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This article was contributed by Will Hayes, CEO of Lucidworks.
Adidas, L’Oreal, and even Martha Stewart have already jumped into the metaverse. Retailers see “metaverse” and flashback to twenty years ago when e-commerce kicked off. They prefer not to be the ones launching their first HTML site while the competition is launching their ecommerce platform.
The metaverse introduces a new platform, new currency, new opportunities, and new ways to fail. Here’s how brands can build for the metaverse and catch the wave before it crushes them.
Grow from your physical store
The metaverse feels intangible right now, in the same way that a website felt tenuous in the ’90s — and we all know how that ended. Ecommerce, including selling on social channels, became the gold standard and an entire industry of technology and consultants grew to support it, paving the way for D2C retailers who abandoned physical channels altogether.
Retailers that have used physical locations to differentiate their experiences have struggled to find a way to bring this to the digital world. One of the most well-known examples of this is Sears. Once a leading department store that anchored malls all over the country, Sears failed to evolve to omnichannel and was crushed by department stores including Nordstrom and Kohls.
In the metaverse, these retailers with a great understanding of how to build experiences and foster community in-person could have a leg up. Why? Retailers should be expanding from their physical stores into the metaverse, not leading with digital. Physical spaces work because we’re physical humans. Entire teams of merchandisers and designers are built on the idea that how we experience things as we move through real, physical life matters. As a consumer, it makes me feel something, makes me buy more, makes me come back — and in the metaverse, I can do it all without getting off the couch.
That expertise should be what retailers leverage in the digital metaverse universe. Many retailers will fall into the trap of leading with their teams of engineers to create the strategy for their metaverse experience. Don’t recreate your website on the metaverse; be intentional about using the metaverse to enrich the customer experience. Five years down the line, there will likely be teams of consultants and developers who can help build the metaverse experience. For now, tap into the knowledge of the people on your team now who understand how to translate brand values and a sense of community into physical spaces to help build the metaverse. People matter more than ever; don’t overlook the expertise and understanding of people who are creating in-person experiences.
Be intentional in the retail metaverse
In many ways, the metaverse isn’t totally net-new; it’s a combination of things that have already happened. The first idea of the metaverse dates back twenty years. Many ecommerce platforms already offer some of the AR and VR features that will be part of the retail metaverse. Trying on makeup without it ever touching your skin? Sephora already did that. Entering room dimensions to see how you can organize furniture? There’s a long list of apps that help you imagine your space. Watching a store associate or ambassador hawk goods in real time? Livestream shopping boomed during the pandemic.
So what’s different about the metaverse?
Instead of watching things on a screen, you’re stepping into an entire world; the metaverse blends all of these possibilities in one place.
Intentional creation is key. Intentionality must drive the three key pillars that retailers build into their metaverse: community, experience, and engagement. It’s not hard to spit out a one-off VR game (like I said earlier, a lot of that has already been done). Focus resources on building a metaverse that fosters community, enriches customers experience with the brand, and engages shoppers to build loyalty.
1. Be intentional with community
Brands like Peleton and REI have brought a sense of belonging and community to a hybrid world. They connect the “average consumer” with likable and accessible experts in the form of trainers and store employees. Before you spin up another VR game, set the intention for building another customer experience.
Brands like Lululemon who have been cultivating community through in-store classes and a shared bond over the love of yoga may already have clear intentions around what they want their community to be. Big box stores like pharmacies and grocery chains will have to dig a little deeper. Here’s a checklist of questions to help get the conversation going. Retailers should use these questions to help define the intention around the community before they start spinning up their new world:
- What type of world do I want my shoppers to step into? Think about everything that goes into designing your real (or imagined) physical store; how does it smell? Where do people gather? Are there sales associates? Am I welcoming people into a showroom or onto a factory floor?
- How is the experience of my customers enriched by the metaverse? If customers adore livestream shopping events, how am I using the metaverse to enrich that experience? As opposed to ticking a box or providing the exact same thing on another platform? Am I creating a new type of forum for enthusiasts or casual browsers to connect?
- Why build community at all? Is it to retain loyal customers? Increase average order value? Purely to delight shoppers?
These questions matter. And if you can’t answer them, you could fall victim to creating a hodgepodge experience.
