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Sunday, July 17, 2022

The metaverse angles to be new retail channel

Could the metaverse be the next frontier for retail payments? It's beginning to look that way. According to a new report, about one in five Americans has already made at least one purchase in the metaverse, and another 20 percent are planning to do so. Not surprisingly, younger Americans are more inclined to want to shop the metaverse, but their elders are not far behind.

The report comes from CouponFollow, a 12-year-old consumer savings engine that helps online shoppers find coupons to apply to their purchases. Recently, the company surveyed 1,066 Americans about their sentiments about shopping in the metaverse. Those identified as Gen Z (born between 1996 and 2015) are most enamored by the idea: 71 percent either have or are planning to shop in the metaverse.

Among baby boomers (born between 1946 to 1964) it's 40 percent; 59 percent of Gen X consumers (born between 1965 and 1976) and 63 percent of millennials (born between 1977 and 1995) have shopped or are planning to shop in the metaverse.

Shopping in the metaverse can be complicated. There are technology requirements, like virtual reality headsets. Travelers in the metaverse also need to learn how to create avatars and navigate the virtual world. CouponFollow said nearly half of consumers surveyed reported not understanding how the process works.

Several national brands use the metaverse as a marketing channel. Nike, for example, launched NIKELAND in 2021, an interactive world where participants get to play games that get them moving in real time, and, of course, customize their avatars in Nike gear. Chipotle Mexican Grill ran a game earlier this year, where customers try their hand at burrito-building in the virtual world to earn coupons for free burritos to use for online or mobile orders.

Others brands, like Gucci and Ferrari, offer visitors opportunities to earn or purchase NFTs. An NFT (non-fungible token) is a blockchain-based token representing a unique asset (such as a piece of art or digital content); it can be likened to a digital certificate of ownership and authenticity of the asset.

The consultancy McKinsey & Co. estimated 79 percent of consumers who are active in the metaverse have made at least one purchase there.

Amazon leads pack

CouponFollow identified about a dozen brands that Americans are most eager to shop with virtually, and the results suggest Amazon's stronghold on the retail market is transitioning to the metaverse. Nearly one in three (28 percent) said they were interested in making purchases from Amazon in the metaverse.

Samsung and Disney followed, with 24 percent of consumers surveyed wanting to make purchases in each brand's metaverse. While Samsung already offers a metaverse experience with quests and NFT-collecting, Disney has yet to open for business there.

It's also apparent from CouponFollow's survey that Americans are spending some serious money in the metaverse. Nearly one in five have spent more than $1,000, and 11 percent have spent upward of $2,000, the company said.

Clothes are the most common purchases consumers have made or plan to make in the metaverse, followed by games, technology and concert tickets.

"Fashion in the metaverse is flourishing," said Marc Mezzacca, CouponFollow's CEO. "Brands from Gucci to Balenciaga and Burberry are embracing the experience with digital runway shows and clothing for avatars."

Most of the spending thus far has been with credit and debit cards, although bitcoin is also common, Mezzacca wrote in an analysis of survey results.

Perhaps the biggest hurdle to more metaverse shopping is concerns around security and data privacy. Better than half of respondents in CouponFollow's survey (52 percent) said they were concerned about scammers in the metaverse; 39 percent said they were concerned about identity theft, and 38 percent had privacy concerns. end of article

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