So, Apple is discontinuing production of the Vision Pro headset. Meta is also posting losses with its VR headsets. The metaverse is officially dead. Metaverse? Was that even a thing?
Our author, Marilyn Repp, was right in the middle of it: during the peak of the hype, she researched the potential and use cases for retail and e-commerce, spoke with startups and thought leaders from the Web3 scene, and was invited to speak on stages across the country. Now she looks back: what remains of the hype?
Meta-what?
What was the Metaverse again? In October 2021, Facebook announced it would rebrand as Meta. Combined with the Covid pandemic, this triggered a tech hype.
The metaverse describes an immersive, persistent digital world created by merging virtual reality (VR), blockchain technologies, and the internet. According to Matthew Ball, the leading expert on the metaverse, it is an “interoperable 3D world” that connects people, places, and objects in real time to create seamless digital and physical experiences.
Many different technologies were grouped under the label of the metaverse, though none were truly new: blockchain products like NFTs, virtual reality, online gaming, digital twins, and more.
I’ll now explore the core metaverse technologies, their relevance and use cases for retail, and the current status.
Augmented and Virtual Reality
Augmented reality (AR) and virtual reality (VR) have continued at a slow pace. The only significant leap I observed for retail was the QR code, which became mainstream during the pandemic, connecting the physical and digital worlds. There’s huge, especially creative, potential here. AR, which enhances the real world with digital elements, is mostly used in the furniture sector. However, IKEA already had its Place app before the metaverse hype began.
A recent Bitkom survey shows that AR usage increased from 19% to 28%, though this mainly refers to social media filters. Virtual product previews in e-commerce remain very rare at just 4%.
VR currently plays no role in retail. Not only has VR headset adoption failed to take off, but it has also fallen short of even modest expectations. It’s no surprise that Apple is discontinuing production.
Digital Twin
The creation of digital twins was seen as a potential game-changer for returns management. With return rates of up to 75% in online shoe retail, it made sense: customers would scan their foot or body to match their own digital twin with products in online shops. However, it never caught on. Fashion e-commerce has instead focused on using large datasets and AI to generate more accurate recommendations. It’s a solid approach, though not quite as flashy.
3D Stores
My favorite hoax from the start! Walmart already failed in 2017 with a digital replica of its stores. It was simply boring.
If you want to see how metaverse can be done right, look at the newer Walmart project with Roblox. Here, a creative, entertaining world was built in collaboration with content creators. That’s the key: fun, entertainment, and, importantly, community. The creators not only built a virtual Walmart world but also brought their communities onto the platform. That’s how metaverse works.
H&M also experimented with dull 3D replicas of its stores. I remember how, at the start of the metaverse hype, many retailers thought they needed a store in some video game or even bought entirely useless virtual land in The Sandbox.
I always asked myself: why? What value does this bring to the user? If you go digital, use the limitless possibilities! It becomes exciting when there’s an element of entertainment and discovery, like in the Gucci Garden, where users could explore and purchase $4,000 NFT handbags. Whether that’s sensible is up to the market, but people made serious money with such digital goods on NFT marketplaces.
Democratization and Decentralization of the Internet
The promise of blockchain to democratize the internet has not (yet) materialized. I must admit, this was the most exciting aspect of the hype for me. Blockchain allows data to be stored decentrally—no need for a costly and powerful central administrator. Data is stored across many computers simultaneously, reducing the power of data giants. That was the theory.
But the big tech companies still control our digital footprint.
However, I firmly believe blockchain applications will break through in the future. Simply because there will be a generational shift in decision-making positions. Many young people know NFTs from gaming (90% of Gen Z consider themselves gamers), and they’ve grown up with Bitcoin and other coins. They have fewer fears, which lowers the barriers to adopting new blockchain-based solutions compared to older generations.
NFT and Blockchain-based Loyalty Programs
Consumers belong to dozens of loyalty programs, some digital, some still using stamp cards. A real advantage would be managing all memberships in one digital wallet and being able to transfer, gift, or sell points. Blockchain can do this. Two years ago, I thought this was the most promising Web3 application for retail.
However, it never caught on. Most of the startups offering such solutions either no longer exist, went through very tough times, or pivoted to new business models. I learned an important lesson: not everything that makes sense for customers gets implemented by companies. Still, I firmly believe in the technology and the potential for widespread, meaningful blockchain applications in the future.
Employer Branding in the Metaverse
Employer branding in virtual worlds is, to me, the one area that has truly taken root and will remain and grow beyond the hype. Lidl, Kaufland, and Aldi in metaverse spaces—such as online games—are here to stay. The major grocery retailers were barely affected by the recession. They need staff for their many stores and IT departments.
Even Aldi has broken its decades of marketing silence to actively recruit: whether in digital worlds, TikTok campaigns, or with a huge stand at Gamescom. With labor shortages unlikely to improve soon, I see this as the most concrete success of the metaverse hype: employer branding in gaming environments.
If you want, I can also help you format this nicely for publication or presentation. Would you like that?
