Newsletters

#3 - Retail and Commerce in the Metaverse

April 13, 2022

This week, I asked many of you:

  1. How do you define the Web2 customer journey?
  2. How is it limited?
  3. How does Web3 change this if at all?

While I don't hold the answers to all three questions, I think it's only fair if I take a swing at coming up with a possible framework.

IRL to Web2

Maybe controversial, but I'd argue that when we moved from physical retail to online retail, not too much changed... while DTC certainly led to business model innovations, a lot has also been lost in the process of digitizing our shopping experience.

In a store, you're funneled through a "sales pipeline" where you browsediscovertouch/try → buy.

There are features to help conversion at each stage, like a sales associate, fitting rooms, sample products, IKEA even has a food court for you to think on bigger decisions, etc. We don't see these "perks" as transactional, even if you're conscious of every feature's design. These are things that we're used to in our "relationship" with brands.

When online, we're still funneled through the same "sales pipeline," but the entire experience somehow seems "lesser" (with some exceptions, of course). But just to list some of my complaints:

  • Conversion tools feel impersonal (abandoned cart recovery, retargeting, upselling, etc.).
  • You can't "shop" online the same way IRL shopping can be a day-long adventure with friends.
  • "Optimized" e-commerce sites have less room for brand-storytelling.
  • Can't sample/touch products (although most brands have found a workaround by shipping free samples before or after orders)
  • Shipping takes too long.

While there are breakthroughs in the space that substantially increase KPIs and help gather more actionable customer data, I'd still argue that most new innovations we see aim to replicate the physical experience as much as possible.

But what if we approached the online customer experience in a completely different manner altogether?

Web2 to Web3

I'm a film student, so often turn to film history for analogs. I'm thinking about how one of the biggest "breakthroughs" in the quality of films was when the industry stopped seeing "realism" as an obligation to faithfully capture reality, but a tool for immersive storytelling, and an opportunity to become more than what our physical sensory experiences are capable of.

Turning to Web3, I wonder if we can take a similar approach to reimagining the retail experience - if not for the Millennials, then maybe for Gen Zs, or Gen Alphas. What tools do we have readily available that we can adapt to reshape a metaverse retail experience so that we're not limited by the IRL component, but instead inspired by it?

My answer is brand and community - I'd love to brainstorm new ways to convey a brand's personality through a guided digital experience, and to offer a community new ways to connect with brands and with each other.  

Definitely not a complete list, but some ideas for thought:

  • Don't make something more complicated. If conversion rates are already a challenge for brands on optimized Shopify websites, it probably doesn't make sense to ask your consumers to log into a metaverse to access a checkout flow instead. There has to be something fundamentally innovative about your metaverse experience.
  • Leverage experiences to identify + convert your evangelists. Only top fans will go out of their way to engage with brands. Give them a POAP, reward them with discounts, add them to a group chat, follow them on a finsta... whatever you do, keep them close! Have a two-way dialog open.
  • Gamification is possible. Play-to-win discounts or free items?
  • Give virtual assets value with IRL perks. Imagine an Hermes loyalty system, but instead of a "secret list," your top supporters hold an NFT instead, and can access a special tier of products in your retail locations.

Explore With Me?!

I've made my first move into the metaverse with a plot of land in NFTWorlds (tokenized Minecraft land) and exploring possibilities with Sandbox or Decentraland too. I'm looking to work with as many brands and creatives as possible to pioneer a playbook for an awesome metaverse retail experience.

If you'd like to join me, or know someone who does, reply here or text!

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