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Shopping in the Metaverse

Identify and understand the metaverse commerce shopping impacts on retail value streams.

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  • Retail brands across most product categories feel the need to adapt to compete with the rise of cryptocurrencies, NFTs, and the metaverse, which has led to a new breed of virtual shoppers demanding products and services that are changing the retail landscape.
  • The effects of metaverse commerce adoption are being felt by retail brands at various stages of the shopping journey. Shopping works differently than in the past and requires new outlooks, models, and competencies.
  • Metaverse commerce technology transformation requires superior technology and virtual retail environments to provide a cohesive connected experience. Retailers need to map out their journey from today to be ready to deliver a metaverse commerce experience that customers will expect.

Our Advice

Critical Insight

  • The metaverse will fundamentally disrupt the retail ecosystem and take personalization from evolution to a complete revolution. Although metaverse commerce is still in its infancy, many retail brands are testing applications like avatar-driven customer services, augmented reality, and 3D interaction to entice shoppers through virtual stores, products, and events.
  • For many enterprises, realizing value in the metaverse is a mystery for now. Ultimately, retailers will need to map out their journey from today to be ready to deliver a metaverse commerce experience that their customers will expect through products, customer services, operating models, and technology.
  • As technology advances, much consideration will focus on the degree to which retail brands must leverage prospects in the metaverse commerce, or they may have to trade due to the possibility of losing competitive advantage, market share, and profitability.
  • Retailers must validate their strategy and persistently reinforce the enterprise’s core capabilities and construct to capitalize on the value of this new prospect.

Impact and Result

  • Identify opportunities across your shopping journey to capitalize on the blockchain, digital twinning, infrastructure, and virtual environments to monetize key customer insights.
  • Realize the effects of metaverse that are being felt on all entities of the physical and virtual retail ecosystem. Learn how the best-in-class retailers are already reaping business benefits from adopting technology demands with the Metaverse Journey Map.
  • Visualize consumer, services, operations, and technology components in unison for your enterprise and industry use cases to design a list of initiatives to integrate into the IT strategic plan.

Shopping in the Metaverse Research & Tools

1. Shopping in the Metaverse Storyboard

This research analyzes instances of metaverse technology adoption by retail brands at various stages of the customer experience. Additionally, it provides awareness and readiness on how retailers can capitalize on evolving technologies to realize “Shopping in the Metaverse.”

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Shopping in the Metaverse

Identify and understand the metaverse commerce shopping impacts on retail value streams.

Analyst Perspective

The metaverse commerce shopping journey will lead to growth with direct-to-avatar (D2A) models via blockchain, digital twins, and non-fungible tokens (NFTs).

The metaverse will fundamentally disrupt the retail ecosystem and take personalization from evolution to a complete revolution. Although metaverse commerce is still in its infancy, many retail brands are testing applications like avatar-driven customer services, augmented reality, and 3D interaction to entice shoppers through virtual stores, products, and events.

For many enterprises, realizing value in the metaverse is a mystery for now. Ultimately, retailers will need to map out their journey from today to be ready to deliver a metaverse commerce experience that their customers will expect through products, customer services, operating model, and technology.

As technology advances, much consideration will focus on the degree to which retail brands must leverage prospects in the metaverse commerce, or they may have to trade due to the possibility of losing competitive advantage, market share, and profitability.

Retailers must validate their strategy and persistently reinforce the enterprise's core capabilities and construct to capitalize on the value of this new prospect.

This is a picture of Rahul Jaiswal Principle Research Director, Retail Info-Tech Research Group

Rahul Jaiswal
Principle Research Director, Retail
Info-Tech Research Group

Executive Summary

Your Challenge

  • Retailers struggle to adapt to the rise in demands for cryptocurrencies, NFTs, and metaverse from the evolving needs of virtual shoppers.
  • Shopping in the metaverse works differently than shopping used to, and requires a new outlook, models, and competencies to remain competitive.
  • Metaverse commerce technology transformation requires superior technology journey mapping, and building a cohesive client experience.
  • Retailers need a fully comprehensive strategy to address evolving shoppers' needs.

