Metaverse Ecommerce: How It Changes Retail and Why It Matters
If you haven’t come across the word “metaverse” recently, then you are probably living in another universe, one without the internet for certain. The year 2021 saw the “metaverse” go from only jargon found in sci-fi literature to become the namesake of limitless tech opportunities being heralded and ushered forward by tech giants and startups alike. What’s the excitement all about? Allow me to shed some light on this.
Venture Capitalist Matthew Ball defines metaverse as a “quasi-successor state to the mobile internet”. It is believed that the change will be even bigger and more impactful than when we moved to the mobile internet in the last decade.
While explanations and debates around the definition of metaverse could go on for days, the simplest interpretation is that it is a 3D digital reality where everyone can play, work, socialize, learn, and shop. It is not a replacement for our physical reality, but an extension to better serve it.
You may be weary (or even wary) from hearing the terms “decentralization”, “NFTs”, and “web 3.0”. Even though there is an inordinate amount of speculation and hype, these are also promising changes to our society in exciting and practical ways. For this article, I hope to focus on one thing — the metaverse e-commerce.
While the metaverse is still in its nascent stages, the involvement of every big tech company is already a strong indicator that something is about to change. This change shows no sign of slowing, and most of the world’s most famous brands have embraced it to engage their customers in the metaverse, like LVMH, Nike, and many other ones.
Why our current e-commerce is not enough
Yes, online shopping has made our life so much easier, especially during and after the pandemic. However, traditional e-commerce has not evolved from the catalog view in 25 years since it was first introduced.
The current static interface presents every product and brand in the same way. Whether you are shopping for apparel, furniture, a laptop, or even a car, you go through the same process and interface as the early 1990s when the internet was initially introduced.
This approach is great for what we can call “utility shopping”, where customers know exactly what they want and hope to find the product, place an order, and receive it as soon as possible. They simply see shopping as a utility.
However, if you spend some time in any mall you will realize that most customers also have a second shopping mode — “experience shopping”. Especially for Gen Z, most consumers also hope to get the most out of their shopping experiences, from walking in the store, trying different products, discussing with friends, and receiving expert advice in-store.
Not being able to meet consumers’ expectations here has impacts on businesses, and the most common consequences are the following:
High Bounce Rate: because most eCommerce sites cannot offer engaging content in the first couple of seconds, the average bounce rate for e-commerce websites is 47% in 2020¹. If your website has a bounce rate of 30%, congratulations you are way above average. However, imagine if a third of all shoppers in your physical store leaves immediately. Something must be wrong right?
- Low engagement: the average time spent in a brick-and-mortar store is 42% higher than on a single-retail website.² The lower visit duration usually means a lower average order value, also known as the basket size. A longer stay in a physical store usually means customers might make other impulsive purchases, especially after they see a product that was not on their shopping list.
- low conversion: The average conversion rate for brick-and-mortar stores is around 20–40%.³ At the same time, the average e-commerce conversion rate ranges between 1% and 4% for different industries and brands, with a global average standing at 2.58%.⁴ While the experience is not the only factor making the 10x differences, it is one of the biggest factors.
- high return rate: 20% of all online purchased products get returned, compared to only 9% for products bought in a brick-and-mortar store.⁵ e-commerce businesses in home furnishings, footwear, and fashion typically see high return rates due to the difficulty of judging a product’s suitability online.
What metaverse means for e-commerce
#1: Immersive Experiences
With the right tech stack, a storefront on metaverse can provide an immersive experience for all consumers. This means providing stunning photorealistic and high-resolution showrooms to allow consumers to make better-informed purchasing decisions and feel more confident about the product and branch they choose.
92% of consumers rank “visuals” as the most influential factor affecting their purchase decision.⁶ While high-quality images can provide a reliable representation of the product, a well-made video is more informative and can show products in action. An immersive 3D scene can bring the best product details to consumers online.
#2: Social Interactions
Similar to Mark Zuckerberg, I also believe that the next platform will be “an embodied internet where you are in the experience, not just looking at it.”⁷ Metaverse e-commerce would allow consumers to be fully engaged in an embodied experience using their own digital avatar to shop with friends and consult professional salespeople in the store.
44.7% of US consumers said it was important to speak with someone during their final purchase decision.⁸ Even in a post-pandemic world with the convenience of buying everything online, people are still craving social interactions, and retailers need to support this through an embodied metaverse e-commerce.
#3: Gamified Process
Metaverse eCommerce would allow brands to entertain and engage consumers at a completely new level: offering customers the chance to earn loyalty points through a scavenger hunt in your store; collecting NFT badges for checking out different products; and redeeming rewards and coupons by completing tasks. Gamifying the eCommerce experience is key to creating customer loyalty and retention.
What I’m Building at Matterverse
My name is Shawn, Co-Founder @ Matterverse, and we are empowering brands to bring in-store experiences online with metaverse eCommerce. Matterverse is the Shopify for web 3.0, a no-code editor for anyone to create photorealistic and game-like virtual storefronts on their website.
The industry has only just scratched the surface of metaverse eCommerce, and we are at the forefront of it, powering the world’s most famous brands to build a presence in the metaverse. In 2022, we will see metaverse eCommerce become more concrete, and brands will be able to engage with consumers at a completely new level and open up new dimensions for branding and marketing.
If you are interested in learning more about us and working on a pilot project with us to see how your brand can become a pioneer in this new trend, reach out to me!
[1]: 2021 Digital Experience Benchmark by Contentsquare
https://contentsquare.com/blog/what-bounce-rate-says-about-your-customer-experience/#:~:text=What%20is%20the%20average%20bounce,%2C%20and%2045%25%20on%20tablet.
[2]: In-Store vs. Online Comparison by ICSC
https://www.icsc.com/uploads/press/WSJ_AD.pdf
[3]: Retailers Counting On Conversion Analysis To Drive Store Metrics by Touch Points
https://www.retailtouchpoints.com/topics/store-operations/retailers-counting-on-conversion-analysis-to-drive-store-metrics
[4]: E-Commerce Conversion Rate Benchmarks by VWO
https://vwo.com/blog/ecommerce-conversion-rate/
[5]: The Plague of Ecommerce Return Rates and How to Maintain Profitability by Shopify
https://vwo.com/blog/ecommerce-conversion-rate/
[6]: Consumer Psychology Behind the ECommerce Checkout by Poweredbysearch.com
https://www.poweredbysearch.com/blog/consumer-psychology-ecommerce-checkout/
[7]: Founder’s Letter, 2021 by Meta
https://about.fb.com/news/2021/10/founders-letter/
[8]: Experience is everything: Here’s how to get it right by pwc
https://www.pwc.com/us/en/advisory-services/publications/consumer-intelligence-series/pwc-consumer-intelligence-series-customer-experience.pdf
