Are You Preparing for the Metaverse?
By Marc Weiss - CEO, Management One
“There will be no such thing as the tech sector. The world will be transformed through tech intensity at scale. Every organization will not only need to adopt the latest technology but more importantly build their own unique digital technology or be left behind.
-Microsoft CEO Satya Nadella at the 2021 Microsoft Build conference.”
So not every retailer needs to leap immediately into building for the metaverse. However, every retailer needs to give serious thought to how they are approaching digital. I currently see three camps of retailers when it comes to digital:
First, those not involved, or making a minimal effort and investment in their digital footprint.
Second, retailers who are engaged and investing in digital.
Third, those who did not come from retail but from the digital world, and became retailers.
The first camp represents legacy retailers, who see their business as location-driven, and have done little to nothing to adapt to a growing digital environment.
Then there is the second camp, they are the first and next adopters. They represent a fairly wide spectrum. Some began their journey early on and were in a position to flourish last year. In this camp also are the next adopters who rose to the occasion during the Covid-19 lockdown. These retailers got a fast and furious education and have fared in two extremes. Some are doing so well they are closing their brick and mortar locations because their e-commerce has exploded. Others are investing, learning, and building their digital business, and others are just finding marginal success... struggling and feeling overwhelmed.
The first adopters from this camp are separating themselves quickly. They are in the best position to succeed because of their cumulative knowledge of retail, their digital prowess, and their headstart.
And now we come to the third camp and these are digital entrepreneurs first and retailers second. The most successful and visible example is Shein. Founded by an SEO consultant in 2008, it is now the largest Fast Fashion E-commerce retailer in the world. According to an August 10th,2021 article in Vox, “Shein raked in 10 billion in 2020, which was its 8th consecutive year of revenue growth of 100%. The retailer is also one of the most talked-about brands on TikTok and YouTube, and the most visited fashion and apparel site in the world.”
Many retailers across North America are in this, the third camp. They are digital-first and retailers second (think Warby Parker or Bonobos). Young, nascent entrepreneurs who grasp social media and have exploded on the scene have built business almost overnight, sometimes exceeding the revenues of legacy retailers who have been in business for as many as three generations. They are not only digitally successful, but they are mastering the science of assortment planning and engaging other third-party applications to soar to new levels.
What is amazing about the third camp of new retailers is they are learning retail faster than the legacy retailers who are struggling to build a digital footprint.
On June 7th of this year, Retail Prophet Doug Stephens wrote a piece in the Business of Fashion titled “The Metaverse Will Radically Change Retail”. In the article, Stephens describes the Metaverse as ”the collective, persistent, parallel reality created by stitching together all virtual worlds to form a universe we can seamlessly traverse.” Bringing together an array of digital technologies that will interconnect seamlessly among all platforms.
Another reason this is important to know is that Mark Zuckerberg is betting Facebook’s future on the Metaverse.
Over twenty years ago I was deliberating whether to move our platform off our own servers and go into a server farm. Early steps for us before we went onto Google’s Big Table and Microsoft’s Azure. I sweated the decision and spoke to the brightest person I knew at the time in technology. He said Marc, hundreds of billions of dollars have been invested in building the cloud. It is not going anywhere, it is the future of all technology. He was right. And thus we began our first step into the next generation of technology.
Today, just follow the money. Just like you go to markets today to buy products, you will also be shopping for the technologies and talent that will transform your business. It is not a matter of when, it is a matter of now!
Onwards and Upwards.
Marc