Common Obstacles

  • Retailers are reluctant to execute metaverse, which is the key to the success of the retail organization's strategy.
  • Most retailers don't know how to begin. Retailers have not taken a structured approach to execute technology in each phase of the shopping journey and have deployed technology before developing a robust strategy.
  • Virtual and augmented customer experiences are crucial for retailers to drive value in today's market.
  • Most retail brands seek to adopt a well-crafted strategy in technology deployment to master the metaverse commerce domain.

Info-Tech's Approach

  • Identify opportunities across your shopping journey to capitalize on the blockchain, digital twinning, infrastructure, and virtual environments to monetize key customer insights.
  • Realize the effects of metaverse that are being felt on all entities of the physical and virtual retail ecosystem.
  • Learn how the best-in-class retailers are already reaping business benefits from adopting technology demands with the Metaverse Journey Map.
  • Visualize consumer, services, operations, and technology components in unison for your enterprise and industry use cases to design a list of initiatives to integrate into the IT strategic plan.

Info-Tech Insight

Many enterprises do not recognize the use of blockchain, digital twinning, AR, VR or MR as vital to their business. Interest in these spaces is quickly increasing as digital currencies, non-fungible tokens, and metaverse commerce generate new outlooks for value creation. Businesses need to develop a holistic strategy and reevaluate business and technology capabilities while planning for the metaverse. Retail brands that do not plan for the future are likely to lose market share to metaverse commerce adopters.

The metaverse is a technological convergence

The metaverse is a platform combining multiple technologies to enable social and economic activity in a digital world that is connected to the physical world.

Info-Tech Insight

A metaverse experience must combine the three P's: user presence is represented, the world is persistent, and data is portable.

A Venn diagram with four circles is depicted. The circles are labeled: Artificial Intelligence; Real Time Communication; Immersive Digital Space; and Mixed Reality, Respectively. Where these circles all converge, is the word METAVERSE. Below and to the right of the image, is a fifth circle labeled Blockchain Emerging. This circle does not overlap.

Forecast eCommerce to grow progressively in the future by driving an increasing number of online buyers who are willing to spend more

Online Sales Growth

E-commerce as a percentage of total retail sales worldwide from 2015 to 2020, with forecasts from 2021 to 2025

Online Sales Growth

E-Commerce Growth Drivers

E-commerce as a percentage of total retail sales worldwide from 2015 to 2020, with forecasts from 2021 to 2025

A bar graph is depicted, showing the percentage of sales represented by e-commerce from 2019 to 2025.

Source: Statista, Aug 6, 2022

  • Social Commerce
  • 3D Commerce
  • Mobile Commerce
  • Global Reach
  • Customer Confidence
  • Broadband Access
  • Content Localization
  • Online Merchants
  • Internet Usage
  • Cashless Transactions
  • Investment in Logistics
  • 24/7 Secure Service

Top 10 Countries, Ranked by Retail Ecommerce Sales Share, 2021

A bar graph is depicted, ranking the top 10 countries by percentage of global Retail Ecommerce Sales

Source: eMarketer, May 2021

  • E-commerce growth will remain strong throughout 2022 as the pandemic continues in many parts of the world and more consumers have become used to shopping online (eMarketer).
    • According to Morgan Stanley, China's private consumption will more than double, to reach $12.7 trillion by 2030 (CNBC, 2021).
    • Chinese e-commerce has evolved rapidly during the last five years, supported by high internet and smartphone penetration, increasing consumer confidence in online shopping, the rise of e-commerce platforms, and the availability of various alternative payment solutions such as Alipay and WeChat Pay (GlobalData).
    • More retailers are adopting omnichannel and click-and-collect strategies, which allow customers to order merchandise online for pickup in stores. The buy-online-pick-up-in-store (BOPIS) strategy is becoming a critical growth component of retail services.
  • A growing number of retailers are experimenting with metaverse applications like avatar-driven customer service, augmented reality shopping, 3D commerce, and more. Retailers agree that the metaverse will play an essential role in the industry's future.

