FROM THE DESK OF DEBORAH WEINSWIG

Four Questions Brands and Retailers Should Ask Themselves About the Metaverse As the metaverse captures greater attention, retail clients and contacts have asked us for further guidance on navigating these virtual worlds. This year, Coresight Research will provide a suite of research reports on the metaverse, from our Playbook of retailer guidance to our Metaverse Latest series, providing our analysis of recent developments. In this week’s note, we discuss four significant questions that brands and retailers should be considering in regard to metaverse adoption. “How significant will the metaverse be?” This is the billion-dollar question. We see a likely trajectory for much wider adoption of the metaverse by consumers, fueled by the very biggest tech firms piling into this space and supported by other supply-side tailwinds such as 5G and AI (artificial intelligence) advances. Although most virtual worlds are accessible through regular devices that consumers already own, improving headset and haptic technology will make it possible for customers to spend hours in a more immersive environment. Offsetting this is the evidence of limited adoption of existing metaverse components that have been available to consumers for several years: Virtual reality has not become the mainstream consumer tool (including for shopping) that it has at times been expected to; and gaming platforms that deploy virtual worlds remain somewhat niche and off the radar to the majority of consumers. Prior and current consumer reticence in these building blocks of the metaverse is clear and suggests some level of resistance that tech firms will need to overcome through marketing and product appeal. “Does it make sense to add metaverse platforms to our current marketing and engagement strategies?” As the metaverse user base grows, its total digital footfall will be higher than in traditional high-traffic areas such as Times Square in New York City so retailers will want to be in these spaces for exposure and marketing. Metaverse billboards and radio will enable brands and retailers to reach more users than would be possible in the real world. There are a variety of major platforms, such as The Sandbox, that provide brands the opportunity to meet early adopters of the metaverse on the platforms. These platforms also offer consumers the opportunity to purchase platform-specific NFTs (nonfungible tokens). “How can we transfer consumers, activities or products from the real world to a metaverse platform?” Retailers should consider using the metaverse to host virtual gatherings and virtual spaces, such as stores, for consumers to visit. The metaverse provides opportunities for brands and retailers to hold exclusive events and experiences with no entry barriers or space limitations. It also allows brands and retailers to begin selling digital products as NFTs, as well as offering experiences that are physically impossible and virtual items that may not exist in the physical world. In addition, companies should take stock of the digital content they already have with the goal of repurposing it in the metaverse. In the landgrab for virtual space, individual platforms will have limited token and land supply, meaning as a particular virtual world gains more users, opportunities to enter will become costlier—so, while the metaverse universe will be infinite, the costs of tapping those opportunities are unlikely to remain flat. “What physical products or content should we link with an NFT?” NFTs allow companies to pair physical products with digital ones, adding layers of exclusivity, which is already being deployed in luxury and fashion—sectors where conspicuous consumption can extend even to virtual worlds. Retailers and brands can create limited-edition products that are linked to NFTs, which can be fractionally owned by consumers who use NFT marketplaces to purchase items with cryptocurrencies such as Ethereum.

• Our forthcoming Playbookon the metaverse and retail will offer retailers operational guidance on integrating the metaverse into their businesses. Keep an eye out for other research reports on coresight.com, too.

US RETAIL AND TECH HEADLINES 

Farmstead Launches in Chicago (February 14) GlobalNewsWire.com

• Online grocer Farmstead has launched in Chicago and its surrounding suburbs, offering free delivery in just one hour. The company offers a mix of fresh produce from local and national brands.
• As part of its Chicago expansion, Farmstead has opened a new warehouse spanning 30,000 square feet in the city’s Franklin Park suburb.