2. Be intentional with experience
Retail in the metaverse is a unique opportunity to access and envision products in a way that wasn’t previously possible. When you put on VR goggles, you not only get to see what your room would look like if you bought that pink velvet couch from CB2, you also get to sit down in the room and experience how it all fits together. The metaverse allows customers to experience physical goods in the virtual world, even recreating virtual representations of their backyard, house, car, or body to get an immersive experience before purchasing art, furniture, or clothing.
Retailers must avoid the “laundry list” mentality when they’re building out the metaverse experience. Again, be intentional. One size doesn’t fit all in the metaverse.
For example, both Porsche and Kia want to sell cars. But because of the type of customer they have, the intention behind the experience will be different. Porsche enthusiasts who are doggedly following online car auctions and can tell you engine specs for the 911 made in 2006 are going to want to step onto the factory floor and see how Guards Red paint is formulated. Kia shoppers may not be as interested in those details.
The list of questions retailers need to ask themselves is much shorter than community building. “How is the metaverse enhancing the customer experience?” If it’s an add-on, or it’s replicating something that already exists on Instagram Live or YouTube, retailers are wasting their resources.
The metaverse can enhance that personalized experience by offering a live-stream shopping event where customers can sit next to a brand ambassador, and then immediately be able to step into a virtual dressing room where they can try something on, add it to their cart, and check out.
A large component of experience building will be figuring out how to incorporate business channels, which should be dictated by the type of experience that’s being built. Once retailers have a clear intention around the vibe of their universe, it’s time to consider how money flows in.
3. Be intentional with engagement
For the brands that have intentionally built a space that enhances the customer experience and puts intention behind the creation of a virtual community (and hopefully, they’ve got a VR room full of shoppers), what now?
There are two big trends happening that retailers should capitalize on.
Welcome to the world of nonfungible tokens
Building community and guiding customers through an intentional experience is great — and arguably one of the biggest draws for consumers — but it doesn’t drive dollars. For consumers that aren’t familiar with cryptocurrency, nonfungible tokens (NFTs), or digital wallets, this presents a big barrier to access.
Retailers must make it easy for consumers to understand and set up their presence in Web 3.0. Commerce companies should tap commerce platform experts to help design the experience to guide customers from the familiar e-commerce site to the new 3D cryptoverse.
Brands have chosen different ways to deploy NFTs. For example, Martha Stewart recently announced Martha Stewart Mint, where you can click on the digital record you’d like to buy and it guides you to a product description and FAQs about how the heck this all works.
L’Oreal recently released their first NFT series by leading female, digitally-native artists inspired by a lipstick collection, centered on female empowerment. The path to OpenSea, where the majority of auctions take place, isn’t as clear as Martha’s. For a crypto newbie, it could be too confusing to pursue.
When incorporating NFTs as a buying channel, consider the initial intention that was established around community and experience. Retailers should consider how they can connect digital and physical channels. Consider incorporating a physical product drop alongside an NFT purchase. Adidas did this in their drop in December, using Twitter and Discord to promote the upcoming sale. By offering NFTs and a physical product, they can span both channels seamlessly.
Personalized experiences bridged from ecommerce to the retail metaverse
Where appropriate, ecommerce retailers should expand digital experiences to concierge-like services where shoppers can build connections with other niche groups and brand ambassadors. AI-powered chatbots do some of this work in ecommerce because they’re cheaper to staff than people, they’re effective if they work, and they’re there to be a one-to-one personal concierge experience. That capability isn’t (yet) available in the metaverse, so brands should consider gating content or events based on consumer behavior in other platforms, like on the website and social.
Most retailers worth their salt are already collecting customer signals on ecommerce platforms. They understand customer preferences, price threshold, and buying behavior. Retailers can capture signals from ecommerce and extend gated experiences to specific shopper cohorts. Digital merchandisers play a key role here in creating promotions for trending products, where a purchase gets shoppers access to gated content in the metaverse. Retailers should consider the metaverse as a new selling, marketing, and engagement channel to be incorporated into the omnichannel experience.
The retail metaverse: Retail in 3D
The intersection of unique brand experiences and smart adaptive technology will reach its heights in the metaverse. If retailers remember nothing else, they should remember this: “People first.” It sounds like an oxymoron when you’re talking about escaping into 2D and 3D worlds behind a screen, but the success of the three pillars I’ve shared above — community, experience, and engagement — all hinge on a brand’s ability to bring real, human customers along on this digital journey.
Will Hayes is the CEO of Lucidworks.