Which burgeoning technology will take centre stage in 2022 and what opportunities will it present for retailers? We put the question to a panel of tech experts

1. Shopping in the metaverse

Metaverse has been a buzzword over the past few months, with more retailers and brands jumping on the bandwagon and trying to get some skin in the game – quite literally.

Speaking at the National Retail Federation (NRF) event Retail’s Big Show in New York this month, WGSN Insight senior strategist Cassandra Napoli explained: “The metaverse is the successor to the mobile internet – it will become the fabric that binds our society and culture together through connected third-platform places. 

Gucci_In_Bloom_room_2_Gucci_Garden_on_Roblox

The Roblox Gucci Garden attracted 2 million gamers in two weeks

“With it will come the meta-economy, which will provide new opportunities for work, wealth status and identity, and will impact how consumers communicate, play, shop and learn.”

According to data from WGSN, the global metaverse opportunity is set to be worth $800bn (£600bn) by 2024.

The key opportunities for brands and retailers in the metaverse lie in creating new awe-inspiring worlds, interactive experiences to engage consumers and direct-to-avatar items.

Big brands that have already embraced the metaverse and created experiences include Selfridges, Nike and Gucci. The latter’s Gucci Garden in Roblox – a gaming platform that allows users and brands to create their own worlds with associated experiences and games – attracted 2 million gamers during a two-week period in May 2021.

“Branded destinations or digital playgrounds are additional ways for brands to enter the metaverse and engage with fans via their own interactive sites,” Napoli says.

Most notably, a Gucci Dionysus handbag sold in the experience for 475 Robux, which equates to around $6 (£4.50), before reselling on a secondary site for 350,000 Robux or $4,115 (£3,077) – $800 (£600) more than the bag sells for in real-life Gucci stores.

“Branded destinations or digital playgrounds are additional ways for brands to enter the metaverse and engage with fans via their own interactive sites”

Cassandra Napoli, WGSN Insight

As more of these metaverse locations become shoppable, the opportunities for brands and retailers will multiply while the direct-to-avatar market can sidestep supply chain issues and reach a younger generation of consumers.

The metaverse is clearly a big untapped opportunity that will expand in 2022 and beyond as consumers live more of their lives online.

2. Resale and loyalty get the NFT treatment

Non-fungible tokens (NFTs) dominated headlines last year and retailers will embrace the opportunity to offer customers the chance to own a digital piece of the action. 

Text on a blue background says: {ADIDAS: PRADA, RE-SOURCE}

Adidas and Prada have launched an NFT art collaboration

NFTs are one-of-a-kind digital assets. They exist on a blockchain, a shared decentralised ledger that records transactions and ownership of assets publicly.

Luxury and sportswear brands are among those leading the charge and creating their own collectables. Last week, Prada and Adidas launched an NFT art collaboration, while Nike purchased NFT platform RTFKT in December.

As NFTs gain recognition in the public sphere, retailers could see the transformation of loyalty programmes in the future.

“An NFT is not just something that proves you own a particular asset; it also has the possibility to add a smart contract,” explains Dr Steven Van Belleghem, a customer experience expert. 

He points to the music industry where smart contracts are already being written into NFTs to reward dedicated fans. Last year, US band Kings of Leon introduced tokens offering ongoing perks, including front-row seats for life. 

US entrepreneur Gary Vaynerchuk, who was recently added to Gymshark’s advisory board, has created his own NFT collection.

With the smart contracts embedded in his VeeFriends NFTs, owners gain a three-year pass to an exclusive conference organised by Vaynerchuk. Other NFTs offer the opportunity to spend time with him for a game of checkers.

“The blockchain gives us the ability through connecting physical goods to NFTs to actually track the ownership and resale of these items”

Doug Stephens, Retail Prophet

Van Belleghem imagines that retailers could introduce similar initiatives to transform loyalty programmes, providing ongoing rewards to the most dedicated customers.

A Bored Ape illustration dressed in Adidas hat, sunglasses and jacket

Adidas has created NFTs with Bored Ape Yacht Club

Doug Stephens, futurist at Retail Prophet, thinks NFTs could also transform the resale markets that have thrived in recent years, particularly in sportswear.

“The blockchain gives us the ability through connecting physical goods to NFTs to actually track the ownership and resale of these items,” he says – a system that could be transformative for brands such as Nike, which is currently “losing billions and billions of dollars on the resale and collectable sneaker market”.

“Nike could potentially have the ability to associate a particular sneaker with a block on the blockchain, which is then connected to a smart contract,” says Stephens.

“When a consumer buys that sneaker, you are buying a sneaker under a smart contract – meaning that when you sell this on a consignment or resale website that Nike is entitled to some proceeds.” 

“It is their intellectual property that went into creating that sneaker in the same way that a musician or an artist created something.”

Creators of NFTs are already receiving royalties when tokens are resold, paving the way for retail brands to follow suit. When an NFT by artist Beeple sold for $6.6m (£4.9m) on the secondary market last year, Beeple received 10% of the transaction due to the existing smart contract. 

3. The many faces of the physical store

In 2022, stores will retain their traditional role as a point of purchase for consumers, but many could also act as logistics centres or automated warehouses, as well as offering an opportunity for consumers to experiment directly with new technologies.

“One of the things our research showed us is that the most important services we can offer from a store are delivery and fulfilment,” explains Capgemini global retail lead Lindsey Mazza.

“It’s being able to really be the mini-fulfilment centre or mini-warehouse that allows customers quick access to products in a really short space of time”

Lindsey Mazza, Capgemini

FindYourStyle

Amazon will open its first tech-driven clothing store this year

“The reimagining of a store can be as a place to be able to serve when consumers order from all the channels,” she says. That includes click and collect, curbside pickup, traditional delivery or delivery from third parties, such as Uber. 

“It’s being able to really be the mini fulfilment centre or mini warehouse that allows customers quick access to products in a really short space of time,” she concludes.

Chinese ecommerce giant JD.com recently opened robotic and cashierless stores in the Netherlands, where shoppers order products in advance online and collect them in-store.

Mazza highlights how stores will be using the combination of physical and digital “to create augmented situations in stores where consumers will be able to use technology to support their purchasing”.

She references smart hangers, smart mirrors and robots that can cut down waiting times for shoppers seeking specific items.

In Amazon’s plans for its tech-driven clothing store in California, customers will use an app to scan items before trying on or purchasing them and will receive product recommendations based on the scanned garments.

Modivo Entrance

Modivo invites shoppers to browse on tablets throughout the store

Amazon Style will stock one of each item on the shop floor to maximise space and provide consumers with more options, with the majority of its clothing stored out the back. Items requested by customers will be sent directly to the changing room. Each changing room will also feature an individual touchscreen, allowing customers to browse for similar styles, rate products or request new sizes. 

Polish fashion retailer Modivo does not feature any stock at the front of its Warsaw store. Instead, the store is linked to an automated warehouse that delivers items directly to the changing room after consumers browse clothing on a tablet.

4. Virtual fitting 

Returns rates are at an all-time high. Fashion retailers such as Boohoo and In The Style lamented an uptick over the festive season in 2021, while social media is increasingly seeing calls for size inclusivity and consistency. 

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Nobal’s iMirror creates 3D avatars of customers to try on clothing 

“Traditional sizing systems have been long overdue a refresh,” says WGSN Insight strategist Brielle Saggese in a fit and sizing report last year.

“Consumers raise issues with vanity sizing, a lack of plus-size options and inconsistent standards. Brands have trouble fielding size-related returns, which doubled between 2019 and 2020 and account for over 10% of US retail sales.”

To tackle these issues, body-mapping technology and smart mirrors are likely to become more universal features so customers can try on garments virtually before they buy to check the fit.

“No fitting rooms means dramatically reduced shrinkage, a smaller store footprint with fewer checkouts and, with imaging technology, there will be better virtual fits”

Bill Roberts, Nobal

Puma, for example, has launched a collaboration with tech firm Nobal to use its iMirror in the athleisure brand’s New York flagship.

iMirror measures more than 200 points on the customer’s body to create a 3D avatar, which can then virtually try on clothing in-store without the customer actually having to physically do so.

“In the wake of the pandemic, many retailers won’t be bringing back actual fitting rooms,” Nobal chief executive Bill Roberts explains.

“The benefits are many: no fitting rooms means dramatically reduced shrinkage, a smaller store footprint with fewer checkouts and, with imaging technology, there will be better virtual fits, which in turn means far fewer returns.”

Walmart has also made moves in the virtual fitting space, acquiring Israeli startup Zeekit, which counts Adidas and Macy’s among its clients.

Social media companies such as Snapchat and Instagram are also looking to make use of AR to help with virtual fitting. Snapchat owner Snap recently acquired Fit Analytics and has previously collaborated with beauty brands Estée Lauder and Kylie Cosmetics to offer AR beauty try-on experiences.

“The virtual fitting room is set for mass adoption as consumers get used to digital experiences and transactions, and demand a better fitting experience both online and in-store,” concludes Saggese.

5. Voice-activated shopping

While consumers may already be used to asking Alexa or Google Assistant what the weather is like, a trend tipped to take off in 2022 is taking this one step further and asking virtual assistants to do their shopping for them.

“In the last five years pre-Covid, we’ve seen the democratisation of commerce and what it really looks like to have voice-activated shopping through some of our in-home listening devices,” says Capgemini’s Mazza.

“Voice commerce is here, it is here to stay and it is going to continue to expand”

Lindsey Mazza, Capgemini

“As people relied on those devices more in terms of being home all day and answering questions for homework and supporting your shopping list and other things, there has been a big expansion in that market. 

Alexa device sat next to fruit, eggs and a bowl of granola in a kitchen

Customers are most likely to use Alexa devices for grocery shopping

“Voice commerce is here, it is here to stay and it is going to continue to expand.”

Mazza predicts that this will be most common for household essentials when consumers have brands they know and trust and are happy to buy through a marketplace such as Amazon.

The retail giant has begun trialling voice-activated shopping for an entire grocery shop in the US using the command: “Alexa, order my groceries”.

While the market is largely in food currently, voice-activated shopping tech could be extended to other sectors, including health and beauty, fashion and fuel.

Payments firm Fiserv, for example, is currently trialling a collaboration between Amazon Alexa and petrol business Exxon and Mobil in the US, in which consumers can instruct the Alexa-enabled devices to purchased their fuel based on geolocation tags.

This element may not come to fruition in 2022, but it is likely that consumers will become more comfortable with voice shopping this year.

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