The pandemic has accelerated the digital transformation. The past two years have completely changed the way we live, work, interact and the way children learn. As the world has become more detached in the race to digital, consumers all crave deeper interaction. The Metaverse brings new ways of engagement and connection between individuals: it is a fast growing community where people are looking to engage, connect and live unique experiences in virtual reality. For brands and retailers, the Metaverse is also a new marketing and branding tool as well as a new sales channel that has no physical boundaries. As such, it can bring new meaning to the stores and customer experience.
As the Metaverse is revolutionizing and pushing the boundaries of retail as we know it, some might wonder what impact it will have on physical stores and the customer journey. In the third installment in our series, we have discussed with retail experts and brand leaders to understand whether the new digital frontier is a threat or an opportunity for brick-and-mortar stores and how brands should make use of the Metaverse to enhance the customer experience.
The Metaverse: a threat or an opportunity for brick-and-mortar stores?
According to Will Duckworth, EY Asia Pacific Digital Leader, it could be both. “There are opportunities for smart retailers to engage consumers in a more meaningful, experiential way and to engage them in a more leisurely setting. We’ve long talked about the threat of online commerce to the bricks-and-mortar business model but smarter retailers have prospered through omnichannel integration and taking more of an experiential approach to physical retail whilst taking a transactional approach to online commerce. Retailers can likewise integrate the metaverse into their channel strategy and create new experiences that consumers value, in the same way experience has become a part of the bricks and mortar proposition. The threat to retailers is that others may do it better and may do it quicker – brands can engage consumers more directly and create direct experiences, disintermediating retailers. It will force retailers to consider more deeply what their core proposition to consumers is beyond physical proximity to the consumer.”
For the Brazilian flip-flop brand Havaianas, that launched in the Metaverse last year, it is an opportunity. Brands should think of the Metaverse experience as an expansion of the brick-and-mortar store that completes the user’s journey experience. “In our opinion, brands that are simply creating shopping venues and stores to replicate a conventional experience are being short-sighted and ineffective, since this technology allows companies to free their imagination and create something completely new and meaningful to users,” said Danielle Panissa, Havaianas APAC brand Director. She added that the Metaverse will continuously challenge brands and retailers to keep experimenting and evolving their brick-and-mortar stores to reinforce the sensory experiences that can only be experimented (for now) in the real world such as taste, smell, touch.
The Metaverse: a new element of the brand ecosystem
As Julien Gaubert-Molina, Partner & CEO Asia of the Digital Influencer Marketing Agency YKONE, pointed out the Metaverse is completing the brand ecosystem. As such, it should not be seen as something opposite to our retail world but more as a complement to get closer to new and younger audiences.
For Danielle Panissa from Havaianas, the Metaverse is an addition to the omnichannel journey as it presents itself as a new channel for users. Consumers will be impacted by brands and advertising in the Metaverse in the same way they are today in social media and web navigation. Therefore, brands must assure to deliver a consistent experience through all the touchpoints, including the Metaverse. The challenge for many businesses will be to manage users in both universes: the real and the virtual one.
Its impact on the customer experience & customer journey
As a new touchpoint, the Metaverse should be leveraged by brands to enhance the customer experience and brand affinity.
“Retail leaders should learn from their prior resistance to digital innovation and see Metaverse as an opportunity to engage consumers more meaningfully. They can build digital experiences that integrate to consumers’ lives and connect with consumers more emotionally than was ever possible in bricks and mortar,” said Will Duckworth from EY.
“As Metaverse platforms mature, we should expect to see retail transactions seamlessly woven into the experience. It’s a chance for retail to embed itself into other experiences – I can pause a game to try on an outfit the virtual protagonist may be wearing, for example. We have already seen the bulk of marketing and ad spend shift to virtual channels and this will increasingly be in the metaverse and increasingly be more subtly embedded through placement, influencers, and virtual commerce. We’ll see this shift from purely ad spend and marketing into actual commerce through social, entertainment, gaming and work experiences, embedded and integrated into consumers’ everyday virtual life – they won’t simply “go shopping” in the metaverse but rather every experience will offer an embedded retail opportunity,” added Duckworth.
Ultimately the impact will be on brand affinity as consumers are loyal to the brands that align to their values and provide rich experiences. According to Danielle Panissa from Havaianas, offering a unique experience in a virtual reality will be key for brands to attract and retain users in the real world.
As the adoption of the Metaverse matures, brands, advertisers and marketers will have to go where consumers live and that will likely be increasingly in the Metaverse. Brands that prosper in the future are likely to be those that can innovate quickly in the metaverse to embed retail across experiences in the metaverse.
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“This is all white space for retailers so the challenge is as always with new technology and platforms – where to invest, when and how. Realisation of the full potential of the Metaverse is still some way off but there are clear opportunities to experiment and explore with VR, AR and MR experiences and new scenarios that allow for seamless journeys across the physical and virtual worlds,” concluded E-Vonne Loh, Head of Retail and Omnichannel, Greater Asia, HP.