No longer seen as strictly a game, the metaverse is being viewed by more and more investors as a serious real estate investing opportunity. Likewise, an increasing number of retailers have been gradually making their way into the metaverse.
My colleague Kristi Waterworth recently discussed the metaverse trademarks Walmart has filed; the fact that brands like The Gap, Gucci, and Nike are already there; and the likelihood that other retailers will follow suit.
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Investors in physical retail are starting to pay attention. What might this mean for them? Could the metaverse take e-commerce to the next level and leave brick-and-mortar retail in its virtual dust? Let's explore what a metaverse presence could mean for retail brands, what Meta's role might be, and the potential implications of all this for physical retail investors.
Meta may choose to exist in both worlds
As you have probably gathered from the rebranding, Mark Zuckerberg and Meta -- formerly known as Facebook -- are ready to go all-in on the metaverse. But it's interesting to note that the company may also be planning to open real-world retail stores worldwide as it heads in that direction.
According to The New York Times, the primary purpose of the stores would be to introduce consumers to the company's virtual and augmented-reality devices, including headsets and smart sunglasses. The company has experimented over the past couple of years with physical pop-up locations, both to demonstrate its Oculus hardware and to draw more small businesses to its platform.
The stores are apparently just part of an ongoing discussion at this time. But it is interesting that despite such strong interest in the metaverse, even Meta still sees a place for physical retail. The social media giant could certainly be an interesting foot traffic draw for any shopping centers they might move into.
The metaverse could befriend physical retail
Some are predicting that as an increasing number of people hang out with friends, work in offices, attend concerts, and go to school in the metaverse, they'll want to get most of their shopping done there, too. But that sounds a lot like early internet predictions that e-commerce would swiftly bring about the retail apocalypse. Meanwhile, a couple of decades or so later, and e-commerce still makes up only about one-fifth of all core retail purchases.
E-commerce has actually served to complement physical retail in many ways. Macy's CEO even said on the company's third-quarter call a few months ago that the retailer does better online in locations where the company has a physical presence.
More likely than a metaverse retail takeover is a scenario where like e-commerce, the metaverse will ultimately serve to augment physical retail in various ways. From outfitting avatars and metaverse homes in branded products to occasionally shopping with retail brands in their metaverse stores for in-store or curbside pick-up or home delivery, the possible retail implications of the metaverse are constantly expanding.
One thing that's clear is that consumers are being immersed in a world with the potential to take marketing to a level it's never seen before. And that has the potential to positively impact retail brands, both inside the metaverse and out here in our physical world, too.
As much as people may come to enjoy their time in the metaverse, they're unlikely to decide they no longer like also getting out into the real world. So as you continue to see announcements about more retailers entering the metaverse -- and you undoubtedly will -- resist any urge to abandon your retail real estate. You won't want to miss out on the benefits the metaverse may have in store.
