<p><span style="color:#ffffff;">Retail in the Metaverse revolution!</span></p>
<p><b>Retail & Consumer Focus</b></p>
The Metaverse has successfully attracted many retailers to date and the concept of omnichannel experience has become even more relevant: An omnichannel experience refers to a seamless and integrated approach to providing customers with a consistent and cohesive experience across multiple channels, both online and offline.
In the Metaverse, retailers can create a seamless shopping experience by integrating their virtual and physical stores, allowing customers to seamlessly move between both worlds.
This integrated approach provides customers with a more flexible and convenient shopping experience, while also allowing retailers to leverage the benefits of both the virtual and physical worlds to enhance customer engagement and loyalty.
i. The “omniverse”: an immersive, interactive and multisensory experience
One of the biggest challenges facing retailers today is the need to integrate physical and virtual realities seamlessly inorder to structure experiences that are both interactive and fully engaging. Indeed, the utilization and advancement of metaverse technologies permit the creation of an omniverse approach that provides immersive and multisensory experiences.
Some of these blockchain technologies include augmented and virtual reality (AR/VR) which revolutionizes the retail industry by transforming customer interactions and creating new opportunities for customer engagement; as well as Artificial Intelligence (AI), a crucial component of the metaverse, and it is expected to further enhance the metaverse experience by enabling customers to interact with holographic displays and virtual objects in new, exciting ways. In fact, through the integration of AI, customers will be able to touch and feel virtual objects, making the experience even more realistic and sophisticated.
Moreover, the integration of the Internet of Things (IoT) technology in the metaverse is set to revolutionize the way retailers engage with customers and sell products. The integration of real-world devices and sensors allows for seamless integration of these devices with the virtual world, providing new opportunities for customer engagement and sales. Retailers can use IoT to enhance the customer experience by offering personalized and contextually relevant offers, recommendations, and promotions. This development is set to transform the retail industry in the near future.
ii. Business opportunities and trends in the Metaverse
The Metaverse provides an entirely new digital ecosystem that recreates the customers’ experience and goes beyond just purchasing clothing. Indeed, Customers can now virtually test drive a car, try out new exercise equipment, purchase property, choose beauty products, and even receive healthcare services.
The value of the Metaverse is beginning to emerge, and researchers at the Capgemini Research Institute have projected the market size to be between US$500 million and US$1 trillion by 2030 (with consumer interest in immersive experiences available through mobiles, web browsers, voice assistants, sensors, and extended reality (ER) headsets being noted in studies). In fact, “half of the consumers surveyed felt that immersive experiences could be both impactful and valuable in their buying journeys.”
In this section, our focus will center on the numerous commercial opportunities and prevailing trends comprised within the Metaverse.
A. The Rise of Virtual influencers
In recent years, the use of digital avatars has given rise to a new phenomenon in the Metaverse: virtual influencers.
Digital avatars, computer-generated characters, have become the new faces of advertising, representing brands, and promoting products to their followers. Unlike human influencers, digital avatars are not bound by physical limitations and can exist in multiple places at once, allowing them to interact with a much wider audience.
With their growing popularity, virtual influencers are quickly becoming a major player in the advertising industry and a key component of the Metaverse experience.
B. The growth of virtual and augmented reality gaming
The gaming industry is already a significant component of the Metaverse, and its growth is expected to increase exponentially in the coming years.
With the emergence of virtual reality gaming, players can now experience a more immersive and interactive gaming experience. The incorporation of advanced technologies such as artificial intelligence and the Internet of Things (IOT) will further enhance the gaming experience in the Metaverse.
In addition to traditional gaming, we can also expect to see the rise of e-sports competitions and the development of new game formats that will take full advantage of the capabilities offered by the metaverse.
The gaming industry is therefore poised to play a major role in shaping the future of the Metaverse.
C. Virtual events and
the Retail Industry
Virtual events are becoming increasingly important for the retail industry: Indeed, the metaverse is playing a key role in enabling immersive experiences without the constraints of physical location or mobility.
With the ability to create 3D environments, businesses can easily host conferences, trade shows, product launches, and other events that are not limited by the capacity of a physical space. This allows for a more extensive reach, increased engagement, and enhanced brand awareness.
