What Retailers Need to Know About the Metaverse
It’s technical, complicated and largely untested, yet retailers shouldn’t be averse to the metaverse.
“The big question retailers have been trying to answer is whether or not an investment in extended reality technologies will tangibly grow a brand’s fan base and create real business opportunities that don’t already exist in-store or through a typical online website presence. The short answer is yes,” said Mike Riggs, managing principal of IA Interior Architects, a global firm of architects, designers, strategists and environmental specialists.
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“Like most things in life, a moderated approach to adoption and consumption would work best for retailers, as the real and virtual worlds continue their convergence. Retailers should not ignore the inevitability of at-home XR (extended reality) technologies influencing in-store experiences.”
Riggs co-authored a research report, titled “The Case for Retail in the Metaverse,” based on an IA survey last September that achieved a response rate from 1,012 of 3,500 U.S. adults. The idea was to explore the future for extended reality in retail environments, and understand how it can appeal to different demographics across various income levels, ages and ethnicities.
Twenty-five percent of the respondents were 35 to 44 years old; 23 percent were 25 to 34; 49 percent were white; 25 percent were Black or African American; 15 percent were Latino or LatinX.
Eighty-three percent of the respondents resided in urban or suburban environments; 17 percent lived in rural locations. Fifty-six percent had a bachelor’s or higher degree, while about 1 in 4 attained a high school diploma or equivalent.
The most represented average household income was the $100,000 to $150,000 bracket, at 19 percent, followed by $50,000 to $75,000 at 18 percent, and $35,000 to $50,000, 13 percent.
Among the key findings:
Eighty percent of respondents experienced XR; 71 percent used XR on a daily or weekly basis.
Fifty-eight percent of 55- to 65-year-olds and 77 percent of those 65 and older have never used XR, and 30 percent of women aged 45 to 55 have never used XR.
Headsets and monitors were the most popular and frequently used to access XR.
Almost seven in 10 respondents made purchases within an XR environment in the past, mostly related to gaming.
Black and African American respondents were 1.8 times more likely to have made XR purchases.
For those that never made a purchase in XR, the key deterrents were security concerns, lack of access to appropriate technology and the right kind of products being unavailable.
More than half of the respondents reported previous experiences using extended reality experiences in a physical retail environment; 95 percent reported having positive experiences using in-store extended reality, largely due to sufficient support and guidance and the ability to use cutting-edge technology.
“One of the biggest takeaways for retailers, IA initially found, was that there was not a detailed understanding within the marketplace that was supported by research — one that took stock of who, when, where, and how consumers were engaging with extended reality technology that could impact both a retailer’s and consumer’s in-store experience. These initiatives require substantial financial backing, and retailers could stand to use this ‘pause’ in the metaverse frenzy to become more strategic in positioning themselves for the highest, greatest XR impact,” said Riggs, in an email exchange with WWD.
“Rather than the tech-savvy teen male — typically the main consumer of these technologies — according to our survey, female consumers 55 years and older appear to be a key driver of future adoption in XR. Retailers should be aware that this segment is eager to learn and willing to spend since they are a part of the highest income group. Brands that develop XR strategies to enhance this segment’s education and improve their accessibility to products and services that can improve their health and wellness, will create a future competitive advantage.”
To encourage consumers to use extended reality devices in a retail environment or purchase them, Riggs advises retailers to:
Provide in-store associates to guide customers through the use of XR technologies.
Ensure easy and more secure payment methods.
Provide opportunities for groups of friends and family to shop within the XR realm together while in a store, to expand spending.
Provide opportunities to easily customize familiar products using XR.
Supply equipment access for those with physical and visual impairments.
He concluded that “due to the lack of evidence-based strategies based on real consumer opinions, the adoption of widespread XR from both companies and consumers has been lacking.”
Asked which retail sectors are most suitable for the metaverse, Riggs replied: “The opportunities and suitability for various retail sectors are varied yet all are still in their nascent stages of proof-of-concept. The most visible and widely discussed (although not necessarily most successful) points of entry into the metaverse to date have been through experiential retail events, such as concerts and fashion shows. These have generated rather mixed reviews.
“That said, IA’s research has shown that those retailers whose products or services can be customized are motivators for both the novice and veteran XR consumer to engage with the metaverse.
“Automotive brands have successfully brought XR into their design centers, allowing customers to customize interiors, while physically sitting in a mockup of their luxury seating with virtual reality goggles. Home goods, furnishing stores and design centers selling both larger or complements of products for rooms can lean into XR both in-store as well as the metaverse to assist in the design, visualization, sales and delivery of products right to your front door,” Riggs added.
On the other hand, Riggs said that soft goods have a while before the metaverse is more than a brand awareness vehicle. “There is untapped development needed before the next iterations of the metaverse come around,” he said.
Guy Messick, IA Interior Architect’s senior director for digital technologies, also responding to WWD via emails, wrote: “Our firm has been utilizing virtual reality (VR) over the past eight years for a variety of use cases. We have found that VR allows our designers and clients to better understand the built environment. Three years ago, we integrated extended reality (XR) into our practice. A notable discovery is that our clients who are engaging IA in virtual environments are asking for bespoke “Metaverses,” secure spaces not yet connected to a wider metaverse. The desire for security is the main reason why, and the focus on the client’s brands and how they are portrayed is another.” He said that his firm has been “actively collaborating with clients, like CBRE in Dallas, to develop cutting-edge XR workplace environments.”
The research highlights four modes to experience extended reality — headsets; monitors; the computer assisted virtual environment or “CAVE,” which is a room for virtual reality that can be shared by a group of people, and powerwalls, which are large 3D displays of products. Asked to cite some examples of retailers offering these XR experiences, IA executives pointed to Ikea and its proprietary app called The Place for augmented reality via the iPhone and iPad; Lucid Automotive, which provides virtual reality headsets in its stores with seating mockups, and Canada Goose, with its interactive boot fit, 3D apparel displays, monitors and powerwalls.
In its research, IA characterized CAVE-based rooms as the greatest opportunity for stores to extend merchandise offerings. The virtual reality environment consists of a cube-shaped room where the walls, floors and ceilings are projection screens and participants wear VR headsets and interact through input devices such as wands, joysticks or data gloves.
IA concluded that the top barriers to XR purchases in stores and online are:
Concerns about security of personal information.
Lack of access to and/or expense of technology.
Not having the right product or service.
Inability to touch, feel, test or try products.
Not easy or secure to pay.
The top motivators to make an XR purchase include:
In-store personnel to guide you through XR.
Easier, more secure payment methods.
Ability to shop in XR with friends, family or groups.
Accommodations for physical or visual impairments
According to the survey’s findings, the types of products and services best suited to an XR experience are virtual tours of museums, watching comedy movies and music festivals.
Responses from the survey also suggested concerns about dizziness and motion sickness but that XR would be good for people dealing with anxiety and don’t enjoy going out and still want to shop.
For suburban women around 45, with little or no experience using XR, marketing strategies should focus on showcasing nurturing and health-conscious aspects. For women under 55 and living in suburbia, marketing should focus on promoting cost-conscious and practical advantages of using XR.
For urban, highly educated men who are “explorative and hedonistic” and engaging in XR daily or weekly, and making purchases beyond games, marketing should focus on cutting-edge XR technology, with “fun-seeking and liberating elements.”
In a section of the research report IA advises, “Specifically, when developing XR platforms, retailers should consider how to better reach, connect with and include ethnic, religious and linguistic minorities in the dialogue about technology and then better align that technology with their needs. Current and future XR respondents spoke clearly and almost uniformly about their concern and need to develop reliably safe, secure environments in any future of extended reality.”
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