Pushing aside uncertainty about how it will evolve or what it will amount to, retailers have started to stake claims in the metaverse.
It’s been widely reported, for example, that Walmart has filed trademark applications indicating plans to create its own NFTs and cryptocurrency, and it could soon be selling virtual appliances, home décor, and toys.
For many, it’s hard to believe that virtual real estate is even a thing, or that companies could exist to extend loans for people looking to acquire it (metaverse mortgages). But it’s a fact, nonetheless, that virtual parcels in certain online worlds are climbing in both popularity and price, with Atari reportedly nabbing more than $4 million for avirtual plot in The Sandbox metaverse. And if people are willing to pay for space in a world that is limitless, then everything seems to be on the table.
Ralph Lauren announced a digital apparel collection as part of its partnership with Zapeto, an app for creating and personalizing avatars. The designer said the deal demonstrates its belief that innovating in virtual worlds is essential to engaging the next generation of consumers and builds on previous forays into immersive and augmented reality that have included a Bitmoji Collection launch and a partnership with G2 Esports to ink a long-term deal to outfit an esports gaming team.
“Ralph Lauren has always embraced new environments, and we’re excited to push the boundaries in this emerging arena,” said Alice Delahunt, the company’s chief digital officer. “Making our product available to purchase and wear digitally and allowing consumers to experience the brand in immersive new ways is the next frontier.”
Fashion brands are leading retail’s exploration of the metaverse, including Forever 21, Louis Vuitton, and Tommy Hilfiger. Nike has been particularly aggressive, say retail analysts, launching Nikeland on Roblox, an online platform for playing and creating games, and acquiring a virtual fashion startup RTFKT that makes virtual shoes and collectables. Vans has also teamed with Roblox, creating ‘Vans World,’ an interactive virtual skate park where users can also buy exclusive Vans merchandise.
Unlike many fanciful depictions of the metaverse, virtual stores seem a safe bet, allowing for more immersive shopping experiences and an upgrade to the current online shopping experience. Analysts say they could help retailers to reduce return rates, expand their customer base, and enhance personalization and shopper engagement.
Helping to fuel retailers’ interest in the metaverse—and, undoubtedly, their FOMO—is the exploding popularity of non-fungible tokens (NFTs), a non-interchangeable unit of data stored on a blockchain, which facilitates digital representations of popular offline items. NFTs have surged in popularity, and brands are finding creative ways to use them to enhance shopping experiences and generate revenue.
Finally, some retailers are poised to capitalize by servicing the infrastructure needs of an expanding metaverse. “Best Buy will be extremely well positioned to be a multi-year beneficiary given its market leadership position, existing supplier relationships, and omnichannel capabilities,” according to a research note in January by Anthony Chukumba, a Loop Capital analyst.
Because no two people are likely to have the same idea about what the metaverse actually is, it’s difficult to assess its security implications. But the concerns of those who have studied it seem to be falling into a few buckets.
Brand protection. Real world shopping provides multiple cues to shoppers of a brand’s validity. Online shopping less so, but there are still indicators of whether you’re shopping a legitimate online store or brand versus a counterfeit. Daniel Cohen, vice president of cloud services at Radware, wonders if the metaverse will supply shoppers with those same signals, or if fake adverts and bogus products will be harder to detect. “Without the right forethought, preparation, and protections, the metaverse could quickly distort a brand’s values,” he wrote in Charged, a magazine covering retail technology.
Identity and privacy. The use of avatars is likely to make the difficult job of authentication more challenging. Distinguishing between customers and fraudsters, identity theft, and what to do if one avatar abuses another, initiates unwanted contact, or engages in sexual harassment, are all issues that may need to be thought through depending on the platform.
Cybercrime. The metaverse is emerging from an uncertain blend of augmented reality, virtual reality, the Internet of Things, and crypto—and this will open new channels for cybercriminals to target businesses and individuals, according to a forecast in Forbes by Stu Sjouwerman, CEO of KnowBe4 Inc., a security awareness training and simulated phishing platform. As organizations rush in, cybercriminals are likely to find ways to exploit these channels to launch attacks, and organizations will need to enhance risk assessments for their infrastructure and connected devices to limit the damage they can do.
It will be important for retail to address these issues quickly. Analysts have noted that gaming—a consumer-led industry like retail—gave birth to the metaverse, so retail is expected to be on the front edge of adoption. In other words, retailers won’t have the luxury of time to learn from the security mistakes of other industries.