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How the Metaverse May Reshape Retail

1 min read · 84 views Bong-Geun Choi Jan 02, 2023

The metaverse has the potential to blur the divide between the physical and digital worlds and change the way that business is conducted.  One industry that may be particularly affected by metaverse technology is retail.  The National Retail Federation, the world’s largest retail trade association, held its Innovation Lab, where more than 50 visionary startups across the retail industry showcased their technology, which included the metaverse.[1]  What exciting features were highlighted from this event?

 

Virtual Stores and Showrooms

Through metaverse technologies such as augmented reality (AR) and virtual reality (VR) retail companies may create virtual stores and showrooms in the metaverse. 

 

A digital twin of an existing retail outlet or a unique showroom representation can be created, allowing customers to virtually browse a company’s store.  Product information may be displayed by clicking on items in the stores Additionally, product demonstrations may be included.  Finally, consumers can purchase these items.

 

Virtual stores and showrooms are not limited to fashion and apparel but can include automobile showrooms, home décor, or business-to-business (B2B) items.

 

Picture Yourself

Metaverse technologies may allow consumers to virtually try on goods or visualize them in their surroundings.  For example, technology exists to create a digital representation of an individual’s body so that they can try on clothes and see how they will fit. 

 

Another example of this scanning technology is that it permits consumers to see how furniture may fit and look in their homes.  Consumers may configure a retailer’s products to their preferences and project 3D products right next to them.  Or they can see the manufacturer’s products in their home through virtual reality.

 

Help for Retailers

Technology exists to allow companies to convert 2D images of real-world objects into realistic 3D digital assets.  The digital assets may be used in AR, VR, gaming, or even as a non-fungible token.[2]  The technology aims to make the creation of 3D assets more time-efficient.

 

Testing Before Implementation

Digital twin technology is currently being used in manufacturing.[3]  Now, it may be used in retail.  The technology may allow product manufacturers, retailers, and researchers to design, test, and implement retail solutions.  For example, the technology may be used to analyze customer flow on the sales floor.

 

Technology Transforming Retail

As individuals spend more time online, retailers may need to rethink how they connect with consumers.  Metaverse technology may provide such a solution.  Companies that can adopt and incorporate metaverse technology into their sales process may be poised to better whether changing consumer preferences and behavior.

 

How may individuals gain exposure to metaverse-related companies?

 

The Fount Metaverse ETF (MTVR)

The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index.  The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology.

 

MTVR may be an attractive vehicle to gain exposure to metaverse-related companies.

 


 


[1] How the Metaverse is Set to Shake Up Retail, National Retail Federation, 11/7/22

[2] For more information on NFTs, please see our blog “Will-NFTs-Promote-Growth-of-the-Metaverse

[3] For more information on digital twin technology, please see our blog “Can-the-Metaverse-Help-Solve-Supply-Chain-Problems


 

Bong-Geun Choi

Chief Economist

bchoi@fountinvestment.com

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Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 855-425-7426 or visit our website at www.fountetfs.com. Read the prospectus or summary prospectus carefully before investing.

Exchange Traded Concepts, LLC. serves as the investment advisor to the Funds. The Funds are distributed by SEI Investments Distribution Co., (SIDCO) 1 Freedom Valley Drive, Oaks, PA 19456. SIDCO is not affiliated with Exchange Traded Concepts, LLC. or Fount Investment Co. Ltd.

Risk Disclosure:

 

Investing involves risk, including possible loss of principal. There is no guarantee the Funds will achieve their stated objectives. In addition to the normal risks associated with investing, international investments may involve the risk of capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles, or social, economic, or political instability in other nations. Emerging markets involve heightened risks related to the same factors, as well as increased volatility and lower trading volume. 

 

The Funds’ concentration in an industry or sector can increase the impact of, and potential losses associated with, the risks from investing in those industries/sectors. For MTVR, the Fund may be concentrated in the entertainment and interactive media & services industries. The entertainment industry is highly competitive and relies on consumer spending and the availability of disposable income for success, which may cause the prices of the securities of companies to fluctuate widely. The prices of the securities of companies in the interactive media & services industry are closely tied to the overall economy's performance. Changes in general economic growth, consumer confidence, and consumer spending may affect them. MTVR may also be subject to the specific risks associated with metaverse companies. These risks include but are not limited to small or limited markets, changes in business cycles, world economic growth, technological progress, rapid obsolescence, and government regulation. Smaller, start-up companies tend to be more volatile than securities of companies that do not rely heavily on technology. Metaverse Companies may rely on a combination of patents, copyrights, trademarks, and trade secret laws to establish and protect their proprietary rights. There can be no assurance that these steps will be adequate to prevent the misappropriation of their technology or that competitors will not develop technologies that are equivalent or superior to such companies’ technology.

 

For SUBS, the Fund may be concentrated in the software industry. Technological changes, pricing, retaining skilled employees, changes in demand, research & development, and product obsolescence can affect the profitability of software companies causing fluctuations in the market price of company securities. 

 

Both Funds are subject to communication services sector risk, which can involve the same risks as being concentrated in the software industry. Network security breaches, potential proprietary or consumer information theft, or service disruption can negatively affect companies’ stock prices.

 

The Funds are non-diversified. The Funds are new and have limited operating histories for investors to evaluate. New and smaller funds may not attract sufficient assets to achieve investment and trading efficiencies. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility. 

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MTVR · SUBS