The Meta verse Will Radically Change Retail
American venture capitalist Chris Dixon once said, “The next big thing is going to begin as an toy” the statement that, according to him, is at the core of the reason we often dismiss innovations which, when looked at in hindsight will reveal themselves as instruments that can bring about significant technological and societal changes.
A large part of our initial disdain is due with the reality that in their early days new technologies often “undershoot,” as author and academic Clay Christensen put it, the demands and expectations of the users. The first phones were limited and insecure. Initial Skype calls, made 127 year later subject to dropping connections and freezing. It was simple to dismiss both technology, like many others consider them to be fanciful and without any long-term benefit.
However as Christensen noted that these technologies typically tend to advance in a manner that surpasses the needs of consumers. In 1973 the first phones on the market were heavier than four pounds and were primarily designed for single-use. Nowadays the iPhone weighs in at eight tons, packs 100 times the computing capacity of Apollo 11 spacecraft, and can perform a variety of functions that we use in our everyday lives. For most users, it’s almost impossible to imagine a life without it.
It is all relevant now because we’re in the midst of a myriad of technology such as virtual reality headsets as well as augmented reality technology gaming platforms blockchain, crypto currencies, crypto currencies and non-fungible tokens (NFTs) as well as virtual goods, and many moreeven though they are initially toy-like, are together, bringing us to the “Metaverse” which will alter the nature of living on Earth and how we live, work or play and how we shop, and much more.
What is the Metaverse?
The concept Metaverse is traced to the 1993 science-fiction novel “Snow Crash” which is believed to have fundamentally changed the viewpoint of individuals such as LinkedIn CEO Reid Hoffman, completely altering his perceptions of technological advancement. Simply put as possible, Metaverse is Metaverse is the continuous, collective and parallel reality created by the joining of all virtual worlds to create an unimaginable universe that we can effortlessly traverse.
The most important word in this context the key word here is “persistent.” As the physical world continues to function when you go to bed The digital world in the Metaverse will remain evolving and changing even when the user is disconnected from their computers. To put it simpler, consider that in contrast to the internet of the present, where we are all moving and pulling data from servers in a mostly non-synchronous manner, the idea of a metaverse will offer us the ability to go into an “persistent” (always constantly) alternate reality in which we are able to interact in a totally “synchronous” (real-time) manner in real-time with things, places, and people. Imagine a world in which there are, for example thousands of students studying in the field of The American Civil War can be transported directly into the battlefield in Fort Sumter and observe it directly. Additionally, we’ll be able pull information and experience from the Metaverse into the actual world and overlay them on our physical surroundings.
The Metaverse is a kind of parallel reality that allows us to be a part of, or play with, the Metaverse. However, to be clear it isn’t just an alternate version of the internet that we are using in the present. Metaverse is the term used to describe what’s happening. Metaverse is what replaces the current internet completely.
The concept of an alternate world has been discussed for over two years, our experiences with the pandemicgoing through locks, social distancing, and the overwhelming feeling of isolation and disconnection which they created is what has intensified our collective imaginations about the possibility of a new reality in which people are able to be in contact in real-time, anytime, with other people (potentially millions or thousands of other people) and share experiences. A world where people can travel, without restrictions anytime and anyplace they want to. A world where every adventure is possible and easily accessible.
Who will construct Metaverse?
In the present we are witnessing companies working to build the foundations of an exciting new world. For instance, Fortnite, developed by Epic Games in 2017, lets players play three play modes including the “battle royale” mode in which as many as 100 people battle to the death in a last-person-standing battle free-for-all. In 2019, when asked whether Fortnite was an actual game or just an online game platform Epic Games founder Tim Sweeney said, “Fortnite is a game. However, please ask the question for the next twelve months.” In the following twelve years, Epic started to address this question by transforming Fortnite to create a world that is it’s own and blurring lines between virtual and real experiences. For instance musician Travis Scott delivered a five-concert program in Fortnite which attracted nearly 50 million players. Additionally, Epic isn’t the sole company that views gaming as a way to enter the Metaverse.
