The metaverse gives many opportunities for businesses to profit, but one of the biggest is in virtual retail. Many businesses are already pouring funds into building a virtual site where users can interact and buy products. “There will be a larger market, a larger industry with more designers and creators building things in virtual worlds than there will be in the physical world,” explained Vice President of the Omniverse Platform of the company NVIDIA, Richard Kerris. NVIDIA is one of the many companies that are using the rising interest in virtual retail to increase their own margins. From offering Graphics Processing Units (GPUs) to personalized AI avatars for metaverse users, NVIDIA is embracing the new trend of virtual shopping. “Today, most designers focus on physical world designs like cars, buildings, clothing, and shoes,” Kerris added. “All of those things will be many, many times larger in virtual worlds-this is the next evolution of the web.”
The shift to virtual shopping has already begun, mainly due to the pandemic. Studies have shown that e-commerce sales grew 18% to $710 billion in 2021. Big companies like Amazon gained a majority of this revenue, but the trend inspired many companies to grow their e-commerce department from 10% to 40%. According to Dr. Andrea Luangrath, Assistant Professor of Marketing at the University of Iowa: “Online product images, videos, and virtual reality are an increasingly important source of product information as consumers shift from in-store to online shopping. This has led to entirely new ways for consumers to interact with products.” Whether avatars are shopping for new virtual outfits, or buying and selling non-fungible tokens (NFTs), the buzz around virtual retail is only going to get bigger in the next decade.
“The rising popularity of virtual products and NFTs have prompted brands across verticals, from luxury fashion to Consumer-Packaged Goods (CPG), to create digital assets that they can sell either alongside physical products or in addition to them,” explained Neha Singh, Founder, and CEO of Obsess. Obsess is one of the leading e-commerce platform companies defining virtual retail. From creating shoppable virtual stores to Augmented Reality (AR) showrooms, Obsess has partnered with big global brands, including Tommy Hilfiger, Ralph Lauren, Coach, and others. “Our shopping platform is helping brands enter the metaverse for the first time by creating highly engaging, fully-branded virtual customer experiences that drive discovery, engagement, and sales,” Singh said. “The 3D, immersive experiences live on the brands’ own websites today, but will be available to consumers across metaverse platforms in the future.”
So, what can make digital products more successful for virtual shoppers? Dr. Luangrath may have found a solution. “In our research, we find that observing a virtual hand touch a product, such as in virtual reality or viewing social media content, increases consumer’s evaluation of the product itself and the amount they’re willing to pay for it.” Putting an aspect of virtual touch into a product can make it seem more realistic and relatable to the user. In combination with virtual touch, better 3D-designed experiences where users can walk around and shop are sure to add success to a virtual retail brand.
The metaverse not only can accommodate vast virtual stores but also has the best target audience for virtual shopping. “Young consumers, Gen Zers and Millennials, spend a great deal of time socializing online with each other, and they expect to be able to interact with brands, products, and virtual environments because they grew up with video games and e-sports,” Singh stated. “For these shoppers especially, the metaverse is like a mall-it’s a place to hang out, socialize, and engage in activities like shopping, exercising, and attending concerts and events. These generations’ spending power will grow as they mature and develop their careers, so meeting their expectations and providing them with highly immersive, engaging metaverse shopping experiences will become increasingly important.”
As the main target audience for a metaverse mall is increasing their spending ability, the metaverse technology needs to be ready to meet their virtual wants and needs. It won’t be long before a majority of stores have a virtual location, so you, or your avatar, can go shop without leaving your seat.
Photo Courtesy of Freepik.com