Metaverse will lead the next wave of growth with the direct-to-avatar model through product development, infrastructure, blockchain and product design

Retail brands are building digital products, modelling real physical environments in digital space applying

  • Virtual showrooming – Designed to allow customers to take a tour and interact with 3D products.
  • Virtual try-on – Assisting customers to tap into augmented reality, try on glasses or makeup, and visualize furniture.
  • Customization and co-innovation –3D technology leveraged to let consumers build/design their shoes.
  • Gamification – Brands are creating a video game to reach a younger audience with branded NFT collectables.
  • Connected wellbeing – Digital treatments such as prescription gaming and VR pharmacies are gaining momentum in the medical world.
Top corporate capabilities needed to deliver metaverse strategy, % of senior executives
Top 5

Business (model) building

53

Product development/coding

42

Infrastructure/back-end engineering

38

Blockchain/commerce/payments

37

Product design

35
Others

Legal, risk and compliance

35

Cybersecurity

33

Analytics

32

Content creation

29

Marketing/go to market

29

Brand/corporate strategy

28

Process engineering

21

Graphic design (e.g.,3-D art, games)

19

Process engineering

12

Project management

10

CRM/community management

10

Source: McKinsey & Company, Senior Executive Survey, April 2022

Leading retailers and brands are offering metaverse commerce at various stages of the shopping journey

Awareness

Consideration

Transaction

Delivery

Engagement

BURBERRY Walmart NIKE Carrefour CVS pharmacy
  • Burberry is leveraging virtual influencers as key opinion leaders and consumers (KOL and KOCs) in a collaboration with Ayayi, who is the first metahuman in China (hyper-realistic digitized person),
  • She (Ayayi) gained 400,000 followers overnight and nearly 3m views on her first post. Working with Ayayi, Burberry launched a limited-edition NFT linked to a physical collection.
  • Walmart's acquisition of Memomi, an AR startup would drive virtual try-on for eyewear.
  • Walmart has increased its investments in new technology for virtual try-on, and newly launched a virtual fitting room after acquiring Zeekit.
  • Nike has struck a partnership with RTFKT Studios, a fashion startup that makes its own NFTs — including sneakers.
  • Nike has filed a trademark for its trainers, which stops anyone else from selling Nike shoes in the metaverse.
  • Carrefour is leveraging blockchain technology to track its meat, milk and fruit from farm to store.
  • Blockchain technology informs their customers and increases customers' trust in products. It's done via a QR code scannable on any phone, and it gives information about where and when the product was harvested, whether it contains any pesticides, etc.
  • CVS retail pharmacy is bringing in-store and telehealth services to a virtual setting via digital twins, plus "health care services delivered in virtual and augmented reality environments, i.e., non-emergency medical treatment services, wellness programs, advisory services relating to nutrition, providing health lifestyle nutrition services and counseling.
BALENCIA LOWE'S AMAZON LVMH Disney
  • Fashion house Balenciaga collaborated with the video game Fortnite to release a collection of in-game clothes and limited-edition physical garments.
  • The in-game garments were created through existing 3D scans of Balenciaga's designs.
  • Lowes launched 'Open Builder', a 3D product library containing over 500 assets from various brands that Lowe's sells in-store. Shoppers can simply explore the library, select the model, and download it.
  • Since these assets are interoperable, they could have built a showroom using Mozilla Hubs, decked out an apartment in VRChat, or thrown a pool party in Roblox.
  • The Amazon-managed Blockchain system uses Hyperledger Fabric and Ethereum. It's a fully managed transaction system that safeguards that the precise networks work in coherence with each other, and the overhead costs to maintain them are removed.
  • Together with Microsoft, this luxury group developed the platform AURA. This platform provides product tracking and tracing services using Ethereum. Customers can learn about the origin of the products using this platform.
  • Disney filed a patent for a "virtual-world simulator," which replicates one of the company's theme parks in a 3D realm. Users can now move in "highly immersive individualized 3D virtual experiences without needing users to wear an AR-augmented reality viewing device.

Source: Open Source, Info-Tech Research Group Analysis

METAVERSE COMMERCE


This image contains a journey map for retailers to use to map their journey from today to a complete metaverse delivery experience.

Source: Info-Tech Research Group Analysis


Metaverse commerce will harness blockchain technology to advance the shopping experience

Awareness and the Readiness

Start the blockchain journey with integration, modernization, and agility at its core

  • Legacy Modernization – Integrate blockchain into an existing legacy environment.
  • Service Integration – Assist complex integration when integrating blockchain into the current business and technology environment.
  • Agile Prototyping – Practice agile prototyping to achieve efficient communication with stakeholders, track design decisions, and manage the implementation of blockchain prototypes.

