The fashion retail industry has always been at the forefront of innovation, constantly seeking new ways to engage with consumers and enhance their shopping experience. In the past decade, the retail industry has embraced an omnichannel strategy, aiming to merge physical and digital retail. So, what’s new now?
With the emergence of the Metaverse – a virtual realm where people interact, work and socialize – the fashion industry is poised to undergo another transformative revolution.
So, What is the Metaverse?
Mark Zuckerberg, CEO Facebook & Satya Nadella, CEO Google both claim it is the future of the Internet.
According to an explainer in The Wired, broadly speaking, the technologies companies refer to when they talk about ‘the metaverse’ can include virtual reality—characterized by persistent virtual worlds that continue to exist even when you’re not playing—as well as augmented reality that combines aspects of the digital and physical worlds.
Many companies that have hopped on board the metaverse bandwagon also envision some sort of new digital economy, where users can create, buy, and sell goods, The Wired continues.
McKinsey gives a far easier explanation – ‘The metaverse is the emerging 3-D-enabled digital space that uses virtual reality, augmented reality, and other advanced internet and semiconductor technology to allow people to have lifelike personal and business experiences online’.
What we @IMAGESBoF think – The Metaverse is widely regarded as the upcoming transformative force in technology. It can be defined as a digitally generated virtual realm where multiple individuals can engage simultaneously through specialized virtual reality (VR) devices.
Metaverse in Retail & Apparel
The ever-evolving digital landscape has opened up opportunities for businesses of all kinds to stay globally relevant and fashion is certainly no exception. In the past couple of years, the fashion industry has faced challenges in consumption due to store pandemic-induced closures and remote work arrangements. As a response, fashion businesses shifted their focus to online channels in order to sustain their operations and secure orders.
The Metaverse is closely associated with cutting-edge technologies like augmented reality (AR), virtual reality (VR), artificial intelligence (AI), and the Internet of Things (IoT). These technologies helped the world through the pandemic and they are now taking sectors (specifically retail) forward into the Meta Era, one strategic shift at a time.
Recently, the world witnessed the inaugural Metaverse Fashion Week, hosted in Decentraland, a highly popular 3D virtual world.
- Renowned brands like Gucci, Roberto Cavalli, and Ralph Lauren are capitalizing on this trend, collaborating with digital fashion designers to create exclusive collections for the Metaverse.
- Indian Retailers like Tanishq, Mahindra & Mahindra, Van Heusen and Masaba Gupta with ABFRL have ventured into the Metaverse space, paving the digital path to the future.
The Metaverse is redefining the traditional shopping experience, bringing together the convenience of online shopping with the sensory and social aspects of in-store retail. Virtual reality showrooms and stores provide immersive environments where shoppers can explore, interact with products, and even try on virtual garments.
Why Shift to Metaverse?
The retail sector is grappling with the significant challenge of inflation, as costs continue to rise across the entire retail value chain. In response to this inflationary pressure, some retailers are turning to the metaverse as a means to connect with consumers. While the technology has yet to achieve mainstream adoption, there are already users who are actively investing their time and money in this virtual realm.
One notable example is Nikeland, the metaverse store launched by NIKE, which garnered an astonishing 21 million visitors during its three-week debut. As physical stores remain relevant, the metaverse and digital marketplaces present additional profit potential for retailers. However, it is essential to acknowledge that inflation remains the primary hurdle for the retail sector, limiting retailers’ investments in the metaverse.
The Metaverse presents fashion brands with unique technological opportunities and benefits, allowing them to gain a competitive edge. As brands increasingly embrace digitization, the demand for digital fashion will rise, making products in the digital environment truly distinctive. Alongside brands selling physical clothing, companies offering clothing exclusively for the digital world will introduce fashion to a new dimension.
Digital clothing, existing exclusively in the virtual realm, has been proven to be significantly more environmentally friendly compared to physical garments – digital clothing emits approximately 97% less CO2 and consumes approximately 3,300 liters less water per item when compared to its physical counterpart.
