Retail chain Forever 21 entered the metaverse in December when it opened a virtual store on Roblox, a digital gaming platform popular with children. Users come into the multilevel digital store on a carpet with paparazzi snapping photos and, once inside, their avatars can buy furniture, clothes and accessories and try on makeup.
But Jamie Salter, founder, chairman and CEO of New York-based Authentic Brands, which owns Forever 21, thinks it's too early to say what role the metaverse will have for core retail businesses. Salter said brick-and-mortar locations still have a future even if the metaverse, a 3D version of the internet where people interact in an environment resembling the physical world, proves to be a vital revenue generator in selling goods and services.
"The experience of physical retail is really, really important," Salter said during a panel at the Milken Institute Global Conference this month in Los Angeles. Now the discussion of retail in the metaverse is continuing this week at the ICSC Las Vegas conference, where shopping center owners are comparing notes on the future of the industry.
Brandon Isner, Americas head of retail thought leadership at CBRE, said Monday at ICSC Las Vegas that while there's an increased level of business activity in the metaverse now, much remains to be learned from how the platform can interact with commercial real estate. That's in part because the metaverse itself isn't fully formed yet.
"Some feel like that the true metaverse doesn't actually exist yet because it remains a fragmented place," he said.
Proponents argue the metaverse is "e-commerce 2.0" and that virtual malls will allow users to try on products, interact with friends and connect with sellers while digital shopping, according to a March report from Citi GPS. That may mean big business for retailers, as the metaverse may have up to 5 billion users by 2030 and have a total addressable market of $8 trillion to $13 trillion, according to the report.
Not everyone's buying into the metaverse.
Garrick Brown, director of advisory services and business development for Walnut Creek, California-based Lockehouse Retail Group, said metaverse technology such as virtual reality headsets is years away from becoming more accessible to everyday users.
"Retailers have to pay attention to what happens there, but it's in such [an] early stage," said Brown, who had been talking about the issue even before the ICSC Las Vegas this week.
Some physical retail landlords don't think the metaverse is a fad, but neither do they believe it poses a threat to brick-and-mortar business. Sandy Sigal, president and CEO of Los Angeles-based landlord NewMark Merrill Cos., said at least 20 of the company's tenants are thinking about their role in the metaverse. Sigal, who like Brown has been discussing the issue for a while, said the metaverse will have its fits and starts as it grows but that it's a valid world that will have a marketplace.
"I think physical real estate will have a counterpart in the metaverse, and eventually they may be competitive, but in the long run I would bet on them being complementary," Sigal said.