The auditing and consulting company PwC has analyzed the influence of the metaverse on the retail and consumer goods industry, after all, the market volume of metaverse-related technologies was around 48 billion US dollars (around 47 billion euros) in 2020 and until 2025 an annual growth rate of 43 percent expected.
The interest of retailers and manufacturers in virtual worlds is also growing, after all, fashion shows have been taking place in virtual worlds for some time; there are often purely digital collections and customers use filters to see as realistically as possible what a piece of clothing or furniture looks like on their own body or in the living room.
The relocation of events, products, shops and sales strategies into linked worlds of reality and virtual spaces is one of the first steps towards Metaversum for the consulting company. For this reason, PwC analyzed the opportunities, risks and requirements of the metaverse for companies in a white paper, especially in the retail and consumer goods sectors. Using numerous examples, she describes how the metaverse is changing consumption and life beyond, and how retailers and manufacturers can set the course for success in good time.
Metaverse means evolution
A uniform definition of what the metaverse actually is is still missing. However, there is agreement on certain characteristics: “The metaverse merges the real with the digital world and lets users immerse themselves in virtual, immersive spaces in other worlds in which they travel with avatars or changing personas. The metaverse is interactive and persistent, which means it persists even when the users are not online at the moment,” according to the whitepaper.
The development takes time: “The Metaverse is not a revolution, but an evolution. Getting there is a slow, continuous process that has long been in full swing,” comments Susanne Arnoldy, Head of Digital for Advisory Germany and Consulting EMEA, in a statement.
Technology as a growth driver
Innovative technologies such as artificial intelligence, virtual/augmented reality (VR/AR) and blockchain are driving this development, some of them rapidly. The annual market volume of artificial intelligence was estimated at 129 billion US dollars in 2021 and is expected to reach 361 billion US dollars in 2025 with an annual growth rate of around 30 percent.
VR technologies also continued to develop and generated sales of around 36 billion US dollars (around 35.5 billion euros) last year; for 2025, with annual growth rates of 46 percent, more than five times as much is expected at almost 192 billion US dollars (around 189 billion euros). In the case of blockchain applications, this is 67 percent and, according to forecasts, the market volume is expected to reach almost 30 billion US dollars by 2025.
$50 billion in additional sales of fashion and luxury goods
The Metaverse itself will also generate increasing sales for companies: According to market experts, the volume of AR/VR, blockchain and AI technologies in the Metaverse context was around 48 billion US dollars in 2020; Experts expect a growth rate of 43 percent in the next five years. Investment bank Morgan Stanley estimates that the metaverse could add an additional $50 billion to the fashion and luxury goods industry by 2030.
In terms of marketing and sales in the metaverse, the gaming industry is playing a pioneering role, because avatars, AR and VR are already commonplace there. “Retailers and consumer goods manufacturers are showing growing interest in collaborating with digital platforms and moving their products, offers and online shops to a virtual world,” according to the analysis.
“The transformation in retail and the consumer goods industry is in full swing. The ‘first movers’ have long been developing new business models and customer contact points in the metaverse. The corona pandemic has intensified this development towards digital worlds and projects,” summarizes Arnoldy.
The target group are the ‘digital natives’ who grew up with gaming and e-commerce and react enthusiastically to new technological developments. But the other age groups also represent an exciting market.
Even if some fashion companies are already designing their products completely virtually, that does not mean that they have arrived. “It does not mean that these companies are already in the metaverse. However, the use of innovative technologies in combination with a corresponding business model is a step in this direction,” says Arnoldy.
Digital twins, purely virtual products and non-fungible tokens (NFTs) – they all want to be covered. Furthermore, CryptoPunks have caused a stir, computer-generated, digital profile pictures, some of which are sold for millions.
“The idea behind it is that the product is unique. This makes it a luxury product and status object,” says Arnoldy, who takes a critical view of this development: “In my view, it is important that the virtual worlds are open and usable for everyone. By deliberately making scarce, companies create an artificial market that violates this concept.
But the PwC expert is convinced that the Metaversum is more than a buzzword: “The Metaversum opens up great growth opportunities for retail and the consumer goods industry through new business areas and marketing channels that enable innovative brand experiences for customers and interested parties.”
However, companies should be aware of the risks and challenges: “It is important for retailers and manufacturers to constantly analyze consumer behavior and build a solid digital basis for their company in terms of organization, processes, data and architecture , also independent of the metaverse but all the more for it. It is also important that retailers come from the strategy / from the use case and in the second step deal with the technology / metaverse for the purpose of implementation and not the other way around,” advises Arnoldy.