Walmart (WMT) recently made filings that that suggest the retailer could create a cryptocurrency and NFTs in addition to seeking new trademarks in December of its desire to enter the metaverse.
The trademarks suggest the retailer intends to create and sell virtual goods in a new online VR shopping experience. The filings could also just be a preventative measure to stop others from using the brand in a metaverse environment, but either intention raises 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 an enjoyable 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 necessary goods at a great price. In that way Walmart and Costco (COST) are great stores for consumers to buy goods at a below average price. However, the shopping experience itself isn’t designed to be something enjoyed on a day off for entertainment.
Social media sites and video games are creating metaverses because people enjoy spending time on those platforms. The advantage of a virtual reality shopping experience at a discount store is very limited to just a few, mostly unreasonable, things. No one needs to analyze the cereal box or bag of chips before buying. They may want to choose a specific tomato or porterhouse when shopping, however, the capital necessary for some VR metaverse experience where consumers can analyze each piece of meat or vegetable seems completely disproportionate to both the cost to build it, and the number of people ready to actually use that function.
Any Products to Benefit from VR?
Every single vegetable or piece meat would have to be scanned and tracked throughout the store in addition to building an expensive VR platform for customers to use. Are there really enough people out there begging to shop online and put on a VR headset to buy every grocery necessary online? Additionally, there’s likely little overlap between the people with the tech savvy and wealth needed to buy and use a VR setup, and those that do the majority of their shopping at Walmart.
Besides specific foods like vegetables or meats the only real other type of product that makes sense to shop for in the metaverse are clothes. There’s certainly some benefit to being able to try clothes on in VR to see how they fit and look, if the program can realistically depict how it will look in real life.
However, consumers aren’t buying clothes at Walmart for proper fits or fashion as the majority of clothes are for kids or novelty shirts representing 80s rock bands. Meaning it will either last a year until not fitting properly anymore or is a graphic shirt for $5 that people know isn’t going to be the best fit and usually already know how the sizes work. Again there may be some value for customers to see clothes in VR before purchasing but likely is very little given the use-cases of Walmart shoppers.
What Retailers Could Have a Desirable Metaverse?
Walmart and discount stores may not stand to have the most useful metaverses but that doesn’t mean other chains couldn’t entice customers. While a clothing simulator for Walmart might not be the best investment, other apparel retailers could stand to benefit significantly from one. Apparel manufacturers such as Nike (NKE), Lululemon (LULU), Adidas (ADDYY), or even the Gap (GPS) can give consumers more confidence in products when purchasing online.
Online retailing for clothing has no doubt grown dramatically over the past ten plus years but still has its problems compared to going to retail stores. Knowing what size to choose still feels like a guessing game much of the time due to brands fitting differently at the same size or products fitting differently across the same brand. Customers being able to try out clothes in a virtual world before purchasing could go a long way to limiting this problem.
Additionally, with the rise of streetwear and the nature of clothing in general, a metaverse where people can show off what products they own from respective companies could actually make for another social-media type platform where individuals build an online portfolio. More expensive or exclusive products in particular can be a status symbol for users. Whether or not that’s actually good for mental health and society is questionable (spoiler: it's not good for mental stability) but there’s almost unquestionably greater demand for a Nike metaverse than a Walmart one.
Wrapping Up
Walmart is preparing for the future as should any company hoping to sustain or grow market share going forward. However, sometimes certain technologies just don’t fit in with a particular business model. Maybe far down the line there could be a practical use of VR technology and a Walmart shopping experience, but it does not appear to make much sense currently.
However, other retailers could stand to benefit from building a metaverse for users, especially those with big, well-known brands. Luxury goods producers like Louis Vutton or Gucci certainly would have many looking to purchase items digitally to be in the exclusive class that can afford such items. Meanwhile, companies such as Nike or Adidas stand to benefit from those who just want to show off their collection of unique Jordans or Yeezys.