Retailers must explore blockchain with proof of concept (PoC) for recognized use cases using an agile approach.

  1. Leverage Smart Contracts to Execute Commercial Transactions and Agreements – Smart contracts use blockchain to enforce the obligations of all parties in a contract, without the extra overhead of a middleman. They are computer programs that facilitate, verify, or enforce the negotiation or execution of an agreement. Smart contracts often emulate the logic of standard contractual clauses, so many contractual sections can be made partially or fully self-executing, self-enforcing, or both.
  2. Enhance Data Portability and Reduced Risk Storing Customer Information – Know Your Client (KYC) Statements can be stored on the blockchain to decrease administration problems and costs while outlining the concerns that still need to be addressed. A decentralized identity management platform would reduce the stress on the current centralized approach to storing customer information. By storing data in blocks and using a tamperproof hash format, retailers can improve the security of the stored identity, improve the portability of data, and reduce the time taken for KYC efforts.
  3. Deliver Seamless Direct Money Transfer and Payments – Blockchain technology could be used to overcome the current problem of the correspondent system and international money transfer. The fee-intensive & fragmented cross-border non-cash transaction could be eliminated by excluding third parties, direct money transfers, and efficient interbank settlements. Creating a competitive marketplace of liquidity providers potentially ensures the best exchange rates for international exchange and payment transactions.
  4. Use Decentralized Ledger for Trade Settlements – Trade settlement processes usually require two to three days for payments and securities to change hands. Moving this process to a decentralized ledger can have a transformative effect on the markets. This need not be limited to debt, etc., but can also be extended to complex modelling.

Digital twinning will take personalized retail from evolution to revolution

Awareness & Readiness

  • Digital twinning aids in applying changes in test mode, fine-tuning the process online, and deploying flawless solutions into reality.
  • All hypotheses can be verified within the simulation, which saves time, money, and other resources. Enterprises fundamentally get a trial run for any likely changes online, which significantly decreases errors in the real processes.
  • Digital twins can be used to generate computational investigative models for any purpose desired. It embraces operating effects, predictions of conditions, and determining behaviours.
  • Models can recommend enhanced actions based on engineering input, ML and AI, sciences like physics, chemistry, statistics, as well as business objectives.

AR/VR/MR* Merchandising

COMPUTATIONAL INVESTIGATIVE MODELS

Testing Prototypes
New Product Designs

Simulating Merchandise
Increasing Effectiveness

Process Deviations
Creating 3D Visualization

Tracking Change In-Diverse Conditions

Managing Product, Production, Performance Lifecycle

Diagnosing Risk Factors Virtual Scanning

Rapid Diagnosis,
Vitals, Activity Monitoring

Predicting Reactions
Remedies In-Advance

Faster, Fewer, Safer Clinical Trials

Optimizing Efficiency of Retail Pharmacy Facilities

*AR: Augmented Reality; VR: Virtual Reality; MR: Mixed Reality

To master the metaverse commerce domain, retailers need to adopt a well-crafted strategy in technology organization

  1. AWARENESS
    • Evaluate Business Goals
    • Market Investigation –
      • Customer Segmentation
      • Trends Analysis
      • Competitors Mapping
      • Buyer Personas (Avatars)
      • Buying Patterns
    • Usability Calculation
    • Channel Fluidity
    • Maturity Assessment
    • Organizational Change
    • Process Implications
  2. CONSIDERATION
    • Metaverse Strategy Plan
    • Assortment Planning
    • Order & Inventory Management
    • Centralized Marketing
      • Campaign Management,
      • Location-Based Promotions
      • Personalized Communication
      • Product Information
    • Social Networking
    • Crowd Sourcing
    • Trend Monitoring
  3. SELECTION
    • Business Process
    • Enterprise Architecture
    • Architecture Roadmap
    • Data Definition
    • Cost Benefit Analysis
    • Product, Production, Performance Evaluation
    • Customer Experience Classification
  4. Negotiation
    • Change Management
    • Program Management
    • Compliance Requirement
    • Legal Framework
    • Technical Architecture
    • Design Governance
  5. APPROVE
    • Cross-Channel Visibility
    • Cross-Channel Integration
    • Customer Identity
    • Access Administration
    • Product Implementation
    • Custom-made Development
    • Social, Commerce Integration
  6. FOLLOW UP
    • Platform Operations
    • Application, Tools Support
    • Business Intelligence
    • Predictive Analytics
    • Technology Automation
    • Continuous Customer Engagement
    • Customer Services and Loyalty