Kohl’s To Add 400 New Sephora Locations This Year (February 15) Company press release

• Department store Kohl’s has announced plans to expand its partnership with French beauty retailer Sephora, adding 400 Sephora at Kohl’s locations in 36 states by the end of 2022, 46 of which will be located in California and 18 in New York City.
• The Sephora at Kohl’s shop-in-shop concept was introduced in 2021. The spaces generally span 2,500 square feet and replicate the appearance and feel of a standalone Sephora.There are currently 200 Sephora at Kohl’s locations.

Walgreens Expands Its Electric Vehicle Charging Network  (February 14) DrugstoreNews.com

• Drugstore retailer Walgreens has partnered with Volta, an electric vehicle charging network provider, to install 1,000 direct current (DC) fast-charging stalls at 500 Walgreens locations across the US. Currently, Walgreens operates DC fast-charging stations in 49 stores.
• Volta’s CEO, Scott Mercer, stated “As we expand our DC fast-charging presence across the country, Walgreens is an ideal match for faster forms of Volta charging given the average time a Walgreens shopper typically spends in store. Volta’s intelligent charging network is built around understanding and anticipating consumer behavior.”

Wayfair Appoints New Chief Global Supply Chain Officer (February 15) ChainStoreAge.com

• Home-furnishing retailer Wayfair has appointed Sean Halligan as its Chief Global Supply Officer. He succeeds Allan Lyall, who left the company in January 2022. Halligan will lead Wayfair’s strategic supply chain initiatives as the business continues to expand its delivery and fulfillment center network and its global freight network.
• Before joining Wayfair, Halligan served as Senior Vice President of Supply Chain at healthcare services company Cardinal Health for three years. He has also worked as Vice President of North American Fulfillment, Logistics and Operations at sportswear brand NIKE and spent 18 years at retail giant Target.

WHSmith Debuts in North America at New York LaGuardia Airport  (February 15) AviationPros.com

• UK-based travel retailer WHSmith has opened its first North American retail store, located in the newly built western concourse of LaGuardia Airport’s Terminal B.
• The new store features Amazon’s Just Walk Out technology, providing travelers with a convenient, checkout-free shopping experience. It offers on-the-go snacks, beverages and everyday travel essentials.

EUROPE RETAIL AND TECH HEADLINES

Blissim To Expand Its E-Commerce Business in Europe (February 15) PremiumBeautyNews.com 

• French online cosmetics retailer Blissim is set to expand into new European markets, beginning with Germany in March 2022. To compete in the mature German market, Blissim will offer a personalized beauty box at competitive prices featuring products from major brands, according to the company.
• The company aims to use its experience in Germany to introduce the concept in other European markets, including Belgium, Italy, the Netherlands, Poland and Scandinavia. According to the company’s co-founder and director, Blissim’s turnover has increased from €30.0 million ($34.1 million) to €50.0 million ($56.9 million) after regaining ownership from US-based makeup company Birchbox in January 2020.

Carrefour and Everli Extend Partnership To 10 French Cities (February 15) Company press release

• France-based grocery chain Carrefour has extended its partnership with Everli, an Italian online grocery marketplace, following their successful partnership in several European markets. Carrefour’s products will be available on the Everli platform in 10 French cities.
• Carrefour will offer same-day delivery on up to 25,000 products from over 140 local stores. Everli will offer free delivery and a discount of €40.0 ($45.5) on their first four Carrefour orders over €60.0 ($68.3).

Dm-drogerie markt Introduces Live Shopping Events (February 15) ESMMagazine.com

• Dm-drogerie markt, a Germany-based beauty and healthcare retail chain, has launched a livestream shopping feature on its app, featuring live chats about beauty, health and wellbeing. The inaugural livestream was hosted by entrepreneur and beauty expert Judith Williams on February 11, 2022.
• With the new feature, viewers can engage with guests and presenters in real time during live broadcast, and products featured in the stream can be ordered directly via the company’s app. Dm-drogerie markt will host more livestreams in the coming weeks, with US-based cosmetics brand Maybelline, German baby-care brand Glückskind and childcare service provider Hallohebamme set to feature.

