Saturday, June 10, 2023

BigTech creates an ambitious retail roadmap to dominate Metaverse ⭐


BigTech companies have created an ambitious and highly advanced retail roadmap that is set to dominate the Metaverse. How and why?

Big tech companies have maintained their retail interests in the last few years and are now preparing to dominate the metaverse along with the business-as-usual strategy of land grabs in the retail eCommerce space. Powered by big data these companies have profound insights into consumer behaviour and preferences and can now buy trends years in advance and create some of the most efficient and resilient global supply chains using machine learning.  The rise of metaverse tech — from 3D content to augmented reality to NFTs — will create a more immersive and seamless commerce experience and big tech companies are well-positioned to lead in the integration of these tools.

Social Commerce to grow to US$1.2 trillion

One of the critical drivers of Big-Tech’s retail strategy is explosive growth in the eCommerce business. E-commerce adoption continues to grow, and Consumers are spending more time engaged with technology. But competition for consumers’ attention has intensified, particularly online, where the average consumer spends more than 13 hours a day. The concept of “online shopping” is expanding to new platforms. For instance, Accenture estimates that sales via social commerce, which includes social media posts, live streaming, group buying, and gamification, will grow by a CAGR of 26% through 2025, to reach $1.2 trillion. Big tech companies’ presence across consumer engagement platforms, from social to chat, positions them well to take advantage.

Adding Social Commerce muscle

Meta’s investments in social commerce are adding new tech tools to its arsenal and extending its reach globally. In 2019, the company bought packaged, a live shoppable video company. Meta then launched livestream shopping on its platform as well as on Instagram in 2020. Meanwhile, Meta has invested twice in the India-based social commerce platform Meesho in 2019 and 2021. Meesho connects suppliers with resellers and then enables the sellers to run their businesses on social media platforms like Facebook.

Amazon meanwhile launched a new investment arm, called the Amazon Industrial Innovation Fund (AIIF), in April 2021. The $1 billion fund focuses on innovation in fulfilment, logistics, and the supply chain. The program kicked off with investments in 5 warehouse tech companies, all of which automate parts of the warehouse. Of the cohort, 4 make robots (Agility Robotics, BionicHIVE, Mantis Robotics, Modjoul), while another uses computer vision and AI to automate inventory management and make it more accurate (Vimaan Robotics).

Google is investing and building new partnerships to support the growth and digitization of small retailers in emerging markets. In early 2020, the company announced it would partner with the digital payments company Flutterwave to train 5,000 merchants in Nigeria via training sessions and digital support teams. The tech giant is also increasingly integrating its My Business tool into local platforms in these markets. For instance, in April 2021, Cielo, the largest payment processor in Brazil, announced a partnership with Google to open access to My Business. My Business enables small firms to create profiles to make them more searchable across Google.

Growing via the M&A route

Meta, Amazon, and Google’s areas of focus since 2020 have aligned with their investments over the previous five years, including supply chain, geographic expansion, social commerce, and small business support. Since 2020, Amazon has led big tech in retail tech acquisitions (6) and investments (15). Overall, though, the three companies’ pace of acquisition & investment in retail has slowed from 2020-2022 (38 total) versus the 2018-2019 period (51). Since 2020, Meta, Amazon, and Google collectively have acquired or invested in 9 companies in metaverse tech, which amounts to nearly a quarter of all of their retail investment activity.

Big Tech targets shoppers before, during & after they buy

These companies over the last few years have targeted shoppers before, during, and after they purchase. As consumers seek out more relevant and engaging experiences online, big tech companies’ ability to collect consumer data and personalize the experience will make them ongoing competitors to traditional retailers. According to CB Insights, retail tech-as-a-service providers will gain new competition from big tech companies as well. Big tech companies are also elevating themselves as B2B partners. Small businesses especially will increasingly find the right resources and even platforms for their online businesses in big tech companies.

Big tech companies will dominate retail in the metaverse

Meta, Amazon, and Google are investing in tools to build virtual worlds, including 3D modelling companies and VR tech. But as the metaverse’s role in shopping takes shape, the companies’ investments in the tech enabling immersive retail experiences — such as virtual fit tools and 3D content — could prove more immediately impactful as they plug these technologies into their platforms now.

Meta’s retail initiatives signal its intentions to develop itself as full e-commerce and shopping destination via social features like chat commerce and live streaming as well as personalization tech-like targeted recommendations. Its investments in tech for enabling virtual worlds could be a key differentiator for the metaverse retail experiences it will eventually offer.

Amazon on the other hand continues to invest in the areas where it leads the retail industry, including supply chain, logistics, and delivery tech, as well as omnichannel enablement. Its digital retail tech investments are also helping the company deepen its reach in India. Looking ahead, its investments in the tech enabling the metaverse — from virtual goods to 3D models — position it for consumers’ ongoing shift toward virtual worlds.

Meanwhile, Google’s retail initiatives remain focused on its role early in the path to purchase — pushing traffic to its retail partners. The company has broadened its solutions for small and local businesses, with digital shopping support extending its reach in emerging markets. While the company continues to invest in enhanced online content — pointing to the role that next-gen content will play early in the purchase funnel — it is also forming partnerships to integrate more of its tech into the store experience.

Also Read: Are physical stores really dying because of e-commerce?

(Abhijit Roy is a technology explainer and business journalist. He has worked with Strait Times of Singapore, Business Today, Economic Times and The Telegraph. Also worked with PwC, IBM, Wipro, Ericsson.)

(Disclaimer: The views expressed in the article above are those of the author’s and do not necessarily represent or reflect the views of Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.)


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