Although the metaverse is still a relatively new technology, research among the UK’s top 100 retailers reveals that 12% of retailers are already using it and 39% plan to in the future.
According to the study by UK law firm TLT, the main ways retailers see themselves using the metaverse include marketing (35%), engagement (31%) and clubs and communities (29%), while only 27% see themselves creating experiences for consumers, such as games, competitions and virtual classes.
However, there is a mismatch between this and how consumers see themselves using these virtual worlds, with an overwhelming majority (72%) saying experiences, followed by engagement (70%), marketing (67%) and clubs and communities (65%).
Today, retailers are using the metaverse for engagement (12%), marketing (12%), experiences (9%) and clubs and communities (8%), with slightly fewer using it to sell physical (7%) or digital (3%) products and only one of the top 100 retailers using it for authentication.
Legal and commercial risks
Personal data will be crucial to retailers’ metaverse strategies, with more than half seeing the potential to use it for targeted advertising (54%) and personalised experiences (51%).
Retailers rightly identify cyber security (54%) and data protection (43%) as two of the biggest legal risks in the metaverse, meaning the correct policies and handling procedures need to be in place. Harassment/Abuse is the overriding concern (62%), while others include IP infringement (54%), cross-jurisdictional issues (49%) and transparency and mis-selling (45%).
When it comes to the impact of the metaverse on environmental issues, retailers are divided: 20% believe it is mostly part of the solution, for example by reducing demand for physical goods, while 18% say it is mostly part of the problem, due to its reliance on data centres.
Retailers are also divided over the long-term importance of the metaverse, although it may be too early to dismiss it outright. Almost two thirds (61%) are not currently planning to use it, and 85% don’t think it will ever be as important as physical stores, retailer websites, online marketplaces, social media or loyalty and incentive schemes.
Perran Jervis, head of retail and consumer goods at TLT, says: “While the metaverse was largely considered irrelevant to most retailers when it was first conceived, millions of consumers now engage with brands in this way, particularly in the fashion industry. As a result, more retailers – beyond just fashion – now want to be there.
“The metaverse can be used for a variety of reasons, but our research reveals a mismatch between how consumers and retailers currently envisage using it. This is a risk, as getting this wrong could damage a retailer’s brand and reputation within its customer base both in the metaverse and the real world, as it did for some brands when first using social media.
“Retailers have been trying to create better in-store experiences for some time and the metaverse provides a new opportunity in this respect, but it does require an entirely different approach as the retailer creates the whole framework in which users operate – and they need to do this within the law and be respectful of those users’ expectations.”
Jervis concludes: “In the current economic climate, it’s important for retailers to show they understand and are listening to what consumers are looking for. Retailers can rarely afford to ignore new trends; success will lie in finding ways to minimise the uncertainty that comes with new technologies and pinpointing the opportunities.”