The metaverse market is predicted to have an impact value of between $8 trillion and $13 trillion by 2030.
Within the next decade, Australia's retail sector could see a major overhaul, with companies taking up space in the metaverse to create brand awareness and to provide shoppers with a novel purchasing experience.
"The metaverse is rapidly transforming retail by creating new experiences and altering the ways in which customers interact," Edith Cowan University's (ECU's) Professor of Marketing and Service Science, Professor Sanjit Roy said.
"The metaverse in retail enables consumers, through digital avatars, to traverse a virtual shopping area and interact with fellow avatars and retail employees. The metaverse blends the physical and virtual worlds, enabling customers to interact with one another in a virtual environment, and is increasingly being used by businesses as a platform to drive customer engagement."
Italian fashion brand Gucci has created "Gucci Vault Land" in the metaverse, enabling users to gain access to the brand's vintage products, which are on display but unavailable for sale. This initiative is part of a larger strategy by Gucci to enhance the sale of its physical goods, but also to sell virtual versions of its products to metaverse users.
"Several other retailers are looking to compete in this space, and the metaverse market is predicted to have an impact value of between $8 trillion and $13 trillion by 2030," Professor Roy said.
Professor Roy noted that the metaverse moves made by the global brands could result in a trickle-down effect to local retailers, although not all retailers are likely to make use of the technology.
"There are currently no clear pathways on how to implement metaverse into a retail strategy, but one of the clear deciders would be the target audience. Brands targeted at the older generation are less likely to have success in this space, compared with those brands targeted at a younger generation," he said.
In addition to improving customer engagement, the metaverse can support customer decision-making, simplifying their lives, and could offer users the opportunity to fulfil their social needs without physical interaction, thereby further contributing to their overall well-being. In addition, the design of metaverse should be such that customers find novelty in its use and obtain enjoyment from using it.
However, like all online interaction, shopping in the metaverse is not without drawbacks, including privacy and security concerns, with the immersive nature of the metaverse meaning more user data would be gathered. Furthermore, retailers should emphasise making the metaverse environment easy to use, requiring less effort from the potential customers.
"There will always be a risk when dealing in people's digital information. But the big differentiation in the metaverse space will be between the retailers who can manage the risk, and those who can't," Professor Roy said.
The paper titled Identifying the metaverse value recipe(s) affecting customer engagement and well-being in retailing was published recently.
