How the metaverse is helping fashion brands improve customer interactions

It’s early, but the metaverse has emerged as a new frontier for brands to explore new technological boundaries and connect with customers in novel ways. According to a study by McKinsey, 59% of consumers are excited about transitioning their everyday activities to the metaverse. Virtual shopping experiences are an early winner here, allowing customers to immerse themselves in new types of shopping experiences. 

As the digital realm continues to expand, consumer-focused fast fashion brands are continuously on the hunt for cutting-edge solutions that enhance their customers’ shopping experiences. As the metaverse continues to evolve, it opens up a world of possibilities for brands looking to boost their customer engagement and data analysis efforts. The ability to track customer behavior and preferences in real time enables brands to fine-tune their offerings and marketing strategies. 

As described by Olga Dogadkina, cofounder and CEO of virtual store platform Emperia, virtual shopping experiences in the metaverse aid in enhancing brands’ ecommerce strategy by adding a layer of interactivity and user experience. These layers can exceed the in-store experience by personalizing and enriching the shopping journey for clients.

“While 2D websites were merely a tool that enabled an online purchase, through a simple grid of images and text, it lacked the customer journey, storytelling, and the ability to provide the customer experience and product discovery [that] retailers’ physical stores strive to achieve,” Dogadkina told VentureBeat. 

Whether it’s through hosting virtual events or offering personalized shopping experiences, the emerging metaverse is poised to provide a platform for brands to truly connect with their customers. For high-end retailers, the virtual world offers an opportunity to showcase limited-edition products that can’t be found in the physical world. 

The rise of immersive virtual retail

The metaverse represents a shift in our online interactions, paving the way for a more integrated and immersive experience across various aspects of life — work, play and even fashion. Younger generations already adopting augmented reality (AR) technology expect a level of utility beyond just entertainment, and fashion brands in the metaverse are responding. They’re already showcasing their collections in new ways, launching digital fashion shows and immersive experiences that transport viewers into the creative world of the designer. 

By employing virtual reality (VR) and AR technology, brands can design digital spaces that closely resemble their brick-and-mortar locations. The result is that shoppers can navigate through virtual clothing racks, “try on” outfits and engage with store personnel in real time. 

Another exciting aspect of the metaverse for fashion brands is that it provides a platform for companies to experiment with new business models based on interaction with communities. With the ability to host interactive experiences, such as virtual games or challenges centered around their collections, fashion brands can foster a sense of community and engagement among their customers. These experiences allow customers to compete against each other, or collaborate toward a common goal of winning prizes and rewards. This not only enhances customer engagement but also helps to cultivate brand loyalty.

“Virtual stores allow retailers to bridge the gap between the transactional nature of an ecommerce purchase and the personalized shopping experience brands can cultivate in-store,” Dogadkina said. “Considering virtual stores’ intimate, personal and inclusive nature, we are seeing an increasing demand for such spaces by anyone from financial institutions to universities, entertainment and others.”

Dogadkina explained how Bloomingdale’s recent holiday virtual store, powered by the Emperia platform, shows how one brand can incorporate multiple experiences under one roof, while allowing each brand to shine its own uniquely identifiable set of brand characteristics. 

“While Ralph Lauren, CHANEL and Nespresso were all featured within Bloomingdale’s virtual world, they were each uniquely positioned within their own spaces, adding on to the user journey of discovery, yet simplifying the shopping experience, through one centralized checkout process and cohesive user navigation,” said Dogadkina. 

With the ability to host interactive experiences such as virtual games or challenges centered around their collections, fashion brands can foster a sense of community and engagement among their customers. These experiences allow customers to compete against each other, or collaborate toward a common goal of winning prizes and rewards. This not only enhances customer engagement but also helps to cultivate brand loyalty. 

“Adding on a layer of gamification attracts engagement of Gen-Z users, increases shopper engagement with the brand — allowing the latter to meaningfully reward the user — and drives stronger loyalty, a topic which most retailers are struggling with today,” explained Dogadkina. 

Of course, she added, tracking users’ movement within these stores, while learning their shopping preferences, product affinity and habits, allows brands to further personalize the user experience.

Unique ways to evolve consumer interaction

Avatars have become a crucial aspect in the realm of the metaverse, serving as a powerful tool for brands to deliver a cutting-edge retail experience. Direct-to-avatar, or D2A, is rapidly gaining popularity as the latest retail strategy in the digital realm, as an increasing number of people, especially the younger demographic, invest more time in constructing a virtual representation of themselves online. 

In addition, the versatility and customization options avatars offer make them an ideal way to market a wide range of digital goods, including clothing, styling and food. 

Gucci has taken the lead with its digital avatar clothing and accessories. In addition, the metaverse shop “Nikeland” has received over 7 million visits to date, showcasing the limitless potential it holds for businesses looking to reach a virtual audience.

Yashar Behzadi, CEO and founder of the Synthesis AI platform, says that such metaverse experiences are merging the best parts of physical stores and traditional websites in a new and more immersive way.

