Defining the Metaverse for Ecommerce Brands
In our first ever State of the Ecommerce Fulfillment Industry Report, we took maybe a little too much pleasure in poking fun at Mark Zuckerburg and the less than stellar performance of ecommerce sales in the Metaverse in 2022. The evidence presented against prioritizing the Metaverse as a sales channel as the counter hype was pretty telling:
- Only 2% of consumers have shopped on the Metaverse
- Metaverse is not an effective sales channel for most retailers
- Only 5% of consumers say they have used cryptocurrency for online shopping
- 26% of consumers do not know what an NFT is
- By November 2022, investors have lost more than $2 trillion in cryptocurrency
Although our stats seem to suggest that the Metaverse is a fad that will never live up to the hype, industry experts are still hopeful that 2023 will be a game changing year for ecommerce because of the vast potential of the Metaverse (even if it is mostly empty now).
But before we get ahead of ourselves, let’s start with some basics.
What is the Metaverse?
As it turns out, this is a million-dollar question that even the best minds have trouble answering. One of the best definitions for what the Metaverse entails comes from Wired:
Broadly speaking, the technologies companies refer to when they talk about “the metaverse” can include virtual reality—characterized by persistent virtual worlds that continue to exist even when you're not playing—as well as augmented reality that combines aspects of the digital and physical worlds. However, it doesn't require that those spaces be exclusively accessed via VR) or augmented reality (AR). Virtual worlds—such as aspects of Fortnite that can be accessed through PCs, game consoles, and even phones—have started referring to themselves as “the metaverse.”
This is a long definition, but it hints at some possibilities for the Metaverse that make it more accessible to a wider audience:
- The Metaverse is not just one piece of technology. Rather, numerous tech and gaming companies are creating their own spaces that are all different versions of the Metaverse. The “empty” Metaverse we referred to in the state of the industry report mostly referred to Meta’s version helmed by Mark Zuckerburg, but there are tons of metaverses out there—some more successful than others.
- The Metaverse includes both virtual reality (VR) and augmented reality (AR). Virtual reality is still in its early stages, and with a high entry cost (a cursory Google search shows that VR headsets start around $400), this aspect of the Metaverse really is not for everyone. Augmented reality, however, is widely used—and loved!—by anyone who has used a Snapchat or Instagram face filter. Speaking of Snap, they recently launched a partnership with Amazon fashion that allows users to try on and buy merchandise directly from the Snapchat app.
- This point builds off the last one, but it is important to note that you do not actually need a VR headset to interact with the Metaverse. Though you may not be getting the full “Metaverse experience” by interacting with virtual worlds without a headset, you still can participate in the Metaverse with any Internet-connected device. This significantly opens up the pool of people who can interact with your brand on the Metaverse.
What does Metaverse ecommerce entail?
This one is comparatively easy… Metaverse ecommerce encapsulates anything sold in the Metaverse. This can include costumes for virtual avatars bought in virtual marketplaces (Meta a.k.a. Facebook really wants you to buy virtual clothing) as well as real world items bought in virtual or augmented reality.
There is a popular misconception that you must use cryptocurrency to buy in the Metaverse. This is false. In fact, traditional payment methods are available in the Metaverse, and the AR and VR technologies open the door to new biometric authentication methods. 1.4 billion people are expected to use facial recognition technology to authenticate a payment by 2025 by using a camera connected to AR or VR.
Additionally, the virtual environment allows consumers to authenticate payments by voice, which could be a growing trend in the coming years. For consumers to complete payments securely and efficiently, Ecommerce Times notes that “the payments platform underpinning the payments process should be able to recognize devices consumers are using in the virtual world” and retailers should include payment options with easy-to-use interfaces like Click-to-Pay, PayPal, and Apple Pay.
Some may also think it is only possible to buy virtual goods or NFTs in the Metaverse. Also, false. In fact, virtual department stores where consumers can “try on” merchandise and buy real world items that ship to their homes is nothing new; eBay and Australian department store Myer launched the first VR department store in 2016. With the expansion of the Metaverse last year, other retailers like Bloomingdale’s and Walmart have introduced virtual stores where consumers can shop virtually and order items to be shipped to their homes. At the end of the day, Metaverse shopping is just another avenue for ecommerce.
Why care about Metaverse ecommerce?
It was easy to discount Metaverse selling in 2022 because the technology and consumer engagement just wasn’t there yet. This could all start to change in 2023. According to McKinsey, “59% of consumers are excited about transitioning their everyday activities to the Metaverse,” and leaps in technology—including both hardware and software—are expected to make shopping in the Metaverse a whole lot easier. Additionally, Forbes states that “Snap research indicates 79% of consumers want AR to interact with products before purchase,” emphasizing the importance of AR as a key component of the Metaverse.
With consumer interest and technology aligning, Metaverse ecommerce is primed to take off this year, especially with augmented reality options. No, the Metaverse is not for every brand. But tons of brands can benefit from partnerships with AR/VR marketplaces (why not have Walmart or Bloomingdale’s feature your products in its virtual store?) and can experiment with Metaverse marketing for traditional ecommerce sales channels.
If you are interested in selling in the Metaverse but don’t know where to get started, Shopify recently launched tools on its platform that allow you to create 3-D and AR versions of your products directly on your website. And as Metaverse ecommerce expands, entrance into the market will get easier and more available.
To read more trends—and determine if the hype or counter hype is more valuable this year—download the 2023 State of the Ecommerce Fulfillment Industry Report.