Metaverse – Revolutionizing How Consumers Shop


The Metaverse, through Virtual Reality (VR) and Augmented Reality (AR
) technologies, is harbingering new economic opportunities, transcending digital and physical worlds, across a multitude of industries. Retailers and brand marketers are creating online communities which are becoming marketplaces for virtual goods and digital assets. Companies are augmenting and virtualizing products to make digital shopping experiences much more realistic, mimicking and enhancing in-store shopping, resulting in more engaged customers and higher quality (fewer returns) sales. Today, the most advanced metaverse communities exist in online video games and social media.

New age consumers, millennials (26-41years), Gen Z(10-25 years), and Gen Alpha (<10 years), are engaged in immersive online experiences through digital identities, so-called avatars, and virtual hangouts. In these digital playgrounds, they are connecting with friends, chilling, socializing, and shopping for virtual goods and services. To influence these emerging consumers, brands and retailers are meeting them where they are – in the Metaverse. These virtual communities are becoming primal venues for brand introductions, interactions, as well as building footprints and loyalty. Retail and fashion labels are designing AR and VR metaverse strategies to offer products across omnichannel – online, in-store, on-the-go, and in-the-moment access to local and remote consumers.

Augmented Reality (AR) enhances visual experiences by adding digital real world informational overlay elements to a live view, thereby helping consumers make more informed decisions. In retail applications, AR enables users to experience virtual products and product holograms within their natural space setting to make more educated shopping decisions. AR filters allow consumers to try on digital garments without being physically present in stores. These features deliver superior consumer shopping experiences, boosting sales quality by minimizing returns.

Online “Try-Before-You-Buy” AR applications provide virtual product preview and trial experiences. Retailers such as IKEA, Home Depot, Walmart
, Kohls, Amazon
, Shopify, etc., and fashion brands such as Louis Vuitton, Gucci, Nike
, Balenciaga, Warby Parker, and more are already providing these AR experiences. Nextech AR provides underlying technologies to companies for implementing a variety of 3D AR experiences, from 3D models to Holo
grams. Evan Gappelberg, CEO of Nextech, commented, “I believe that 3D models are a must-have in 2022 and beyond. It will become increasingly difficult and impossible to compete and do business online without 3D models providing a competitive edge and high ROI.”

Virtual Reality (VR) immerses users in an alternate universe, transcending physical and temporal boundaries. Users create personalized avatars within these virtual worlds as an extension of themselves. They buy clothing and accouterment to dress their avatars, projecting an individualized sense of style, leading to a steady increase in the avatar economy and the rise of several digital-only fashion houses, such as Fabricant, Auroboros, RTFKT, Happy99, Republiqeand more.

Online games are more than just games; they are becoming content delivery platforms, transitioning towards multi-layered group experiences encompassing viewing, playing, socializing, and shopping. Online gaming platforms such as Roblox, Fortnite, Grand Theft Auto, Minecraft, and more are popular venues where consumers play games, meet friends, hang out, consume entertainment and shop. Gaming platforms are creating metaverse experiences in music entertainmentand concert events with live music stars, blurring the line between the physical and the virtual. Content creators are connecting with new customers, resulting in user base expansion for online gaming, increased engagement, content consumption, shopping, and ultimately increased monetization of franchises.


Brands and Retailers

The rapidly evolving metaverse market dynamics are opening numerous opportunities for traditional as well as emerging digital-only fashion brands to dress avatars with in-game skins and virtual garments, giving rise to the Direct-to-Avatar (D2A) commerce model. With almost 3 billion regular participants across multiple devices and platforms, the gaming industry generates billions in revenue from players, attracting established and new brands across industries that are adding choices and enhancing avatar experiences.

Traditional fashion brands and digital-only fashion houses have taken the lead on metaverse participation, offering D2A product lineups that include clothes, shoes, accouterments, and more. Brands are connecting and interacting with the younger, ‘online-first’ consumers and also collecting a growing treasure trove database of consumer behaviors as users try out these new D2A products in the Metaverse.

Brands such as Nike, Ralph Lauren, Louis Vuitton, Tommy Hilfiger, Balenciaga, Prada, Burberry, Gucci, Vans, Zara, Foreve21, and more are creating beachheads in the D2A market by offering digital product collections. In August 2021, Ralph Lauren released a 50-piece D2A collection on the social networking app Zepeto and in July 2021, American Eagle announced a D2A collection for Snapchat Bitmoji avatars. The digital fashion house Fabricant virtualizes D2A collections for brands like Adidas, Puma, and Tommy Hilfiger.

In January 2021, Gucci and North Face released a joint D2A collection on Pokémon Go using Wanna technology. Gucci has offered a wide range of D2A items in 2021, from $13 virtual sneakers to a unique Roblox handbag that resold for more than $4,000. Gucci also released a four-minute NFT video, Aria, that was auctioned by Christie’s for $25,000.

Nike has been filing metaverse-related patent and trademark applications. It has established a Metaverse Studio, and on Roblox platform launched Nikeland – a virtual space that includes arenas for gameplay and D2A product showrooms. It has also acquired the virtual fashion startup RTFKT, a popular digital fashion firm that sells digital sneakers.

In September 2021, luxury brand Balenciaga collaborated with Fortnite to sell four signature items to serve as skin and accessories for in-game avatars. For spring/summer 2022, avatars using digital renderings of famous models, presented the label collection.

The company Meta, on June 20, 2022, launched a metaverse fashion store where one can buy avatar outfits designed and offered by Balenciaga, Prada, and Thom Browne, for use on Facebook, Instagram, and Messenger. The product lineup includes the quintessential Balenciaga look, i.e., Ripped jeans and a plaid shirt, a motocross jumpsuit, a black skirt suit, and low-rise jeans paired with a crop logo tee and logo briefs. Prada’s offering includes the white tank top with logo triangle and tiered skirt that echoes the most recent runway and real-world product offerings. Similarly, Thom Browne’s offerings, a shrunken gray three-piece suit, pleated gray skirt suit, and shorts outfit, are inspired by Browne’s trademark uniform.

Auto Industry

Virtual auto showrooms offer a way to research, explore, and purchase vehicles from the comfort of anywhere. A suite of automotive AR and VR applications enables buyers to explore thousands of models with interior/exterior options, rotate vehicles, change the paintwork, “sit” in the driver’s seat, and go for a virtual test drive. RelayCars is an app where one can explore thousands of cars in AR and 3D using a smartphone, tablet, or computer, creating an at-home automotive showroom experience. Luxury auto brands Maserati, Aston Martin, Tesla, and Rolls-Royce have launched virtual models of their cars in online gaming platforms.

Presently, avatars are not cross-platform creations. Digital purchases in one platform cannot be used in another, which may change as the technologies evolve.

AR and VR technologies are profoundly changing how consumers interact with brands and retailers to make their purchase decisions. Advances in technology, better hardware, and higher-fidelity virtual experiences will encourage many consumers to spend more time in the immersive metaverse where 3D avatars are the primary medium of interaction with others. As the gap between physical and virtual continues to blur, projecting self-identity and personal fashion through digital avatars will gain importance. Retailers, fashion brands, and creators are transcending the physical boundaries and entering the virtual worlds creating digital products and fashion runways to stay connected with their evolving customer base. Metaverse is expected to substantially transform and revolutionize how consumers shop!


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