Effects of metaverse on the eCommerce industry

Commerce or Buy / Sale / Trade / Barter of Products & Services is as old as the evolution of Homo-Sapiens, with earliest known records going thousands of years back, and while commerce has evolved a lot over these years, the basic essence of trading the products & services remains the same.

What started as the bartering of products/services in earlier times, evolved into a full-fledged industry worth trillions of dollars, and the backbone of the global economy. Commerce can be broadly classified into Country-to-Country (like Oil & Gas) or Business-to-Business or Business to Consumer, but all these three classifications funnel down to Customers, as they are the end customers for most of the products & services, being sold via multiple channels.

Business to Consumer Commerce has been crowded & controlled your local kiryana stores which were mostly un-organized, but it started changing over the past couple of decades when we saw the emergence of Conglomerates coming to the organized retail/commerce segments, launching giant stores to cater to the needs of the consumers.

With the emergence of Web 2.0, this changed further, with startups like Amazon, Flipkart, Myntra replicating the B2C model digitally, selling the products to the Consumers directly via their Websites & Mobile Applications. The comfort of shopping from home at huge discounts, with low or rather free delivery charges, hooked the consumers, resulting in the exponential rise of eCommerce channels, with billions of dollars in annual sales. eCommerce has taken the world by storm, accounting for over USD 3 Trillion in sales globally, and this trend is just getting started and is here to stay.

While Web 2.0 was all about social connection & commerce via Internet, Web 3.0 is going to be about de-centralization & Metaverse Platforms. A lot of buzz is going around Web 3.0, and how eCommerce will cope up with the new decentralized world, especially with Metaverse Platforms. eCommerce has always been at the front end of the technology development & adoption during Web 2.0, and Web 3.0 is not going to be any different, as we have already seen eCommerce players fiddling around with the Metaverse platforms, building their own tech, integrating with Metaverse, to make the most out of this huge opportunity.

The basics of Metaverse platforms lies in providing highly immersive experiences to the audiences, connecting them socially & professionally via AR / VR technologies, and allowing users to live parallel lives on such digital platforms, where they manage their own Digital Avatars.

There’s a huge opportunity for eCommerce Platforms to leverage the Metaverse Platforms in more than one way,

• Digital Advertisements – eCommerce platforms are one of the top digital ad spenders globally, for both Top & Lower Funnel marketing, running Video Ads, Rich Media Formats & Standard Banners formats. These ad formats have existed for years now, and have started losing their attractiveness. However, the whole beauty of Metaverse lies in the Experiences a user can have on the platform. eCommerce brands will have a plethora of marketing opportunities on Metaverse in terms of highly engaging creative & experiential formats. For example, think about a Rock Show organized on Metaverse by a leading eCommerce player, this will help eCommerce Brands resonate with their users better.
•  Virtual Shops – On Metaverse, eCommerce Platforms can run highly immersive experiences like launching a virtual shop, where a user can browse through their complete portfolio of products, and take actions (in terms of buying) from them directly. Such experiences can be highly immersive and engaging for the users, which will result in not only Top Funnel awareness but also in lower funnel conversions for the eCommerce Brands.
•  Digital Products – With the Mass adoption of Metaverse Platforms, we will see more and more people spending quality time on such platforms, with their Avatar being the Centre figure, blurring the lines between Real & Digital Lives. Till now eCommerce platforms have been providing products & services digitally for the Real World, but think about the possibility of eCommerce companies selling digital products for your digital avatars, right on the Metaverse platforms. Recently a digital replica of a Gucci bag was sold on a leading Metaverse platform at a far higher pricing than the real-life bag, and this can be a huge opportunity, opening a new revenue stream for the eCommerce Platforms.
• Data Privacy – With the enactment of GDPR policies, more and more countries are framing their own Data Privacy laws to prevent the misuse of User Data. With Decentralization, it will become all the more important as one of the founding pillars of Web 3.0 is the strict data privacy laws, which act as both a boon & bane for the eCommerce Industry. This will limit the eCommerce players to run highly targeted advertisements to the users on Web 3.0 but will empower them to use the audience data of Metaverse Platforms, which the users are willing to share on such platforms.
• Cookie-Less Future – World is looking at the Cookie-Less future, which might happen over the next few months. With cookies cease to exist, it will become increasingly difficult for eCommerce brands to use Retargeting functionality to reach out to their loyal users. Metaverse being a Mobile-First Technology can help fill this gap for the brands.

  In a nutshell, Web 3.0 & Metaverse platforms, have the power to propel eCommerce adoption & scale to a new level, It can be a really big opportunity to engage with their loyal audiences, acquire new customers, and scale the numbers, but a lot of hard work, research & investment needs to be done by the eCommerce giants to leverage the most out of this wave.

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