- According to GlobalData, the market share of Metaverse in fashion is expected to witness an increase of $6.61 billion from 2020 to 2025, thereby registering a CAGR of 31.9%
- The growth of market is primarily driven by the increasing number of big brands entering in the game
- The growth is further supported by the increasing number of GenZs that spend more than 8 hours per day on their smartphones
- The significant metaverse investment by the fashion industry is subjected to the $176 billion in the digital gaming world
At the launch of Pariz Metaverse, Lokesh Rao, CEO of Trace Network Labs, expressed a significant insight, stating that, “The industry has realized that the virtual world, despite being based on imaginary creations, actually has profound utility when it comes to garments. The evolution of design technologies allows creative freedom for all designers, but some clothes they design can never be worn in the real world. The Metaverse removes this hurdle — a digital avatar can wear any garment without any constraints of type, design, fabric and use.”
During the launch of Pariz Metaverse, it was not only introduced a new metaverse platform but also marked the debut of three retail stores from renowned brands like Madame, Zivame, StyleUp, and Da Milano. These stores are set to offer a unique “buy in Metaverse, deliver at home” service. In due time, visitors to these brand stores on PARIZ will be assisted by AI-driven or human-avatar store assistants throughout the selection process, facilitating a discovery-to-delivery cycle similar to traditional ecommerce websites in the Web2 era.
Users will have the freedom to navigate the virtual store, physically walk around, try on products, click on items of interest, and zoom in and out to examine each product in detail. Additionally, Pariz provides a wide range of shopping experiences and events tailored to the brands available on the platform, enriching the overall consumer journey.
Emerging Opportunities & Challenges for Retail in India’s Metaverse
In India, the Metaverse holds immense potential within the country’s burgeoning e-commerce industry. The Indian e-commerce market is estimated to be valued at $99 billion, experiencing significant year-on-year growth. Investors from Asia and other international markets have displayed a growing interest in India’s e-commerce sector.
Moreover, the Metaverse can serve as an effective avenue for retailers to enter new markets and connect with a wider customer base. Many retailers in India face hurdles when it comes to expanding their reach beyond local areas. However, the Metaverse offers an opportunity for these retailers to engage with customers from across the globe, enabling them to expand their customer base without the need for costly physical stores or extensive marketing campaigns.
Nevertheless, venturing into the Indian market poses specific challenges. Indian consumers are often price-sensitive, requiring retailers to adapt their pricing models to align with the local market. Additionally, establishing a presence in India can be accompanied by distribution and logistical complexities.
While the Metaverse presents numerous opportunities for Indian retailers, there are also notable obstacles to overcome. One major challenge is the limited infrastructure and technological resources necessary to support the Metaverse. Many retailers in India may lack the means to invest in the required technology and infrastructure for creating virtual stores or delivering high-quality immersive experiences.
Another challenge lies in retailers’ ability to effectively utilize the Metaverse. This entails significant investments in research and development, as well as training and education for employees, to ensure a thorough understanding and successful implementation of Metaverse strategies.
Redefined Future of Fashion
Research indicates that the global metaverse industry is projected to reach a value of $800 billion by 2024. Among the countries where metaverse and meta fashion are expected to gain rapid popularity, India stands out. The country’s widespread adoption of smartphones, internet connectivity, and a youthful population create an environment conducive to embracing meta fashion.
Young urban Indians, known for their technological aptitude, are actively seeking avenues to engage with others, express themselves on digital platforms, collaborate with artists, and foster innovative ideas. With meta fashion, they have a perfect opportunity to explore these possibilities.
The Metaverse presents retailers with an unparalleled opportunity to curate customized shopping experiences by leveraging data that is specifically tailored to individual customers’ preferences. Due to the digital nature of the Metaverse, customers can access data-driven services that inform their purchasing decisions and enable them to make more informed choices.