15 February 2023
At NRF 2023 there was a lot of buzz around the metaverse and how different retailers are getting involved in the metaverse to enhance their brand. In this blog, I’ll explore the implications of the metaverse for bricks-and-mortar retailers and examine the conundrum for luxury brands.
I’ll begin with a short introduction to the metaverse – don’t worry, I’ll keep it brief! While still very much in its early stages of development, the metaverse is essentially the digital universe that houses our virtual experiences. It is an immersive, online space where avatars – cartoon-like representations of ourselves – can walk around, play games and explore virtual stores.
The metaverse has the capability to provide consumers with an immersive, virtual environment that explores a unique brand experience. When the technology is better, the metaverse has the potential to make a more engaging and useful experience of online shopping. It would essentially allow consumers to explore and discover new products by bringing online shopping closer to what consumers can accomplish in stores – without ever having to leave their homes.
Bridging the gap between the physical store and online shopping by enabling consumers to digital interact with a product is a uniquely fascinating advantage, especially since GE Capital Retail Bank found that 81% of consumers conduct online research before making a purchase. So, in the metaverse a consumer can “use” or “try on” the product.
But as retailers know, shopping in store is more than just the product, it is a physical interaction with their brand. So how are brands replicating real-world experiences in order to make a connection between consumer, store associate and brand?
At NRF it was fascinating to hear from the Chairman and CEO of LMVH North America, Anish Melwani, and the VP and CTO of LVMH North America, Antoine Tessier, about how their brands can create engaging and memorable retail experiences in the metaverse. To a retailer with a rich DNA and heritage, it is essential to leverage these digital experiences to enhance their brand and what makes them desirable – and not just participate because they can. As Melwani noted, it is in the fabric of the metaverse to not be permanent, so how can LMVH tie that into the longevity of their brand and product?
Simply, LMVH is looking at the metaverse to sublimate their physical product, but in such a way that’ll reinforce the heritage and DNA of their physical brand. One way they’ve been able to do this is with the NFTiff – Tiffany and Co’s now sold-out NFT.
ICYMI, an NFT – a non-fungible token – is a digital receipt that confirms ownership. The asset connected to the receipt, often digital pictures, are verified by the NFT as the original and are therefore one-of-a-kind.
LVMH has bundled an NFT – in this instance a CryptoPunk – with a limited-edition Tiffany and Co’s custom piece of jewelry. This NFT can give customers the confidence that their products are authentic and ethically sourced, since the NFT contains a digital receipt of your diamond’s journey.
LVMH has been able to honour their brand DNA in this instance, since they have been able to pull something physical out of the metaverse.
The metaverse is catapulting the retail industry into a new era of shopping, and while it’s certainly fascinating to bridge the gap between online and in-person shopping – it still has its setbacks. As interestingly, as in the case with LVMH, it appears the best way to sustain the longevity of the digital Metaverse is to also incorporate the physical experience.
LVMH is not the only instance, as Mark Zuckerberg himself is opening a bricks-and-mortar store for his metaverse. Last year, Meta opened their first store in Burlingame, California and to try to engage the meta-ambivalent through a hands-on, curated experience – which meant sampling VR headsets, AR glasses and smart video calling.
A move like this underlines a thriving future for bricks-and-mortar retailers, even for digital giants like Meta. So, while the metaverse offers a unique shopping experience, retailers with physical stores still possess a unique advantage that allow them to engage more with the metaverse than strictly online brands: they’re based in the physical world.