A bi-weekly newsletter diving into the concepts, people and brands who are shaping the future of fashion, beauty and retail.
I’ve been reading so much lately around the metaverse and have become beyond fascinated with this new world. I was particularly inspired by a piece on how the metaverse will radically change the retail landscape and knew we had to debrief. This writer does an excellent job at breaking down the different aspects to consider in the metaverse and given how much we’ve been talking about virtual worlds, we’re dedicating the full newsletter to the topic. The piece is blocked by a paywall but I’m confident I can walk you through it throughly while sharing some thoughts along the way as always!
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IDEAS, INSIGHTS & FORWARD THINKING PERSPECTIVES
The article opens quoting American venture capitalist Chris Dixon: “The next big thing will start out looking like a toy.” This observation, he believes, is the reason why innovations aren’t taken seriously, when in reality, they eventually establish themselves as instruments of significant technical and societal change. "VR headsets, AR, gaming platforms, crypto currencies and NFTs, although toy-like, are, together, leading us to a place called the metaverse that will literally change the very nature of life on Earth: how we work, play, shop and more.”
What is the metaverse?
A quick Google defines the metaverse as “a collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality, and the Internet." Just as the physical world doesn’t stop operating when you go to sleep, the metaverse will continue to advance and change in the same way, even when you’re logged off. Currently, it’s only possible to experience the internet when you go on it, but thanks to a multitude of new devices, technology and enhanced connectivity, we’ll be able to experience the metaverse all around us every day. We’ll also be able to extract data and experiences from the metaverse into the real world, overlaying these elements virtually onto our physical surroundings. If you’re still lost on the idea of how physical and virtual worlds will merge together, Adobe created a fascinating concept video on what this could look like (skip to the 2-minute mark).
Ultimately, the metaverse is a parallel reality, where people work, play, and socialize. The key point here is: “This is not simply a virtual version of the internet we use today. The metaverse is what supersedes the present-day internet entirely.” I’m sure you’re questioning what the realistic timeline looks like for all this and although these concepts have been discussed for decades, it’s very hard to see a definitive “when”. What we do know is our collective experience through the past year - lockdowns, social distancing, isolation and feelings of disconnection - have rapidly accelerated the creation of alternate realities without restrictions.
Who will create it?
The metaverse won’t be developed by a single company but rather “collectively, by all of us— individuals, brands, technology companies, government and non-governmental organizations—anyone and everyone.” Epic Games (developer of Fortnite), Amazon’s Twitch, and Roblox are already companies that are constructing the foundations of this new world. Facebook clearly has its eyes on the metaverse with its acquisition of VR headset developer Oculus in 2014 and its recent virtual reality platform in beta, Facebook Horizon. It’s likely that many of the big tech companies today will individually build unique platforms and experiences within the metaverse, that will eventually be stitched together once all have agreed to a set of shared regulations and provide access across all devices.
What’s the economic value?
You might be wondering how it’s possible to create economic value within a boundless, virtual world. We’re already seeing this through digital assets sales like NFTs thanks to blockchain’s ability to authenticate and verify these assets. The uniqueness and limitability of NFTs are driving the current value with the sale and purchase of almost half a trillion dollars at the time this article was published. Digital artists who were previously selling pieces for $100 are now having their work auctioned off by Christie’s in the millions now that the authenticity, rarity, and exclusive ownership right can be verified using a blockchain ledger. Basic economic principles are flowing into other virtual goods like clothing and even real estate (!!!).
What place will retail have?
Retailing is given in the metaverse but to think that shopping will happen in shopping venues like stores and malls, is short-sighted. Taking current shopping concepts and transporting them to this new world would lack imagination and effectiveness. “This will be an opportunity to break free from our industrial shopping form and function of physical stores and move light years beyond even the best digital shopping experiences of today.” Why would someone shop for a parka in a store when they could shop from inside an Arctic exploration experience led by a brand spokesperson? Or test drive a car on their local roads when you can experience it on a racetrack anywhere in the world? Like we’ve talked about before, marketers, store designers, merchandisers and quite literally entire companies are going to have to think very differently about what a store is and its purpose. Demand for virtual goods will increase dramatically as we spend more time in the metaverse and status symbols like homes, clothing, and jewellery will become just as important as it is today in the real world.
No can know for certain, but what most experts agree on is the metaverse is “an inevitable step in the convergence of humanity.” While the new world may take decades to build, there are massive investments being made now and in the short-term by organizations building our future. Each small step will create incremental growth until developers and users create a “tipping point”, following the same path as the adoption of the internet.
For brands looking to get ahead, they will be purchasing virtual real estate and hiring builder to create experiences and build their presence in the Metaverse while selling both digital and physical products to consumers who are present in both worlds. The marketing and communications industries need to pay close attention here with the metaverse being the next frontier in online interaction, exactly how social media completed altered online marketing. Brands will also need to transform their marketing and advertising strategies—how people act and what their preferences are in the metaverse could be very different than how they behave and their purchasing decisions in the the real world. Similar to how many didn’t think a presence social media was necessary in the early 2000s, brands will need to begin setting up metaverse teams to help them enter the era of Web 3.0. Consumers were first able to interact with brands on Facebook in 2009 by clicking “Became a Fan”—look where we are now.