Since taking a lot of inquiry lately from retailers asking about metaverse, Web3 and NFT, we have just published a document that attempts to answer the question Should Retailers Take The Metaverse Plunge? for Gartner clients. While there is much more detail in the linked research, here are some relevant observations about taking the metaverse plunge:
Metaverse – What it’s Not!
- “The” metaverse. It is not one environment, there are multiple environments today and that will continue for the next several years.
- Web3. While the terms are often used interchangeably, Web3 is an enabling technology that will be part of metaverses.
- Stable. Cryptocurrencies and NFTs are highly volatile, and value is difficult to maintain.
- A source of consistent revenue. And won’t be for retailers until at least the end of this decade.
- Something that can be ignored. While still emerging and very hyped, steps must be taken to learn about immersive experiences.
- Something the retailer can control. The premise of Web 3 is decentralized control, and this will become critical as metaverse evolves.
- A safe place for the retailer to play untethered. Someone on the executive committee needs to be in charge to coordinate strategies and protect brand assets.
The Metaverse Plunge Has Many Implications for Retailers
Regardless of the future of metaverses, immersive technologies such as augmented, virtual and mixed reality (AR/VR/MR) will be an integral part of the future of shopping and are already reshaping the retail industry. These technologies are not expected to drive a wholesale translation of the existing e-commerce or physical environments into metaverses. Rather, retailers should engage with these technologies to deliver new and innovative business models and shopping experiences to excite retail customers. Planning for this wide-ranging change, while remaining relevant in the present, will challenge all retailers. They will at least have to address their business strategies, the recruitment and retention of talent and skills, and the magnitude of business and IT costs of implementation.
Merchandising for the Metaverse
Merchandising will see major impacts from the metaverse plunge. Since my blog last year we have seen widespread expansion of experiments, particularly in athletic footwear, and luxury business. Just last month, Tiffany launched a sale of its CryptoPunk pendants that can be purchased by blockchain-verified owners for 30 Ethereum (ETH), ETH’s cryptocurrency is valued at about $51,000. Launched on 5 August, the physical counterparts sold out in just 20 minutes, netting an estimated $12.5mm.
Every retailer will face different obstacles and must approach the metaverse plunge with careful consideration. The uncertainty around metaverse, Web3 and related technologies, combined with the lack of consistent revenue opportunities, will cause some retail leaders to dismiss it as just hype. To answer the question “should retailers take the metaverse plunge,” Gartner recommends that retailers take a strategic and measured approach that will support learning, customer and associate experimentation and opportunistic revenue exploitation.