Facebook has brought the idea of the metaverse into the mainstream. The company will rebrand as Meta and its stock ticker will change to MVRS on December 1.
Facebook is even considering opening physical stores to showcase the capabilities of its metaverse technology. But the metaverse expands far beyond the limits of Mark Zuckerberg’s social media empire.
So what is the metaverse? Which companies are planning to enter it? And should retailers start working on their metaverse plans today?
What is the metaverse?
The metaverse is a virtual world in which people can interact, communicate, and play together.
The science fiction author Neal Stephenson coined the term in his novel Snow Crash in 1992. Technology companies have started using this name recently to denote an immersive virtual reality in which we no longer distinguish between the digital and the physical.
Actions we take in the physical world will affect our virtual selves and vice versa.
The following technologies currently sit under the metaverse umbrella:
Augmented Reality (AR)
Virtual Reality (VR)
Digital twins
Cryptocurrency
Non-Fungible Tokens (NFTs)
Smart glasses
It is fair to say that the metaverse, as imagined by tech companies, does not yet exist. There is still a boundary separating our real-world selves and our digital selves, even if that boundary is sometimes difficult to pinpoint.
“Creation, avatars, and digital objects are going to be central to how we express ourselves, and this is going to lead to entirely new experiences and economic opportunities.” – Mark Zuckerberg, July 2021
What is Nike’s plan for the metaverse?
The idea of the metaverse can be vague. It is helpful to use a specific company to explain how this technology will work.
Nike has filed seven patents for:
“Downloadable virtual goods, namely, computer programs featuring footwear, clothing, headwear, eyewear, bags, sport bags, backpacks, sports equipment, art, toys and accessories for use online and in online virtual worlds”
On the face of it, this does not seem revolutionary. In-game purchases are big business already, for instance. Gucci sells virtual sneakers on Roblox for $8.99 and many other luxury retailers have launched similar initiatives.
Yet Nike is betting on us living more of our lives digitally, as “ourselves”. Instead of creating a character in a videogame, we will “exist” in the virtual world and will want to put our best foot forward.
Nike even has an open role at the moment for a “virtual material designer” with a focus on “leading the company into the metaverse”.
At first, the new world will look a lot like the old world. Retailers will simply sell digital versions of their existing products. But as with all other technologies, they will then discover new business models and new ways of connecting with consumers.
What can we learn from Nike’s patent applications?
Nike’s patent applications reveal the company’s best estimation of what that second phase of the metaverse will look like.
Nike has filed a patent for “intelligent electronic shoes” and “CryptoKicks”, as reported by Business Insider. CryptoKicks are connected to physical sneakers and they can transform into new products in the metaverse. Crucially, consumers will have the power to create their own versions of the product. This is another significant transition in the metaverse; users are creators rather than pure consumers.
Although this remains an incomplete idea (as most patents are), it does point to one truth about the upcoming digital world. Where scarcity dictates the economy of the physical world, no such constraints exist in the metaverse. Consumers may purchase a lot more items to mix up their look and may even prefer to do so, as environmental concerns increase back on planet Earth.
Nike envisages that users will store these items in a digital locker:
Similarly, Nike expects that consumers will be able to purchase metaverse items while attending live events:
The “intelligent electronic shoes” Nike aims to sell will track user activity, turning these steps into metaverse rewards. Once more, the two worlds impact each other in what will become a symbiotic relationship.
This is all speculation for the moment and patents are not necessarily future products. However, we can read into this that Nike has serious plans to enter the metaverse.
Should other retailers follow in Nike’s footsteps?
The ultimate vision of a truly immersive virtual world is years away and if it does arrive, it will not resemble what we predict today.
Nonetheless, retailers do not need to buy the metaverse hype to see that consumers’ lives are increasingly lived online. Consumers are creating, sharing, and buying online. In the process, they attribute more value to the virtual world.
People also demand more visual ecommerce experiences. The text-driven world of Google search has given way to advanced multimodal search.
With this in mind, it is important that retailers remember that the metaverse is not a detached reality. It is an extension of our existing world. Those that have been left behind in the current ecommerce age will only struggle further in this new technological era.
The idea of the metaverse is that it is limited only by our imagination.
Retailers should embrace the opportunity to experiment. Even if, for the moment, the greatest impact of these endeavours is felt in their existing business.
