Retail is all about consumers, and the future of retail is inextricably linked to the habits and preferences of the next generation of shoppers. According to a World Economic Forum report, Gen Z, the cohort born between the mid-1990s and the mid-2010s, will make up around 27% of the workforce by 2025. With nearly 30% of the world's population, Gen Z is the first generation raised entirely in the digital age, their behaviour and habits differ significantly from previous generations. Gen Z spends more time online than any other demographic, and their spending power is on the rise. This presents a significant opportunity and challenge for retailers, who must adapt to the changing shopping behaviours of this demographic.
One of the key findings from consumer insights provided by Google is that Gen Z and millennial consumers are twice as likely as older shoppers to state that watching an online video was their most influential shopping activity. It underscores the importance of technology in shaping the purchasing decisions of this generation.
The growing importance of technology in shaping the preferences of the younger generations of consumers is reiterated by a recent survey by Zipline, one of the world's largest delivery drone companies. The survey showed that the majority of respondents from three different generations are interested in hybrid shopping experiences that utilize mixed reality. The survey found that 85% of Gen Z respondents, 75% of millennials, and 69% of Gen Xers expressed interest in using mixed reality in their shopping experiences.
Technology and Consumer Behaviour
The power of visual appeal in driving consumer behaviour is a well-established concept in the retail industry. Research into human psychology has shown that the first few seconds of an interaction can have a profound impact on our subsequent actions. This is especially true in the context of shopping, where a visually engaging environment can make all the difference when it comes to inspiring consumers to make a buying decision.
For retailers, creating visually appealing environments has always been a key priority. The emergence of the Metaverse takes this concept to a whole new level. Retailers have the opportunity to offer immersive and engaging visual experiences that are not limited by the constraints of the physical world. By leveraging virtual and augmented reality, brands create environments that are not only visually stunning but also highly interactive and personalized.
As the Metaverse continues to evolve, it is becoming increasingly clear that Metacommerce, or shopping on the Metaverse, has the potential to be a game-changer in online shopping. Through highly interactive environments, the Metaverse enables brands to engage with customers in ways that were previously unimaginable.
Fashion products: An Example for Metacommerce
While there are many products that can leverage this new technology, fashion remains one of the most important. With its universal appeal, clothing and fashion represents the top online shopping category worldwide in 2023.
Fashion is particularly important because of how personal a decision clothing can be for consumers, and the challenges that can come with shopping for these products online. The Metaverse offers a solution through an immersive and highly interactive shopping experience that allows consumers to try on clothes virtually and find the perfect fit. This is a real blessing for consumers, as it gives them a greater level of choice and convenience. For ecommerce retailers, it also helps reduce the incidence of returned goods, which can be a significant cost for these businesses.
Overcoming the Challenges
As technology becomes more sophisticated virtual reality-based shopping experiences and Metacommerce will gain traction in the retail industry. Notwithstanding the potential benefits of Metacommerce, the industry confronts several hurdles that require resolution to encourage its ubiquitous acceptance. One of these is replicating the human interaction element that is critical in high-end and in-store retail. Finding ways to replace the customer service/salesperson who guides shoppers on their journey will be crucial. Another challenge that must be overcome is achieving economies of scale and reducing costs. Developing industry-wide Metacommerce frameworks in various areas of e-commerce could be the key to success.
As we move towards retail in the future, brands must prioritize engaging retail experiences for their future customers, for whom digital and technology is life. By leveraging technology and innovation, retailers can create retail experiences that are both convenient and unforgettable, ensuring their success in the ever-evolving retail landscape.
The article has been written by Piyush Gupta, CEO, VOSMOS