You’re sitting on your sofa, wearing virtual reality goggles and waving your way through a shopping trip. Your digital avatar, akin to those of human characters in the blockbuster movie “Avatar,” is walking from store to store in an online VR business district, browsing virtual representations of real merchandise. After entering a clothing store, your avatar tries on apparel likely to fit because you’ve done a full body scan at home and uploaded that data. With each fitting, your avatar walks around (mugging and preening, if you like), showing the flesh-and-blood you how you’d look in the outfits.
This isn’t a scene from James Cameron’s next movie. Rather, it’s a likely retailing scenario over the next decade, as much of the required technology—and its commercialization—already exists or is well along the path to viability.
Already, VR and/or augmented reality (in which virtual elements are introduced into images of real environments) retailing efforts include in-store virtual tours of rooms full of branded furniture at major department stores. After a pilot program, Macy’s has announced plans to offer this wow feature at some 90 stores by early this year. And some Nordstrom’s locations now have VR-assisted apparel shops.
Prospects for online VR shopping might seem far more sanguine for big retailers than for little guys, but this presumptive dominance is now threatened by blockchain technology, which is expected to go a long way toward leveling the playing field and spurring global competition from start-ups. Blockchain—and the cryptocurrency payments it enables—will allow small ventures to efficiently take products directly to consumers and contain costs. Also dinging the big boys would be a diminished emphasis on brand names resulting from the sheer volume of unbranded products available through the democratizing market effects of blockchain.
Cryptocurrency, which uses blockchain (in most cases) as its transmission vehicles, is only natural for the anticipated robust global VR retail environment because it’s borderless.
Developers are working on applications to meld blockchain tech with VR. These solutions will be huge because they’ll enable small businesses from different cultures, who may have little capital, to take their goods global on VR platforms built on blockchain’s decentralized ledger. Blockchain’s perfect audit trail is wholly accountable through the verifiability of secure smart contracts, lending credibility to retailers and building trust with consumers.
Blockchain is being positioned as an integral part of emerging online VR shopping platforms or shopping districts currently under construction. An example is Decentraland, whose name embodies the founding blockchain principle of enabling decentralized authority to disintermediate central authorities deemed by blockchain proponents to have too much power. Unlike malls, accessible only to corporate entities that can pay high rents but also have a strong web presence, these platforms will be highly accessible to non-bricks-and-mortar players who lack substantial capital.
To some extent, these dynamics already exist in non-VR online shopping. But, as the use of VR is expected to be an extremely powerful retailing tool and, as blockchain will enable widespread participation, these forces will be more pronounced. Also helping smaller merchants more will be the lower costs enabled by crypto-currency. A central tenet of crypto-currency is to disintermediate banks (a central authority), as it requires no banks for transactions—unlike credit cards that charge transaction fees and create waiting periods for merchants to receive revenue.
The ultimate marriage of VR and blockchain/crypto has significant implications for:
• Retailing stocks. Depending on how they play their cards regarding the coming VR/blockchain shopping environment, major retailers could flourish or flounder.