During the height of the COVID-19 pandemic, consumers broadly shifted their shopping habits from in-person to online browsing. Now, as the metaverse begins to gain traction, could fashion become a compelling use case?
In this clip from "The Virtual Opportunities Show" on Motley Fool Live, recorded on June 7, Motley Fool contributors Rachel Warren and Travis Hoium share some ideas about how the metaverse may play a role in fashion retail.
Rachel Warren: One thing the article noted was that retailers need to know basically the ones that are lagging behind, ones that haven't started to look into getting in on the metaverse hype, if you will, may not fare well in 2022 and that the time to prepare for a virtual future is now. The article gives the example of some of these very well-known brands like Gucci, Louis Vuitton, Dior. The fashion industry has been really at the forefront of a lot of retailers that have been building out their own space in the metaverse, we've seen a lot of that with luxury brands.
There was a really interesting article in Vogue Business, for example, that were saying that marketers and store designers and merchandisers and more will have to begin thinking very differently about what a store is. In a world where any experience is possible, why on earth would we use our industrial-era version of retail as a template for the future? We're looking at retailers that are just starting to make their way in the metaverse. We've looked at luxury brands that are already building out their own digital interactive experiences. As we're in an age where we've seen such a shift to e-commerce and concerns about the death of retail, it seems like the metaverse could potentially be the answer to those concerns. A lot of companies that have been dealing with waning brand loyalty in the digital age, having 3D experiences, immersive interactive experiences that allow shoppers to spend more time within that space than they would if they were just maybe going on your website to shop online or going in an actual physical store.
It's really interesting as we think about what this could look like in a variety of spaces. I think again, we're going to see the broadest early adoption in those industrial business-use applications, but on the more creative side, I do think there is a lot for retailers to explore here. There has been some estimates from Bloomberg, for example, that the metaverse market could hit a valuation of $800 billion by the year 2024, so that's essentially two years from now. We know that right now gaming hardware and software, services, those companies are seizing a lot of the market share in the metaverse, but there's a lot of opportunities here for retailers to get in, not just to build immersive spaces and have perhaps interactive shopping experiences, but also to partner to create virtual worlds within games, which is something that brands like Gucci and Louis Vuitton have already done. There's a lot to watch here, and seeing how the retail space could be revolutionized by the metaverse, I think this is a specific area I'm going to be following a lot more closely and we'll probably talk about more on the show.
Travis Hoium: Really interesting to see what actually gets built out. I guess I'm always questioning what's reality with some of these things because a lot of it seems like a lot of projection of like, oh, here's this new tech, here's how it can be used. Whereas if we look at retailers performance over the last couple of years, I think you're seeing the companies that have a really strong physical retail presence doing pretty well. I think that there is the idea that we're going to be doing everything in the metaverse in the near future is probably a little ahead of its time, if you will.
That said, like we talked about, you brought up Microsoft last week and some of the industrial design things they're doing. There will be use cases where it's going to be really valuable. I remember seeing demos five years ago of people doing fashion apps and you could try something on and see what it looks like and size yourself all with digital tools. That's the thing that I think could be really interesting, and if you're a Gucci, a high-end retailer like that and you can show somebody what they're going to look like and size them and do that all digitally, that could be really compelling, probably a little harder for Target to pull that off.
Warren: Could be interesting. I guess to be clear, I don't personally see this being something where in two to three years everyone's trying on whatever outfit they're going to buy or retail item in the metaverse. But I do think that it is something that retailers are going to be looking more at. I do think it's been interesting to see how there has been a return to more in-store shopping across a variety of retail sectors over the last year or so. I do think part of that is just people got so tired of having to buy everything online and not being able to leave their house. They want to go back out again. I do think that will continue to pair well with e-commerce strategies but I do still think in the future that online shopping piece of it is going to outlay in-store shopping at least for a lot of sectors. We'll see. I may be wrong about that.
Hoium: There could be some interesting use cases, too. Think about a company like Stitch Fix. Their niche is this boutique content and then they are trying to do this dance from "there's going be a personal stylist" to "AI is going to do it for you." What if it was all digital and you could just say hey my name is Travis, I'm 6'2. I weigh this much. Here's my dimensions of my arms so that my sleeves are long enough. I put on my Apple -- I flip into VR mode on my Apple glasses and walk through a closet that has 10 different options for me that's all picked automatically. That's the vision that I think there will be probably niches that it makes a lot of sense. Yeah, we'll see how it plays out. Hardware has got to get in more hands.
Warren: Way better [laughs] and smaller [laughs].
Hoium: Yeah, it's got to get smaller and like if there's only 8 million VR headsets out there and only half a million of them are ever used, that doesn't make a very compelling investment for a retailer. But yeah, when people get more devices in their hands, I think they'll definitely make the investments. It'll be interesting to see what they test out for sure.
