How businesses navigate the world of metaverse shopping

The metaverse offers opportunities for both entrepreneurs and enterprises.

A December 2021 Bloomberg report predicted the metaverse market to be worth $800 billion by 2024. While it's still an emerging technology, the possibilities for profit in the metaverse are varied.

Early adopters of the technology are those in the retail, entertainment and gaming industries. Microsoft's acquisition of Activision Blizzard -- the company that created the multiplayer online game World of Warcraft -- shows how companies aim to monetize the metaverse using the skills and abilities of game development companies.

Retailers are taking advantage of this approach to gamify the shopping experience. Games get people into a space and keep them there for love of playing the game. If there's an opportunity to spend money, they're more likely to do it while playing. Forever 21's Shop City is a virtual retailer within a Roblox game where users can create virtual shops among some of the game's top creators and influencers. In Shop City, users can buy and sell MetaMerch, create their own custom stores and meet famous virtual creators.

One thing that separates retail in the metaverse from traditional online and physical retail is the feature of decentralization. Decentralization is the main appeal of blockchain-based technologies. In a decentralized, blockchain-based metaverse, no single person or corporation can own the whole thing. Every user gets shares or assets for contributing to the metaverse. The world is created by all users jointly, with the ability to freely create, host, buy, sell and experience user-generated assets. Everyone can participate.

In Chapter 6 of The Metaverse Handbook, co-authors QuHarrison Terry and Scott Keeney describe Decentraland, one of the first blockchain-based metaverses created. They highlight its unique potential for hosting user-generated content and describe how entertainment and retail in the metaverse ushers in business from the physical world.

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Although Decentraland crossed 500,000 monthly active users in December 2021, at any given time they average just a few thousand concurrent active users. This means that experiencing DCL to its fullest potential is less about wandering around and more about going there with a clear purpose at the right time. In our opinion, the best way to experience Decentraland is through the https://events.decentraland.org page. Here you'll find all of the current and future events going on. Because so much of Decentraland is undeveloped, using this page to port directly to places that have been developed and are running an event makes for a better first experience.

During the last week of March 2022, in partnership with UNXD, Decentraland hosted the Metaverse Fashion Week (MVFW). The goal was to create a digital stop on the global fashion week tour that is more accessible to the global crowd. MVFW incorporated all of the same experiences we expect from a Paris or New York Fashion Week -- runways, afterparties, and pop-up shops -- except in the digital destination of Decentraland.

Hugo Boss, Tommy Hilfiger, and other major brands participated in MVFW. With the help of companies like Threedium who specialize in scanning physical objects into digital 3D file formats, these brands outfitted their model avatars in digital wearables that reflect their physical garments. And some of them even commercialized their digital fashion, selling NFTs of the garments for players to equip in Decentraland.

The larger trend they're experimenting with is determining whether NFT fashion can be a new revenue stream in Metaverses like DCL, but also operate as a digital storefront for their physical fashion lines. To test this theory, the fashion brands partnered with a company called Boson Protocol, which is creating a means for virtual commerce to deliver physical products. Boson is creating an almost trustless protocol that enables smart contracts to exchange crypto assets for services, goods, digital products, as well as physical products while minimizing the need for intermediaries.

In other words, consumers can purchase an NFT in the Metaverse and redeem the digital asset for a physical product or service. While the Boson Protocol is their smart contract system, the actual product is the Boson Portal. The Boson Portal is a fully customizable brand platform for hosting Metaverse commerce right alongside virtual events and experiences. Think of the Boson Portal as a Shopify store for the Metaverse.

Should Boson or another company prove this tech to be efficient and easy to use, they effectively will have created an e-commerce bridge where Metaverse users can shop both for their avatar and for their physical selves in the same Metaverse environment. You can imagine the idea of a Metaverse shopping mall where we browse stores, make impulse purchases, and receive these goods at our doorstep.

Decentraland's fashion district is already lined with companies who are sitting on virtual properties waiting for Metaverse commerce to take off. Today, if you take a visit to Fashion Street on the far west side of Genesis City, you'll see the beginnings of what could become a Rodeo Drive type of fashion destination. The street is lined with advertisements from the most recognizable fashion brands: Chanel, Dolce & Gabbana, Tommy Hilfiger, and so on. But there's no shopping going on. You cannot enter the buildings. There's nothing to click on or buy. It's a ghost town waiting for the gold rush to come. Still, companies are taking major bets on DCL's fashion district. The Metaverse Group, a subsidiary of Tokens.com, notably scooped up a 116-plot estate in the fashion district for nearly $2.5 million USD. Republic Realm is building a shopping center called Metajuku on a 259-plot estate near Fashion Street, which they feel could become the epicenter of Metaverse commerce. Metajuku already rents space to JPMorgan.

For fashion, the major question still remains whether people will want to do their shopping in the Metaverse. One area that hasn't encountered this problem is the gambling industry.

Located not far from Fashion Street is Vegas City -- the gambling hub in Decentraland. Naturally, these two districts are just a stone's throw away from one another, separated only by District X (the red light district, which is apparently where some people spend their casino winnings). So while Republic Realm has bought a large estate in Fashion Street, Boson Protocol has bought an entire block in Vegas City and will be opening shopping centers there too.

The main difference between the fashion district and the gambling district is that the gambling district is in operation and people are using it. The leading team in Vegas City is Decentral Games (not associated with Decentraland), which owns various casino properties in DCL including Tominoya Casino, Atari Casino, and the ICE Poker lounge. Back in February 2022, Business Insider reported that over the last three months Decentral Games brought in more than $7.5 million USD in gambling revenue. Not only that, but they also account for a third of the active users in Decentraland.

Gambling has been one of the few verticals to show monetary traction in the Metaverse. Decentral Games' properties are fully functioning casinos that will deal you hands of blackjack and spin the roulette wheel. Furthermore, they're a case study on effectively incorporating NFTs and digital assets with Metaverse experiences, all while driving commercial behaviors. To be eligible for winnings in the ICE Poker lounge, bettors must own and equip one of the ICE Poker NFT wearables. The poker games are free to play, but winners can earn $ICE tokens. When they're not playing poker, they can loan these wearables to other players, splitting the $ICE rewards if they win. With more than 16,000 NFT items and a floor price of around 2 ETH, they've built a solid community around this Web3 gambling experience.