PrettyLittleThing To Introduce Depop-Style Marketplace (February 15) RetailGazette.co.uk

• UK-based fashion retailer PrettyLittleThing is set to launch a Depop-style marketplace, PLT Marketplace, later in 2022 for customers to resell pre-worn apparel from any brand. The initiative is part of the company’s aim to move away from throwaway fashion.
• The PLT Marketplace app will initially be introduced in the UK and then rolled out in the US in the latter half of 2022.

Zeeman Expands Its Secondhand Clothing Collection (February 15) RetailDetail.nl

• Dutch apparel discount chain Zeeman has expanded its collection of secondhand clothing, named “Resale,” to all of its stores in the Netherlands, following a successful trial period in 50 of its 460 stores across the country.
• Zeeman is working with Dutch secondhand chain Het Goed, which operates 30 thrift stores and five textile sorting centers throughout the Netherlands, to help inspect and organize donated clothing. Clothes that meet the quality requirements are then given Resale label. Arnoud van Vliet, Manager of Corporate Social Responsibility and Quality at Zeeman, stated that the company sold 20,601 pieces of secondhand clothing in 2021, saving 15,000 kilograms of carbon dioxide.

ASIA RETAIL AND TECH HEADLINES

Aulerth Raises $1.1 million in Seed Funding (February 15) IndianRetailer.com

• Indian Jewelry company Aulerth has received $1.1 million in seed funding from M Venture Partners, LV Angel Fund, a network of McKinsey partners, designer Tarun Tahiliani and former CEO of Swarovski Professional Taro Nordheider.
• Aulerth offers couture-inspired jewelry with a low mining footprint, using metals recycled from industrial refuse and man-made stones, instead of mined stones.

HARMAY Raises $200 million in Series C and D Funding Rounds (February 14) Retail-Insight-Network.com

• Chinese beauty retailer HARMAY has raised $200 million in Series C and D funding rounds. The Series C round was led by equity firm General Atlantic, while the Series D round was led by venture capital firm QY Capital.
• HARMAY will use the funding to accelerate expansion into new categories and locations, including Guangzhou, Shenzhen and Wuhan. The company also plans to develop a mobile app to strengthen its online presence and brand portfolio.

Mamaearth Acquires BBLUNT from Godrej for $17.7 million (February 14) Business-Standard.com

• India-based Honasa Consumer, parent company of DTC unicorn Mamaearth, has acquired a stake in beauty brand BBLUNT for ₹1.3 billion ($17.7 million), from Indian consumer goods company Godrej Consumer Products Limited. BBLUNT offers luxury hair care, hair color and styling products.
• Honasa acquired a 30% ownership stake in BBLUNT, alongside its product lines and salons. The acquisition will allow BBLUNT to strengthen and scale its business, using Honasa’s DTC and e-commerce capabilities.

Pinduoduo’s Online Grocery Division To Introduce Delivery Pickup Service (February 14) TechNode.com

• China-based e-commerce giant Pinduoduo has announced that its online grocery division, Duo Duo Maicai, will soon provide a delivery and pickup service. Duo Duo Maicai has collaborated with China’s top courier businesses, including China Post, Yunda Express and ZTO Express, to provide the service.
• Duo Duo Maicai was launched in August 2020 and allows consumers to place grocery orders before 11 p.m. to collect after 4 p.m. the next day. Daily orders are delivered to various pickup locations via regional warehouses.

Y.O.U. Receives $40 Million in Funding (February 16) Business-Standard.com

• Indonesia-based beauty company Y.O.U has secured $40 million in Series C funding. The round was led by Hidden Hill Capital and also included ATM Capital, eWTP Arabia Capital, Gaorong Capital, M31 Capital and SIG.
• Y.O.U will use the new funds for store expansion, product research and development,  bolstering its global supply chains, and talent expansion in foreign emerging markets, as well as solidifying its position in the Southeast Asian beauty sector.