This is an excerpt from Whiplash’s latest ebook “The Metaverse of Now: How hyper-personalization is bridging the retail divide”.
The metaverse is many things to many different people. One way is to describe the metaverse is as digital spaces that bring together existing technologies including social media, gaming, blockchain, and virtual or augmented reality to enable users to connect virtually and explore new ideas – and most importantly, brands and products.
While the utopian-like metaverse of one giant shared virtual space is still a long way off—if it ever develops —siloed mini metaverses are expanding within online environments.
Brands and retailers—online and in physical spaces—are already embracing these practical applications or “fragments” of the metaverse. From 3D virtual shopping, branded NFTs, livestream shopping, and smart chatbots to experiential brick and mortar, the retail marketplace abounds with examples of hyper-personalized experiences designed to meet customers in their preferred channels.
The technological building blocks forming the metaverse have existed for years – and they are rapidly advancing. While blockchain, AR, VR, artificial intelligence (AI), and the Internet of things (IoT) are fuelling the creation of metaverses today, retail marketplaces are also leveraging innovations as diverse as marketing automation, digital currencies, and software architecture to create more seamless and immersive shopping journeys.
The merging of physical with digital, phygital uses technology to bridge the digital and physical worlds to provide unique interactive experiences for the consumer.
Often associated with omnichannel, phygital makes use of technology to create a seamless, user-friendly digital experience for the customer. 2D goes 3D with virtual shopping environments and gamification elements, 3D-rendered store displays powered by AR and VR technology, virtual consultations from a brand avatar, and social commerce experiences such as inviting friends to shop in real-time.
Shoppers have come to expect personalization in both their online and offline shopping journeys. Personalization is associated with being made to feel special and valued by a brand, rather than one of the hundreds of customers who shop with them each day. Consumers increasingly expect businesses to treat them as unique shoppers and understand their needs and preferences.
This makes personalized communications and content key considerations for both first-time and repeat buyers. For first-time customers, these actions most influence the decision to purchase:
The failure to personalize, or poor efforts at personalization, have a heavy cost. When customers are shown or recommended content or products that aren’t relevant, this adds friction to the shopping journey. Companies risk alienating customers and missing out on revenue generation. Research from McKinsey found that companies who excel at personalization generate 40% more revenue on average from these activities than competitors who do not.
In the face of heightened expectations for personalization, regulations have made data tracking more difficult. Brands use third-party cookies to track website visitors, improve the user experience, and collect data that helps them target ads to the right audiences. Most browser providers have already phased out the use of third-party cookies, with Google the last player to limit use by the end of 2023
With these restrictions arguably making online targeted advertising less effective, brands and retailers are seeking new ways of collecting different kinds of customer data. Customer outreach where consumers voluntarily give information and brand-wide community-building are taking on new a level of importance. This requires brands to proactively connect with customers across multiple channels to meet shoppers in their preferred landscape, whether that be on social media, in-person, or on their e-commerce website.
While trust is still an issue for many consumers, 85% want brands to make use of first-party data when delivering the kind of personalized experiences they now expect. This holds the key to bringing metaverse-like experiences to your customers using data gleaned directly from your customer, often in their own voice.
This savvy use of customer data and technology opens up new opportunities to curate metaverse-like shopping experiences that take customer segmentation and personalization to a higher level. Hyper-personalization is the advanced and real-time customization of promotions, content, and customer experience at an individual level.
Hyper-personalization creates fine-tuned, targeted experiences through data, analytics, AI, and automation. At-scale content creation and AI-driven decision-making capabilities are enabling merchants to respond to customer behavior in real-time. The use of predictive analytics helps marketers to determine what content and messages to serve to which customers.
AI, enabled by first-party data, can combine to predict outcomes like which shoppers are most likely to make a purchase on paid media, for instance, or delve into past purchase history to present relevant product recommendations.
Pay special attention to marketing efforts after the first purchase. Retail technology company Bluecore analyzed aggregate sales data over a two-year period from retailers in several vertical sectors including apparel, beauty, footwear, and luxury goods. Among their findings:
By using first-party data and CRM data to build robust customer profiles, brands can connect and contextualize this information with shopper and product data to make predictions with a laser-sharp focus that builds on customer interest in your brand.
Furthermore, connecting marketing elements like ads, emails, and site advertisements to achieve channel synchronization and bring an even more cohesive, hyper-personalized experience to shoppers.
The metaverse, in all its forms and technologies, has multiplied what’s possible for brands and retailers to deliver immersive, highly customized, and seamless customer experiences. The rapid digital transformation over the past two years has also expanded the range of practical and affordable solutions available to merchants as they adopt metaverse-style technologies.
Personalization and its digital-age counterpart, hyper-personalization, are proven to influence buying behavior across the consumer lifecycle. Brands and merchants that excel at digital customer engagement and personalization report higher revenues and customer retention rates, among other benefits.
Personalization is no longer about targeted online advertising campaigns but about meeting customers in their preferred channels and modes of communication. In light of the phase-out of third-party cookies that limit the ability of marketers to reach and target new customers on paid media channels, brands and retailers are seeking new ways to collect and leverage customer data (of all types) to personalize the customer experience across touchpoints.
From online customer journeys across platforms to offline personalization in-store and beyond, merchants are looking to deeper personalization tools to create hyper-relevant and engaging content, offers, and shopping experiences. When developing their personalization and hyper-personalization strategies, marketers need to consider the overall brand strategy, marketing and customer retention plans, and tech stacks.
Website personalization, content personalization, personalized product recommendations, and replenishment campaigns are among the many types of solutions available today for merchants to incorporate into their strategies. Advanced e-commerce architectures and development approaches such as headless commerce are allowing merchants to leverage customer behavior data to create more immersive and engaging content in real-time.
As the metaverse continues to change and evolve, winning merchants will be those that make the best use of the customer data and information they have in real-time from a range of sources and channels and deliver on meaningful customer engagement.
Enjoyed this extract? Check out the rest of our eBook on how brands and retailers are implementing ‘fragments’ of the metaverse to create hyper-personalized experiences: