The Metaverse is the mall of the future, being built today.
What is the Metaverse, and what does it mean to kids and teenagers? To be frank, it’s a virtual shopping mall. It is a place of consumerism, recreation, and gathering. It is a place where kids and teens ‘hang out’.
It is a place where they spend time with friends unsupervised, without the watchful eye of their parents.
Why it matters to retail asset owners is that it’s gaining market share. It’s diverting the eyeballs of customers to its platforms, lowering foot traffic at malls. It’s already getting sales and is becoming a competitor against traditional retail space.
A study found that 52% of Gen-Z gamers felt more like themselves in the Metaverse and in real life.
This raises some questions. Why is it that they are not comfortable in the real world? What is it that makes them feel this way? Is it bullying? Is it social pressure? Is it something else? And what is it about the Metaverse that makes them feel free, that gives them the opportunity to be who they want to be?
In the Metaverse, they get to create their own avatar, a virtual version of themselves. They can represent themselves as they see themselves. Gender, color, size, pimples, fashion – they have control over these elements that shape their identity - and others' perception of them.
Before you roll your eyes at hearing about the question ‘Metaverse’, here are some stats that might surprise you. A recent collaboration between fashion brand Balenciaga and arguably addictive video game Fortnite, where players could purchase ‘skins’, a.k.a. virtual fashion, one collection netted $50 million in revenue!
Big brands, such as L’Oreal, Sothebys, Nike, and more, have already made forays into Metaverse games as a way of building brand loyalty amongst young consumers.
Roblox has 214 million active monthly users. Name one shopping mall that has that many visitors each month. 25% of users are under nine years of age.
Brands such as Amazon have cottoned on to the lucrative opportunities of the Metaverse. Amazon Anywhere is their foray into gaming, where they have teamed up with Peridot, the makers of the addictive augmented reality game Pokémon Go, to sell merchandise within the game.
Imagine the power of Amazon e-commerce in the Metaverse.
In the same way, as e-commerce became synonymous with shopping with online and in-store shopping experiences either complementing each other or converging, the same experience could occur in the Metaverse. When rolling out a new retail store, a virtual replica would be created to serve the customers who prefer to shop in the Metaverse.
24% of Gen-Alphas spend more time with their friends online than they do connecting in person. If this is where they’re hanging out with friends, this is where their fashion and entertainment spend will be channeled.
CRE owners of retail and entertainment assets should consider the Metaverse a direct threat. When Gen-Alpha starts earning an income, that is expected to be the turning point for the Metaverse’s ascendency. They’re already spending hours there with their friends; it’s easier to shop in the Metaverse than to ask their parents to take them to the mall.
What we’ve learned from Gen-Z is that Gen-Alpha is likely to be earning their own money at an earlier age than other generations, which may will see them spending in the Metaverse sooner than one might expect.