Livestream gaming on Amazon’s platform Twitch has over 140 million monthly unique users who, collectively have watched nearly 2.2 billion livestreaming hours video in April alone. The brands have noticed. The fall of 2019, for instance, Burberry became the first fashion brand to livestream the launch of its new collection on Twitch with over 40,000. To believe that Amazon does not have plans of being the most prominent retailer in the Metaverse is to be ignorant.
Roblox is a different online gaming platform that is, as per Roblox, “over half of all US teens between the ages of 16” played on in 2020. The main difference in contrast to Roblox and other platform for gaming is that the games available on Roblox’s Roblox marketplace are created by the users of the platform with a basic development toolkit that is provided by the platform. This community-driven method is that within just a short time, Roblox has amassed millions of game and entertainment. In fact, Roblox has become its own little economy, in which creators of content can make money off their creations through the development games with virtual items and improvements that are available to gamers, with the profits being divided equally between Roblox as well as the creator of the game. In some instances, the top creators have already earned more than $1 million per yearin real money.
Facebook also has clearly tapped in to its potential in the metaverse as evident by its acquisition in 2014 of VR headset maker Oculus and in recent times, its development of Facebook Horizon the virtual reality platform that is currently being tested in closed-beta. Its current version Horizon lets individuals and small groups to connect and participate with a range of experiences. It basically allows users to enter an actual, real-time experience similar to Facebook. Similar to Roblox, Facebook believes that the content experience in Horizon will be created not by Facebook however, but rather by individuals and organizations.
The key point here is the fact that the Metaverse is not being developed by one particular individual or company but rather in a collective way from all of us including brands, individuals tech companies, governments and non-governmental organizations Anyone and everyone.
Companies like Facebook, Google, Disney and Amazon are all working to create their own unique experiences and platforms in the Metaverse, they will be required to sign the same set of protocols to allow interoperability across domains as well as accessibility to all devices. Since the real promise of the Metaverse is only going to be realized when all this “worlds” -whether it’s Fortnite, Facebook Horizon and many more -can be joined to create a world where it is possible to seamlessly transfer from one place or experience an experience in real-time.
The economic value of the Metaverse
How can one make money in an infinite, digital universe?
In the world of physical things the value that an item has is determined by a set of fundamental dynamics which include authenticity, scarcity and ownership. Up to now, the internet was, by its very nature, unlimited in size and in the quantity in terms of content. However, this limitless nature that has led to the commodification of many digital goods. In the end, the internet was created to facilitate file exchange, but not file purchasing.
For instance, what is a highlight clip of LeBron James? In the event that I take it off YouTube there’s nothing to be gained. There’s nothing exclusive and authentic or distinctive about it. Anyone could download the exact same video, but nobody can actually have it for ourselves. However, at the very least, a LeBron James highlight video is being offered for sale for over 230,000 dollars via NBA Top Shot, a platform that lets investors and fans to purchase or sell officially licensed sports highlights. To be honest there’s no difference between the bogus LeBron clip on Google as well as the $30,000 video that is available through Top Shot, with a few notable exceptions. Top Shot authenticates every clip and gives exclusive ownership to the exclusive assets by using blockchain technology.
Additionally, because of blockchain technology, any digital asset such as clothing, art, LeBron James photograph or experiences themselves can be verified as genuine, verifiably limited , and only affixed to. This is why these rare and exclusive assets, often referred to as NFTs are able to have the value of. Take the example of Pokemon cards. They have nothing intrinsically valuable. It’s only the rarity or authenticity of particular cards that push their value to a new height. The same fundamental principles of value are now being applied with digital asset for the first-time in recorded history.
In actual fact, as I write this, more than one-quarter of a trillion dollars changed hands thanks to the purchase and sale of NFTs. The majority of this is accounted for by the auction in digital artwork and collectibles.
