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Portfolio > Alternative Investments

Gen Z Indifferent to Metaverse Retail, Study Suggests

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What You Need to Know

  • Gen Z's apparent lack of interest should be particularly worrisome to retailers making multimillion-dollar investments in their metaverse presence.
  • Gen Z is interested in “hybrid in-store experiences that use mixed reality technologies to incorporate a virtual element to shopping.”
  • Gen Z, millennials and Gen X all cite lack of understanding of the metaverse as their main reason for not participating.

Along with tech giants such as Microsoft, Meta, Adobe, Qualcomm, Nvidia and Khronos, the broad group that recently announced a metaverse standards consortium also included Ikea, Wayfair and Alibaba — major retail and e-commerce players.

As corporate leaders work to develop the emerging metaverse — a concept envisioned as an immersive blending of the physical and online worlds that will revolutionize work, commerce, entertainment and other aspects of human life — it’s become clear that consumer brands and retailers are expected to play a significant role.

A new survey, however, suggests that the digital native teens and 20-somethings who constitute Generation Z don’t particularly care whether brands develop a presence in the metaverse, although they would be interested in “hybrid in-store experiences that use mixed reality technologies to incorporate a virtual element to shopping.”

The B2B retail tech firm Zipline in May surveyed 600 people ages 13 to 50 to understand attitudes toward the “retail metaverse” across generations.

“Companies are focusing a great deal of time, money and resources on expanding their presence in the metaverse, but for the average consumer, it can be hard to understand the value in these investments. For most, the metaverse is an abstract concept and one that many struggle to grasp,” Zipline CEO and co-founder Melissa Wong noted in a June 23 blog post, when her company released the survey results.

“Despite its obscurity, the metaverse has quickly become one of the tech industry’s most promising niches. A virtual-reality space in which individuals can interact with others, shop/access NFTs and exclusive products, or participate in gaming activities, it was recognized by Gartner as one of 2022’s top five emerging trends and technologies,” she wrote.

While companies are making significant investments in the metaverse, however, retail’s “biggest spenders,” Gen Z, are indifferent to the science fiction-like idea, according to Wong. This tech-savvy generation, which includes the youngest adults and others nearing adulthood, “has roughly $360 billion to spend on retail, but they can be particular about where and how they spend their money,” she said.

Zipline’s survey found that 80% of Gen Z is familiar with the metaverse and just over half have participated in its early versions through activities like gaming and buying nonfungible tokens, or NFTs. Slightly more members in the next youngest generation, the millennials, are familiar with the metaverse but far fewer, 37%, participate in it, according to Zipline.

“Yet, despite Gen Z’s acquaintance with metaverse, a key takeaway may be their disinterest. The survey found that 85% of Gen Z respondents reported feeling indifferent about brands developing a presence in the metaverse — a potentially worrisome stat for retailers diving head-first with multimillion-dollar investments,”  Wong said.

More than 80% of survey participants who had engaged with the metaverse cited gaming as their primary reason for doing so, while more than 40% reported they’d used it for shopping, Zipline reported.

The survey suggests the primary challenge for retailers will be overcoming a lack of understanding of the metaverse, which Gen Z (43%), millennials (43%), and Gen X (53%) cite as their main reason for not participating, Wong wrote. Financial obstacles and lack of time ranked second and third, respectively, she said.

Retailers might be able to overcome this “barrier to entry” through “hybrid in-store mixed reality experiences that leverage augmented reality and virtual reality technologies for online shopping and engaging with friends — both virtually and in-person,” Zipline said, noting that large majorities of Gen Z, millennial and Gen X members expressed interest in hybrid experiences. These engagements could serve as an onramp for participating in the metaverse economy, according to the firm. 

Wong noted that the retailer Lululemon has outfitted certain stores with an augmented-reality mirror that allows customers to connect with friends and watch live classes.

Retailers that have already invested in the metaverse and aren’t seeing a return yet can find ways to bring customers along, and those that haven’t invested have time to “lay the groundwork before moving forward,” Wong wrote.

Given that gaming attracted many consumers to the metaverse, Zipline suggested retail brands interested in a metaverse presence consider partnering with a gaming platform both to provide an entertaining experience and connect with the gaming audience.

Gap and Pacsun have joined with Roblox to attract younger audiences through Gap’s “Club Roblox Boutique” and Pacsun’s “PACWORLD,” which generate a metaverse version of physical stores through a gamified digital experience, Zipline noted.

Wong also suggested that retailers involved with the metaverse make sure employees understand the strategy and can explain it to customers; find ways to reward early adopters; and consider how the metaverse can extend and offer something beyond what’s available in the physical store, perhaps through virtual reality dressing rooms.

Analysts have made varying forecasts for the metaverse’s future, with Citi predicting the addressable market could reach $13 trillion with up to 5 billion users by 2030. McKinsey & Co. reported recently that corporations, private equity and venture capital firms invested more than $120 billion in the metaverse so far this year and that executives expect the new environment to generate more than 15% of corporate revenue in five years. recently listed what it considered the 12 top consumer brands selling digital products in the metaverse: Nike, Zara, Gucci, Stella Artois, Adidas, Atari, Burberry, Forever 21, Vans, Ralph Lauren, Tommy Hilfiger and Balenciaga.


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