Why the metaverse is the next big bet for retailers?

With emerging technologies, retailers and shoppers can expect a more personalised and immersive experience than avatar clothing and concerts in the metaverse, says Olivier Gergele, EY Asean Consumer Products & Retail Leader.

By Olivier Gergele / 8 Nov 2022

virtual art exhibitions are good for your health — Young Caucasian woman wearing VR headset looking at art objects while visiting modern exhibition using augmented reality technology

Metaverse, Tech

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The idea that new technology will revolutionise how we live, work and play has been proposed every so often. About a decade after the last such shift — when we saw how social, mobile and cloud come together — we are on the cusp of a new one: the metaverse.

Described as the successor to the Internet, the metaverse refers to a shared, persistent, 3D virtual realm where people can interact with objects, the environment, and each other via digital representations of themselves or avatars. It is not new; early versions already existed, albeit mainly in the gaming industry. Like the Internet in the late ‘90s, it is still unravelling; yet it is fast becoming central to conversations about retail’s future.

For retailers, it is a new shopping experience that bridges the physical and virtual worlds. Is the metaverse a valuable resource for retailers? Fundamentally, retailers must first think about what consumers desire, how they engage and how they consume.

Consumers' interests are shifting to the metaverse

Olivier Gergele, EY Asean Consumer Products & Retail Leader (Photo: EY)

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Consumers' aspirations used to be restricted to the physical world. Now, virtual goods and experiences are just as desirable and real as physical ones. Non-gaming companies are already experimenting with virtual products and experiences. Fashion brands are introducing clothing and footwear for avatars, artists are conducting metaverse concerts, and art galleries are holding exhibitions that are entirely digital.

For brands, this is just the tip of the iceberg in terms of consumer engagement and monetisation. According to the global EY Future Consumer Index, a small but growing group of consumers is interested in exploring emerging technology and digital channels. Nearly one in 10 people have used digital currencies, experienced the metaverse, or purchased a virtual product.

Interestingly, this baseline level broadly reflects where e-commerce was five years ago. Globally, it had a 10 per cent share of retail in 2017, which has since doubled. That level of retail penetration was enough for some observers to predict the end of high street shopping. Is the consumer industry at a similar tipping point?

"Nearly one in 10 people have used digital currencies, experienced the metaverse, or purchased a virtual product"

The metaverse will drive unprecedented opportunities for retailers to address new needs, innovate new products and services that transcend the virtual and physical worlds, and create additional usage occasions. Can they look at their business through a non-traditional lens and move from an omnichannel strategy — being present everywhere — to embrace the metachannel and being integrated across every channel?

There is no doubt that the metaverse presents both exciting opportunities and profound questions. Consumers can certainly expect more choices with personalised, resonating, and immersive experiences — and greater delight.

The views in this article are the views of the author and do not necessarily reflect the views of the global EY organisation or its member firms.

Related: Say ‘I do’ in Web 3.0 at Singapore’s first metaverse wedding

Metaverse, Tech