For instance digital creator Mike Winkelmann, who works under the name Beeple was, up until recently, not had more than $100 in exchange for a piece of work. In the second quarter of 2020 however, Winkelmann sold the NFT piece of work that cost more than $66,000. Then, a few months later the same work was auctioned to $6.6 million. If that wasn’t enough, in the month of March 2021 the photographer was able to sell an online collage to Christie’s auction house to raise $69million. Why? Because, with a blockchain ledger, authenticity and rarity of rights to exclusive ownership can be communicated and confirmed.
These basic economic concepts are spilling over into other digital goods like items for collecting, clothing as well as virtual propertyin fact real estate. Platforms such as Upland make it possible to buy virtual real estate assets , like those of the New York Stock Exchange, for instance, which has recently went on sale for $23,000. Who would invest that kind of sum on a virtual replica of the NYSE? Anyone who thinks that as more investors invest and the best assets are scarce, the cost of these digital assets could increase. Simple demand and supply.
Retailing in the Metaverse
In the realm of retail, there are some who anticipate the development of shopping malls, shopping malls, stores and more in the metaverse. This is likely to be naive. Simply transferring industrial age ideas and shopping habits to the metaverse would be not imaginative and unproductive. The concept of the Metaverse allows us to escape the industrialized form and purpose of physical stores and go further than even the most enjoyable digital shopping experiences today.
What is the reason to create the illusion of the Canada Goose store when in the Metaverse I can purchase a brand New Canada Goose coat from inside an Arctic exploration adventure which is led by Iditarod champion and Canada Goose spokesperson Lance Mackey? In the event, I could gain firsthand and in-depth knowledge of the coat’s technical and performance, then order it, and then have it delivered to my home in the real world. I can purchase my new car from the Metaverse but rather than from an empty store of cars, but instead take an adrenaline-pumping drive at the racetrack that I prefer. I can seek advice on my appearance from a personal adviser who I can bring out of The Metaverse in my own living space. In a world where every experience can be created what is the reason us use our industrial-era model of the retail industry as a model that will be obsolete in the next decade? Marketers, store designers merchandisers and many more will need to start thinking differently about what”a “store” is.
In the future, most of us spend our time doing work, studying, socialising and enjoying ourselves in the metaverse. Some might choose to spend all of their time in the Metaverse while observing the world as dull, limiting and inefficient in the way it compares. With increasing hours spent within the metaverse the ratio of physical and virtual possessions we have will grow dramatically. Who wants to wear the same outfit to two separate virtual events on the same weekend?
As we continue to spend more time in the Metaverse, the status icons like the virtual house you have as well as the virtual clothes and jewellery you put on or the cosmetics that you purchase will be just as crucial as the actual items and purchases are today. Brands will capitalize on this need by offering an ever-growing array of virtual goods at real costs. In reality, the length of time one could spend on the Metaverse in comparison to reality, could be seen as an indicator of status.
It is not known for sure however what experts agree on is the fact that Metaverse even though it is it may be years or even decades away is a necessary step towards the convergence of mankind as well as technology, and a logical merging of virtuality and reality. Although the Metaverse could take decades to evolve but there will be more large investments being made now and in the years coming, from organizations developing the future.
Scuti for instance, is a company that is focused on “bringing to the market the first global retail market through games, and permitting brands to sell direct to players in games.” Obsess is another startup that creates CGI environment and experience for top beauty and fashion brands. Companies such as Ikea are already using Augmented Reality technology to enable customers to design their own spaces through the Studio application. The beauty giant L’Oreal has developed a whole range of cosmetics that are virtual. In addition, Gucci has started selling virtual clothes, launching the Gucci Virtual 25 shoes created by Gucci creative director Alessandro Michele, for $12.99 per pair.
Each of these items are, despite being limited by the technology and protocols that we are using today but is still a small move towards the Metaverse. It will grow slowly and gradually until, just like the internet, there is enough infrastructure that developers and users build an epoch.
Smart brands will definitely invest in real estate virtual properties and employ builders to build their brand’s presence and their experiences which will allow them to sell physical and digital products to customers who spend their time between different worlds. Companies and brands that aren’t up to date remain within the actual world, and even more so in the ghetto the old internet will end up becoming.