Additionally, virtual events in the Metaverse provide the opportunity for consumers to have a more personalized and interactive experience, which can lead to stronger customer relationships and increased loyalty.
As the Metaverse continues to grow, virtual events will become an essential component of the retail industry's strategy.
D. Virtual Education:
The popularity of online courses is on the rise, and augmented reality (AR) devices are providing a new realm of educational experiences. AR technology allows for interactive and immersive learning, which can greatly enhance the educational experience for students. With the rise of the metaverse, we can expect to see even more innovative and engaging educational content delivered through AR devices, providing a new dimension to the future of learning
In February, Meta platforms, the parent company of Facebook, announced the launch of the MENA (Middle East and North Africa) region's first metaverse academy in Saudi Arabia. The objectives of the academy are to invite individuals to participate in a workshop to serve as an introduction to the metaverse, providing an online training in order for people to familiarize themselves with the augmented reality effects and providing professional training program allowing jobseekers to apply for entry-level roles in immersive technologies.
On another note, Egypt has recently unveiled its first Metaverse city, designed for both tourism and educational purposes. The project owners have stated that the city will be utilized in universities and schools, offering an innovative approach to teaching curricula through a virtual world. The use of the Metaverse for educational purposes has become increasingly popular in recent years, as it offers a unique and immersive way of learning that can engage students and enhance their understanding of complex concepts. With its launch, the first Egyptian city in the Metaverse is expected to pave the way for further adoption of Metaverse technology in the region's education sector, offering students a truly transformative and interactive learning experience.
E. Airlines in the Metaverse:
Airlines can benefit from the Metaverse by providing customers with a unique and interactive experience: Qatar Airways has set an example by introducing QVerse, a virtual reality experience accessible through its website.
QVerse allows visitors to explore the premium check-in area at Hamad International Airport and the cabin interiors of the airline's aircraft, including the Qsuite Business Class and the Economy Class, on their Personal Electronic Devices. Additionally, Qatar Airways has become the first airline to introduce a digital MetaHuman cabin crew, which enhances the interactive customer experience.
By leveraging the Metaverse, airlines can provide customers with a more immersive and engaging experience that could lead to increased loyalty and customer satisfaction.
F. A Unique shopping experience:
The Metaverse has opened up new and unique shopping experiences for customers: Indeed, many leading brands have purchased virtual real estate in the Metaverse.
Thanks to digital avatars, customers now have the possibility of trying on clothes and making purchases from the comfort of their homes.
Additionally, the rise of virtual shopping has also led to collaborations between luxury brands like Selfridges, Foundation Vasarely, and Paco Rabanne to launch a virtual shop in Decentraland, featuring art exhibitions and an NFT collection.
Finally, Majid Al Futtaim recently launched the first mall in the Metaverse, which includes virtual outlets for Carrefour, Ghawali, Samsung, and VOX cinema.
G. Branding through digital avatars
The rise of digital avatars in the metaverse has opened up new opportunities for branding and customer loyalty: Indeed, brands are now offering virtual accessories to personalize and enhance avatars, with some luxury brands like Gucci and Hermès venturing into the metaverse space. Gucci, for instance, sold a virtual handbag in Roblox for $4,500, which was more expensive than its physical version.
However, this new branding trend in the metaverse has also brought up the issue of brand protection. One example that comes to mind is the Maison Hermès who embroiled in a legal battle with an artist over NFTs depicting Birkin bags. This high-profile legal battle sparked a debate on how commercial activities can be depicted in digital art and the extent to which brands can be safeguarded in the metaverse.
The rise of the Metaverse has led to a new era in the fashion industry, offering unique opportunities for fashion brands to explore.
Many brands, such as Nike, H&M, Adidas, Tommy Hilfiger, and Zara, are already taking advantage of this trend: While Nike made the visionary moves of acquiring RTFKT in order to create NFT sneakers and other digital collectibles as well as creating its own platform on Roblox called Nikeland; Adidas sold over $22 million worth of NFTs for its “Into the Metaverse” project then collaborated with Prada in order to create the “Adidas for Prada Re-Source” initiative where users can register and submit images that are turned into NFTs. Other brands such as Tommy Hilfiger or Zara made the decision to launch Metaverse projects with the aim to offer consumers a digital retail platform to shop for NFTs for their avatars or purchase physical items.
