Trust before technology: How retailers should navigate metaverse

By Daniel Shin

Apple announced the Vision Pro, a new headset for the metaverse. It may be a game changer in the somewhat stagnant virtual reality (VR) headset market. It is a bold statement. It may redefine the niche category and attract more people to this new world. Some commentators have argued that this expensive ($3,500) device is a mixed-reality headset, meaning that it is supposed to combine elements of both virtual reality and augmented reality.

It is interesting to see that Tim Cook, Apple CEO, who delivered this important keynote speech announcing Vision Pro at the Worldwide Developers Conference, made not a single mention of the metaverse during his talk, not even artificial intelligence (AI). Instead, Tim Cook talked about spatial computing as a point of arrival for this new gadget.

These sleek but expensive goggles with the Apple logo will be a placeholder for the new era that Apple envisions. There is no metaverse with this thing. Believe it or not, the metaverse is not the mainstream pursuit of Apple in this first iteration, at least.

The Vision Pro creates a paradigm shift for this new user interface (UI). With this new device, people can interact with the things in their immediate field of vision with the least amount of visual distraction. There are many sensors that help with eye, voice and gesture tracking.

People can operate this device in a completely different way, building upon a new operating system called VisionOS that is linked with the Apple ecosystem. Certainly, this will create a different spatial experience that we've never seen before. In the coming months, we will see more practical applications for this new device and what the key content will be. Spatial computing led by Apple's Vision Pro will also likely bring a new dimension to our shopping experience.

Even if Apple is shying away from specific terms like the metaverse or AI, they are here to stay. The technologies behind the metaverse and AI are evolving each day and they promise to make many positive changes in our day-to-day lives. The speed of innovation is phenomenal. From applications for energy and engineering applications to heavy industries, defense, manufacturing, auto and more. Not just for this generation, but for the many others to come.

The metaverse is a collective shared space that inspires a growing number of virtual engagement and business models for gaming, socializing and shopping. This new visual and cognitive meta-layer is powered by various new technologies that are mentioned above such as spatial computing, mixed reality, the blockchain, cryptocurrency and so on.

Retail is one of the industries that can benefit from this marvelous new adventure into the metaverse and AI because they offer new ways of connecting with people, creating immersive experiences and generating new revenue streams. Like this new Apple spatial computing device that inspires developers, artists and entrepreneurs to strive to achieve their dreams, retailers must undergo many positive changes by embracing new technologies in the metaverse era sooner rather than later.

The metaverse and AI will accelerate the creation of highly interconnected "phygital" (physical and digital) experiences at stores. We will see more retailers creating hybrid stores and combining the best from the physical and digital worlds. Virtual salespeople (like a non-playing character in an online game) will be connected with various types of generative AI technology; a massive customer care database can be more than helpful for customers to pinpoint what they are looking for and efficiently complete their shopping journeys.

It will also help customers to move seamlessly between stores in the virtual world and real life. Customers can try on new clothes virtually on their avatars in the metaverse, get reactions from others in their social network first and then try them on in real life. If they like it, they will eventually buy the item later in the comfort of their home 24x7, but these types of metaverse commerce shoppers are much more engaged than ever.

The metaverse and AI will help expand brand presence. Retailers can extend their brand reach beyond the physical store by creating virtual storefronts, pop-ups or customer engagement events in the metaverse at a fraction of the cost. Retailers can incentivize participation and distribute ownership in the spirit of Web3 to reduce the cost of customer acquisition. Customers may interact with brands better and buy exclusive products only through the metaverse, where they can sell it back to the secondary market with a profit, if they wish.

AI will be instrumental to enhance customer loyalty. Retailers can leverage the metaverse and AI to create more personalized, engaging and memorable experiences for customers. It will also help foster a sense of community and belonging among loyal brand fans as the metaverse creates a new venue where people can express and interact with one another. Customers can explore, play games along with others and access exclusive content as a key attraction in this new medium.

There could be some challenges and uncertainties that retailers need to consider. Retailers should be aware of how to protect their intellectual property rights, how to comply with regulations and ethical issues and how to measure and optimize their key business performance in the metaverse. But, most importantly, retailers should learn more about how to make this new venue more humane by actively moderating dialogue and customer interaction that AI is still largely behind on.

Retailers are racing to win the metaverse competition. Many brands have begun creating sellable virtual items as well as core products through metaverse commerce. Others also invest in their metaverse strategy, as a whole, new shopping experiences are being created in the metaverse. If you don't do it, someone else will. Retailers need to be agile, innovative and customer-centric to succeed in this new frontier market. Retailers should build trust first, though. Trust should always come first in any relationship. Trust does not only meet consumer expectations but also connects to business growth.

Daniel Shin is a venture capitalist and senior luxury fashion executive, overseeing corporate development at MCM, a German luxury brand. He also teaches at Korea University.