Retailers will be active in “Web 3.0” technologies such as metaverse, NFTs, and cryptocurrency in 2022.
In a recent Chain Store Age interview, Samir Desai, chief digital and technology officer of Abercrombie & Fitch, said, “The Web 3.0 space is really nascent, but gaining momentum.”
Web 3.0 is gathering enough impetus to likely serve as the dominant retail technology theme for the coming year. Following are brief overviews of the current state of metaverse, NFTs, and cryptocurrency, and how they may develop throughout 2022.
By now, everyone has heard that Facebook changed its corporate identity to Meta. The company plans to create a sophisticated digital world called the “Metaverse.” Consumers will use augmented and virtual reality technology to digitally engage with each other and their surroundings, with crossovers into the physical world.
Currently, the metaverse exists on a smaller scale, most prominently through immersive digital gaming platforms. Numerous retailers are introducing metaverse experiences in the popular Roblox virtual environment, exemplified by the recently launched Nikeland space from Nike.
Virtual buildings and fields inside Nikeland are based on the company’s real-life headquarters. Among other features, a digital showroom enables customers to outfit their Nikeland avatar with special Nike virtual products, and customers can earn in-game rewards for participating in virtual games and activities.
Digital shopping also features prominently in Ralph Lauren’s partnership with the Zepeto global social networking and avatar simulation app, which provides customers with a personalized virtual world.
The metaverse can also integrate with the “real” physical world, as evidenced by a promotion during the 2021 New York Fashion Week event where Crocs partnered with flex payment platform Afterpay to reveal an exclusive collection of Jibbitz charms at a Times Square digital “Dropshop” AR-based shopping experience. Customers could also use Snapchat to virtually try the charms on a pair of Crocs, via a new Afterpay Snapchat Lens.
The metaverse provides retailers with the opportunity to monetize new storefronts and product assortments that require little or no physical overhead. Especially as technologies that enable consumer interaction with the metaverse, such as AR and VR headsets, are becoming more sophisticated and popular, 2022 should see a steady increase in retail metaverse activity.
Retailers began discovering tangible value in the digital realm with non-fungible tokens (NFTs) in 2021. NFTs are unique digital assets stored on a blockchain ledger which certifies the owner. There is no way for an NFT to have more than one owner, and only the certified owner can sell it.
Highlights of retail NFT activity during 2021 included Domino’s resurrecting its former “Noid” advertising campaign in a series of NFTs, and eBay and Shopify both started allowing their purchase and sale.
As with the metaverse, NFTs offer retailers the chance to sell products without physical overhead. Once the potential cost of designing and developing digital products has been expended, these companies avoid costs such as warehousing and distribution, as well as any potential reverse logistics expenditures.
E-commerce marketplaces like eBay and Shopify even get to avoid any design and development costs, and simply allow NFT buyers and sellers to conduct digital transactions on their platforms. While there is always the possibility of NFTs turning into a speculative “bubble” (as has happened with many other collectible commodities), 2022 should feature many more digital retailers and marketplaces joining the trend.
In 2013, I wrote a column with the headline, Does Retail Need Bitcoin? Bitcoin is a nearly-anonymous, decentralized, peer-to-peer online currency (popularly known as “cryptocurrency”) which is based on blockchain technology. Blockchain serves as a real-time, single ledger verifying all transactions conducted on the blockchain network.
In the eight years since that column was published, bitcoin and other forms of cryptocurrency have slowly grown as an accepted form of retail payment by retailers including Newegg, Camping World, and Sheetz. Walmart and Amazon have both signaled interest in cryptocurrency with job listings.
Where Walmart and Amazon go, the industry follows. While neither company currently accepts cryptocurrency payments, their hiring plans suggest they will, possibly as soon as this year. Amazon could even be in the position to launch its own cryptocurrency denomination or exchange. Retail may not yet need cryptocurrency, but in 2022 a lot more retailers will surely begin accepting it.