With the Metaverse's ability to merge physical and virtual worlds, the fashion industry can now create an entirely new shopping experience for consumers.
The Food and Beverages Industry Finally, the emergence of the metaverse is significantly influencing the food and beverages industry.
Restaurant chains are now working on adopting new strategies to engage with customers: One example that comes to mind is the fast food chain Burger King, that launched “Keep It Real Meals”.
These special meals feature QR codes found on meal boxes packaging that unlock upon scanning digital collectibles and bonus NFTs. On another hand, Yum! Brands - which owns KFC, Pizza Hut, and Taco Bell - filed trademark applications for NFTs and metaverse products and services. KFC's applications include virtual foods and drinks, NFTs and NFT-backed multimedia, online stores featuring virtual goods, as well as virtual restaurants with "actual and virtual goods." Coca-Cola also entered the digital asset market by offering four NFTs in a single "loot box" auctioned by Utah-based startup Tafi.
These initiative taken by the food service industry demonstrate the potential of the metaverse to provide new and innovative opportunities for companies within that sector to better engage with their customers.
iii. The Metaverse used for optimization of projects:
As of late, the use of the Metaverse technology for optimization of projects has gained significant traction, with various sectors leveraging its benefits.
The Kingdom of Saudi Arabia, for instance, is utilizing Metaverse technology with the aim to test the developments of its largest projects: NEOM City as well as The Red Sea project.
Crown Prince Mohammed bin Salman mandated that all developments must be recreated in the digital world first before the start of production in an effort to optimize planning and reduce cost of errors.
Metaverse technology is also currently being employed in hospitals for surgeries, resulting in reduction of errors as well as increased efficiency.
With an increasing number of industries and sectors embracing Metaverse technology, its potential for optimizing processes and reducing costs is becoming increasingly apparent.
A. Regulatory concerns and challenges Regulatory issues:
As the Metaverse continues to grow and gain popularity, its regulatory issues are become increasingly significant.
This section will explore the regulatory challenges of the Metaverse and the potential solutions to ensure a secure and safe experience for all participants.
1. Non-fungible tokens ("NFTs")
The use of non-fungible tokens (NFTs) as digital assets, and the need for legislation to govern these assets, is a particular area of concern.
This shall imply the ability to transfer or claim ownership over an asset using blockchain. Thus, there is a need for legislation and regulations to govern these NFTs.
2. Data protection
Data protection is also a critical issue, as the technology, interactions, experiences, and interconnectivity of the metaverse could mean the collection of personal data on a scale we have never seen before.
Consumers typically participate in the metaverse by using one or more avatars or virtual life identities. That doesn't mean users are anonymous.
While an avatar may likely be in a different form to its creator, the data collected in relation to and generated by it remains linked to the individual behind it and constitutes personal data. Such data may comprise information collected via familiar registration and payments to service interactions and systems data generated through log ins. However, what concerns many commentators, is the collection of new, even richer combined datasets in the metaverse including anything from gait, gaze, posture, emotion and haptic data involving sensations as well as interactions with other individuals, content and objects in real time. There is a potential that some such data may even constitute special category or sensitive data demanding higher protection under data protection laws.
The decentralized nature of the Metaverse presents challenges for data privacy and protection, and there is a need for clear regulations and guidelines to address these concerns. The responsibility for protecting personal data in the metaverse will likely fall on platform operators, developers, as well as regulators, who must work together to ensure that users' data is kept secure, and their privacy is protected.
However, since the Metaverse has a global reach and offers its features to users irrespective of where they are located, in many cases, multiple privacy regimes will apply to the same data and even the same individual. For example, the EU General Data Protection Regulation allows for any business located anywhere in the world to fall under its terms if a business offers goods or services in the European Union or monitors the behavior of EU citizens, even though it has no physical presence in Europe (Article 3 Sec. 2 GDPR).
3. Cyber Security
With the ever growing and vast amount of data collected and stored in the Metaverse, the potential for cyber-attacks rises as well.
Payment systems integrated within the Metaverse present the most significant target for cybercriminals. In order to address these security risks, new regulations and legislation are required to be put in place.