“The metaverse brings together the convenience of online shopping with the ability to experience products virtually through immersive technologies. Virtual goods, such as avatar clothing skins, enable brands to cost-effectively test new designs and gather immediate consumer feedback,” Behzadi told VentureBeat. 

The metaverse also allows fashion brands to reach a wider audience. The inaugural Metaverse Fashion Week saw several fashion brands showcasing their designs, including Dolce & Gabbana, Etro, and Elie Saab. In response, social media platforms are exploring direct-to-consumer shopping options. 

For example, Instagram has introduced AR-powered makeup try-ons, Snapchat launched Dress Up, a platform for try-on experiences from retailers and brands, and TikTok recently introduced TikTok Shop, allowing users to make purchases directly through the app. This could be a game-changer for the fashion industry, allowing brands to reach a new demographic of customers looking for a more sustainable and affordable way to stay stylish, while building a global following.

Behzadi explained that virtual try-on technologies allow consumers to realistically test clothing fit, providing brands with an instant global reach. 

“In traditional brick-and-mortar stores, it takes many months to plan, produce and distribute goods. With instant global reach, brands can quickly test a multitude of products and gather feedback on the popularity of items and features,” said Behzadi.

Ivan Dashkov, head of Web3 at sporting goods manufacturer PUMA, believes that the significant advantage of utilizing the metaverse is that brands can build immersive experiences and have visitors play alongside the brand no matter where they physically are.

“At PUMA, we’re focused on building engaging experiences. So for us, it’s important to see how much time people spend in these experiences and how many buy digital goods. With the emergence of NFTs, digital goods are becoming more ubiquitous in our lives. As a brand, we must utilize all these data points to figure out where and how to best serve our audience,” Dashkov told VentureBeat. 

Luxury NFT collections now offer both digital and physical products, as well as exclusive access to events. For example, a package purchase includes physical and digital items and admission to couture shows. NFTs have the potential to foster long-term engagement and brand loyalty, making them a valuable asset for luxury brands. The ownership of an NFT becomes a privilege, elevating the luxury experience for buyers. 

During New York Fashion Week, PUMA showcased their exclusive sneakers NFRNO and Fastroid through NFTs in their own mini metaverse experience called “Black Station.” This added value and tapped into the psychology of scarcity and limited editions.

“Black Station enhanced the consumer experience by letting customers interact with the product, experience it in 3D, and see it on our ambassadors — like Neymar wearing it before the product was ever shipped out. Giving consumers access to these types of experiences in the metaverse is a core part of our strategy in the space,” said Dashkov. 

Dashkov explained that it was a massive shift from how PUMA typically sells products. 

“Normally, we design a product, then take 12–18 months to produce it, ship it to stores, and then it sells to consumers. With our Fastroid and NFRNO NFTs, consumers bought the product, and we knew exactly how many to make before the product was ever manufactured. It’s an interesting DTC business model that we’ll continue to experiment with in the future,” he added. 

As with any new space, there is a learning curve to understand the breadth and depth of the potential impact, according to Jeremy Dalton, U.S. head of metaverse technologies at PwC.

“Currently, many brands lack comprehensive knowledge of the functionality and demographic of virtual worlds and are challenged on how to leverage this new channel to drive greater engagement. Brands will need to define the ‘why’ for their customers, answering questions as to why this new experience is relevant for them,” Dalton told VentureBeat. 

Additionally, he believes that brands will need to work to:

• Dispel rumors that the metaverse is just hype.
• Focus on the long-term value offered by the metaverse rather than the short-term gain of a singular marketing event.
• Complement their theoretical knowledge of the metaverse with practical experience through pilot programs and experimentation.

“The metaverse has the potential to significantly disrupt the traditional marketing model, blurring lines between real and virtual, and creating a powerful channel for future retail commerce,” said Dalton. “If retailers harness this power correctly, they can build relevance to all areas of consumers’ lives.”

PUMA’s Dashkov said we will soon be seeing brands creating more and more metaverse experiences to provide a point of interaction with the brand and their community.

“The metaverse makes brands more accessible. Not everyone can physically attend a PUMA fashion show or shoe launch party due to geographical constraints, event capacity, schedule conflicts, etc. But when you host experiences in the metaverse, it breaks down many of those barriers,” said Dashkov. “Additionally, the definition of a product for a brand will change. So brands entering this space need to evolve their idea of what a product can be in the metaverse.” 

Likewise, Behzadi of Synthesis AI says that interoperability across platforms will be vital to the success of brands in the metaverse. 

“The metaverse is still nascent, and the time people spend on these new platforms is relatively low compared to traditional channels. So although there is a promise, the metaverse has not yet reached the size and velocity that can drive meaningful revenue for brands,” he said. 

New experiences — including virtual product demonstrations, brand experiences, virtual events and concerts, and new social product undertakings — will drive consumers, Behzadi said. That makes the emerging metaverse a new frontier that is different from traditional marketing. The metric likely to drive adoption is the total time and money required to create cross-platform assets and experiences, he added.