RETAIL INDUSTRY REFERENCE ARCHITECTURE
Envision business capability components, costs and competitive advantage creators in unison to align the value streams

This is an image of Info-Tech's Capability map which demonstrates the business capability components, costs, and competitive advantages.

Source: Info-Tech Research Group Analysis

STORE IN METAVERSE
Case Study: Lowes expands into the metaverse by unveiling a ‘digital twin’ store leveraging the NVIDIA Omni-verse platform and Magic Leap.

Lowe’s Companies Inc. is a retail company specializing in home improvement, based in Mooresville, North Carolina. The company operates a chain of retail stores in the United States and Canada. As of February 2021, Lowe's and its related businesses operate 2,197 home improvement and hardware stores in North America.

Lowe’s wanted to enter the metaverse by opening a virtual store, providing customers with a 3-dimensional shopping experience where associates can also interact with and visualize store data to improve operations and logistics.

Solution

  • Lowe’s leveraged the omni-verse platform, which helps build and operate metaverse applications on a real-time large-scale 3D database. The platform empowers 3D designers and teams to connect and build existing 3D pipelines that operate virtual worlds simulations.
  • Operatives can create and collaborate on any device with the Omniverse App Streaming feature, access and edit shared virtual worlds with Omniverse Nucleus Cloud, and scale 3D workloads across the cloud with Omniverse Farm.
  • Lowe’s empowers warehouse workers to work efficiently by seeing visual stimuli in the warehouse while wearing the Magic Leap 2 augmented reality (AR) glasses.
  • Nvidia’s SaaS offering, Omniverse Cloud, is an IaaS that links Omniverse applications running in the cloud, on-premises, or on-edge devices.

Results

  • Lowe’s has prepared an interactive digital replica of its store within NVIDIA Omniverse Enterprise’s environment, where associates can interact and visualize store data to optimize operations and logistics.
  • Lowe’s associates can access live at two stores, through desktops or computers and with Magic Leap 2 AR headsets.
  • With the virtual replica of the store, the company is analyzing a variety of other use cases, including reconfiguring designs, restocking support, real-time collaboration, and what it calls “X-ray vision.”
  • (Sources: Nvidia 2022, Retail Dive 2022)

Related Infotech Research

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Assess your initiatives and priorities to determine if you are investing in the right capabilities. Conduct capability assessments to identify opportunities and prioritize projects.

Into the Metaverse

Understand how Meta and Microsoft define the Metaverse and the coming challenges that enterprises will need to solve to harness this new digital capability.

Learn about other solution providers implementing the enterprise metaverse and How IT can prepare for the new digital world

Identify risks in deploying metaverse solutions and how to mitigate them.

Define Your Digital Business Strategy

Design a strategy that applies innovation to your business model, streamlines and transforms processes, and makes use of technologies to enhance interactions with customers and employees.

Use digital for transforming non-routine cognitive activities and for derisking key elements of the value chain. Create a balanced roadmap that improves digital maturity and prepares you for long-term success in a digital economy.

Adopt Blockchain for Supply Chain Transparency

Simplify, automate, secure. Smart contracts enable businesses to simplify, automate, and secure traditionally complex transactions.

New business models. Smart contracts enable the redesign of your organization and business-to-business relationships and transactions.