It is therefore the duty of Metaverse developers and operators to implement robust security measures to safeguard against cyber threats as well as ensure the safety and privacy of users' data. Failure to do so could result in severe consequences for both individuals and businesses operating in the Metaverse.
For the Metaverse to thrive, it will likely need to adopt a zero-trust model rooted in the concept of ‘never trust, always verify’. A zero-trust model requires strict identity checks. It also uses ongoing authentication and verification to ensure bad actors are kept out or severely limited. With the colossal amounts of data set to be hosted in the metaverse, zero trust appears the most effective way to reduce or erase the theft of sensitive information.
4. Intellectual property (IP)
As of now, most filings were in relation to the classes of goods and services (from the Nice Classification).
Class 9: Downloadable digital media namely, digital assets, digital collectibles, digital tokens and non-fungible tokens (NFTs);
Class 35: Provision of an online marketplace and registry for buyers and sellers of digital assets, digital collectibles, digital tokens and non-fungible tokens (NFTs); which is a pure retail class.
To use your trademarks in the Metaverse, brand owners should cover class 41 (Entertainment and amusement, namely, provision of online non-downloadable virtual goods for use in virtual environments).
Class 42 will cover Digital assets and digital collectibles sold as non-fungible tokens (NFTs); and for anything around crypto and wallets should be registered under financial services, including digital tokens (class 36).
Originators and other rights holders are also heavily advised to safeguard their metaverse assets and software by properly marking copyrighted works and protecting them.
In addition, legislations should be amended in order to better filing patents for inventions related to the virtual and augmented reality spaces.
Indeed, ensuring that agreements with other parties protect against unauthorized distribution of the works is equally important for rights holders in the metaverse.
The issue of jurisdiction is also one that comes up frequently when talking about the metaverse. Indeed, is critical to determine which country's laws and regulations will apply to the metaverse and who will be responsible for enforcing them.
With a virtual environment that transcends physical borders and encompasses a global community, it is crucial to establish clear guidelines that ensure the protection of users and prevent any misuse of the platform.
The complexity of this challenge is further complicated by the need for international cooperation and consensus on the rules that will govern the metaverse.
1. To engage customers:
As retailers continue to explore the potential of the metaverse, engaging customers in this new virtual space becomes increasingly important.
In order to remain competitive, retailers must address key challenges in their relationship with customers, including engaging them, providing exceptional service, and building retention and loyalty. By creating unique and immersive experiences in the Metaverse, retailers can foster deeper connections with customers and enhance their overall shopping experience.
Thanks to the ability to offer personalized and interactive experiences, retailers have the opportunity to establish lasting relationships with customers and drive long-term loyalty.
2. Imperfect technologies:
Despite the continuous advancements in technologies used in the Metaverse, the level of immersion and interaction still has limitations. Imperfect technologies can hinder the experience of users and affect the overall quality of the metaverse. Some examples are that users may not feel fully immersed in the virtual environment or may experience lag, glitches, or other technical issues that disrupt their experience.
Those limitations therefore impact the user’s ability to create truly realistic experiences, which is one of the metaverse’s biggest selling points. Continued technological innovation and improvement are therefore essential to enhance the quality of the metaverse and provide a more seamless and immersive experience for users.
3. Content creation:
Finally, with the growing demand for high-quality content creation and experiences that can attract and retain users, many investors are eager to invest in content creation, recognizing its potential to build customer loyalty and generate revenue. This has led to a proliferation of metaverse content creators who specialize in designing immersive experiences that leverage the unique capabilities of virtual reality and other emerging technologies.
With this in mind, regulators are taking an interest in the growth of the metaverse as well. They are therefore extremely likely to encourage investments as a way to support the development of this new and rapidly evolving digital landscape.
The opportunities examined in this article are collected from all over the world. We believe that the region is well positioned with a strong technology tools and appetite for innovation.
Two factors will decide on how our region will be at the front of the revolution: the engagement of customers and the legal framework.
Our lives are inevitably and irreversibly connected to the virtual, and the metaverse seems to be a logical step in the evolution of technology. It is likely that the metaverse will become an important part of our daily lives, offering new channels for retailers to engage customers, but this world is still in the primitive stages of development and there are many challenges that need to be overcome from regulatory and business perspective.
We can watch how more and more sectors will take their place in this space of endless possibilities.