representation of what virtual and real-world activity look like; another is Peloton, which creates a sense of belonging for users. Nevertheless, companies can't get overzealous and start bombarding customers with advertisements — that will defeat the purpose of these communities.

Considerations for the Ideal Metaverse Strategy

Though the metaverse may seem like California at the height of the gold rush, don't be so quick to sell the farm and pack your bags. In other words, retail brands should have an innovative, early adopter mindset without abandoning a more cautious test-and-learn mentality. There's nothing wrong with getting into the metaverse before competitors, but be sure to have a long-term strategy.

Businesses should invest in a robust digital presence by carving out their place within the metaverse while weighing the risks and rewards of various avenues. Likewise, retail companies should avoid recreating their website or store inside the metaverse. Instead, retailers can get creative with technology and play with the traditional norms of the shopping experience. Stores should be fun to explore and unrestrained by physics or real-world conventions.

Another core reality of any strategy is knowing one's audience. While a retailer might have a well-established audience in the real world, the metaverse is much different.

For brands like Nike, it's relatively easy to experiment because it already has a user base that includes people actively exploring and investigating these virtual worlds. Other companies, especially niche ones, will have more of a challenge determining their new audience. The same user can have multiple identities in the metaverse, changing the way we look at data and segmentation.

Operating Within Today's Limitations

Despite the excitement and potential, there's a substantial divide between today's and tomorrow's metaverse regarding the interoperability between unique virtual worlds. Currently, these different worlds exist as gated communities limiting what types of experiences brands can create. Eventually, there will be open-source environments. For now, retailers have to get creative with what they have available and test and learn before betting strongly.

Erica Moreti is head of strategy and innovation and physical experience for EPAM Continuum, the integrated business, experience, technology and data consulting practice of EPAM Systems, Inc.