Should Walmart or any department store enter the metaverse?

Walmart (WMT) recently filed documents suggesting the retailer may create cryptocurrency and NFTs in addition to researching new brands in December of its desire to enter the metaverse.

The brands suggest the retailer intends to create and sell virtual goods in a new VR online shopping experience. The repositories could also simply be a preventative measure to prevent others from using the brand in a metaverse environment, but either intent begs the question, who actually wants to be in a Walmart metaverse?

Why would anyone visit a Walmart in the Metaverse?

Regardless of economic status, shopping at Walmart or other similar department stores is hardly seen as a pleasant experience that people look forward to. Some may have stronger feelings than others, but either way, most treat Walmart as just a trip to get needed goods at a bargain price. In this way, Walmart and Costco (COST) are excellent stores for consumers to purchase goods at a lower than average price. However, the shopping experience itself is not designed to be enjoyed on a day off for entertainment.

Social media sites and video games create metaverses because people enjoy spending time on these platforms. The benefit of a VR shopping experience at a discount store is very limited to a few, mostly unreasonable things. Nobody needs to analyze the box of cereal or the bag of crisps before buying. They may want to choose a specific tomato or porter when shopping, however, the capital required for a metaverse VR experience where consumers can analyze every piece of meat or vegetable seems completely disproportionate to both the cost of its construction and the number of people ready. to actually use this function.

Products to benefit from virtual reality?

Every vegetable or piece of meat would have to be scanned and tracked throughout the store in addition to creating an expensive VR platform for customers to use. Are there really enough people begging to shop online and put on a VR headset to buy all the necessary groceries online? Additionally, there’s likely little overlap between people who know the technology and wealth needed to buy and use a VR setup, and those who do the majority of their shopping at Walmart.

Besides specific foods like vegetables or meat, the only real other type of product that makes sense to buy in the metaverse is clothing. There’s definitely an advantage to being able to try on clothes in virtual reality to see what they fit and look like, if the program can realistically describe what they’ll look like in real life.

However, consumers don’t buy clothes from Walmart for proper fits or fashion because the majority of clothes are for kids or fancy shirts featuring 80s rock bands. That means it will last. a year until it doesn’t fit properly or it’s a $5 graphic shirt that people know won’t be the best fit and usually already know how it works The sizes. Again, there may be some value for customers to view clothing in VR before purchasing, but that’s likely very little given Walmart’s shopper use cases.

Which retailers might have a desirable metaverse?

Walmart and discount stores might not have the most useful metaverses, but that doesn’t mean other chains couldn’t attract customers. While a clothing simulator for Walmart might not be the best investment, other clothing retailers could benefit significantly. Clothing manufacturers such as Nike (NKE), Lululemon (LULU), Adidas (ADDYY) or even Gap (GPS) can give consumers greater confidence in products when shopping online.

Online clothing retailing has undoubtedly grown dramatically over the past decade, but still has its issues compared to retail stores. Knowing which size to choose always feels like a guessing game most of the time due to the fact that brands fit differently in the same size or products fit differently in the same brand. The ability for customers to try on clothes in a virtual world before purchasing them could go a long way in mitigating this problem.

Also, with the rise of streetwear and the nature of clothing in general, a metaverse where people can show off the products they own from respective companies could actually be another social media-like platform where individuals create an online wallet. More expensive or exclusive products in particular can be a status symbol for users. Whether or not it’s actually good for mental health and society is debatable (spoiler: it’s not good for mental stability) but there’s almost unquestionably greater demand for a Nike metaverse than for a Walmart.

Wrap

Walmart is preparing for the future, like any company wishing to maintain or increase its market share in the future. However, sometimes certain technologies just don’t fit a particular business model. Maybe far from it, there could be a practical use of VR technology and a Walmart shopping experience, but that doesn’t seem to make much sense right now.

However, other retailers could benefit from creating a metaverse for users, especially those with big, well-known brands. Many luxury goods producers like Louis Vutton or Gucci would certainly seek to purchase items digitally to be part of the exclusive class that can afford such items. Meanwhile, companies such as Nike or Adidas are taking advantage of those who just want to show off their collection of unique Jordans or Yeezys.