Bibliography

Amazon Managed Blockchain." Amazon, 2022. Web.
Bhatia, Swati. "The Metaverse: Building Blocks and Market Map." Level Up Coding, Nov 16. 2021. Web.
Brown, Britney. "10 Retail Companies Using Blockchain Technology." Kapsul, 14 Sept. 2021. Web.
Buyer, Lisa. "Marketing in the Metaverse: The Future of Search & Social." Search Engine Journal, 25 Aug. 2021. Web.
Clement, J. "Statista predicts that gamers will likely spend a whopping $50 billion by the end of 2022." Statista, 7 Sept. 2021. Web.
Cortés, Andrea. "How can brands jump into direct to avatar [D2A] commerce?" MG Empower, 16 Dec. 2021. Web.
"Digital Fashion Report." LYST Insights, 2022. Web.
Duman, Ongun. "Metaverse: The Future of the E-Commerce." AR/VR Journey, 10 Feb 2022. Web.
Faithfull, Mark. "CEEK And You Won't Find: H&M Denies Metaverse Rumors." Forbes, 6 Jan. 2022. Web.
Hackl, Cathy. "Is Direct To Avatar The Next Direct To Consumer?" Forbes, 9 Aug. 2020. Web.
Hackl, Cathy. "How Brands Can Thrive In The Direct To Avatar Economy." Forbes, 29 Jan. 2021. Web.
Heethuis, Nick. "How The Metaverse Will Reshape E-Commerce Forever." Forbes, 24 Jan. 2022. Web.
King, Brittany. "Faster invoicing resolutions build stronger relationships." IBM, 2022. Web.
Lal, Pradip. "Direct-to-Avatar (D2A) Commerce in the Metaverse and Delivery of 3D Assets Explained." Cloudinary, 2 March 2022. Web.
"LVMH, ConsenSys and Microsoft announce AURA, a consortium to power the luxury industry with blockchain technology." Consensys, 16 May 2019. Press release.
McDowell, Maghan. "How the metaverse influenced New York Fashion Week." Vogue, 15 Feb. 2022. Web.
Scott, Terry. "H&M creates its first store in the CEEK City metaverse." Blaze Trends, 12 Jan. 2022. Web.
Soltes, Fiona. "Retail and the metaverse: The time is right for exploration." NRF, 10 Feb. 2022. Web.
Thomas, Lauren. "Walmart is quietly preparing to enter the metaverse." CNBC, 16 Jan. 2022. Web.
Thomasson, Emma. "Carrefour says blockchain tracking boosting sales of some products." Reuters, 3 June 2021. Web.
Chen, Peilin. "Meet Ayayi: China's First 'Meta-human' Virtual Influencer." thatsmags, 9 July 2021. Web
Tiffany, Lung. "Burberry Bridges NFT With Physical Limited-Edition Scarf Ahead Of Alibaba Singles' Day." 24 October 2021. Web
Sig, Ueland."12 Examples of Brands in the Metaverse" Practical Ecommerce. 25 January 2022. Web
"Value creation in the metaverse" McKinsey. 13 June 2022. Web
Bethanie, Ryder. "Into the Chinaverse." Jing Daily. 20 May 2022. Web
Jon, Radoff. "9 Megatrends Shaping the Metaverse". Medium. 19 May 2021. Web
Daniela Coppola. "E-commerce as a percentage of total retail sales worldwide from 2015 to 2020, with forecasts from 2021 to 2025" Statista Aug 26, 2022. Web
"Top-10-countries-ranked-by-retail-eCommerce-sales-share-2021-of-total-worldwide-retail-eCommerce" EMarketer. May 2021
Cheng, Evelyn. "Chinese consumer spending is set to double by 2030, Morgan Stanley predicts." CNBC, 29 Jan. 2021. Web.
"Chinese e-commerce market to reach US$3.3 trillion in 2025, says GlobalData." GlobalData, 14 Sept. 2021. Web.

Research Contributors

Larry Fretz
VP of Industry Research
Info-Tech Research Group, USA

Rajiv Shankar
Chief Information Officer
REDTAG, United Arab Emirates

ROB REDFORD
Practice Lead
Info-Tech Research Group

Nastaran Bisheban
Chief Technology Officer
KFC, Canada

ERIC FROHLICK
Executive Advisor, Global Services
Info-Tech Research Group

Identify and understand the metaverse commerce shopping impacts on retail value streams.

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Author

Rahul Jaiswal

Contributors

  • Bisheban, Nastaran. Chief Technology Officer, KFC Canada
  • Shankar, Rajiv. Chief Information Officer, REDTAG
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