Immersive experiences – the new frontier of commerce

We all know the transience of hype and how it can sometimes lead organizations to take the wrong turn or over-commit to new technology that doesn’t ultimately pan out. But for all the futuristic ideas surrounding these buzzwords, the tech is already here, and it’s exponentially developing into hitherto unseen horizons – think virtual smelling (more on that later).

The technology to simulate anything and everything a person can imagine in real life is now emerging. And the potential applications are inexhaustible. But Innovation is a means, not an end. The challenge is relevancy: how can this be applied now to benefit organizations?

In this blog, we’ll see how immersive experiences and NFTs can be utilized in commerce. Gently – but boldly – transition companies to higher consumer engagement.

Esteemed colleagues and expert speakers at the NRF 2023 have drawn an electrifying picture of what the future holds. Revealing some of the secrets behind these technologies and how they can be implemented to drive commerce into an exciting future.

What are immersive experiences?

Immersive experiences place the user in an environment that diverges from daily life. The applications are stunning. They could be anything from the more distinct type, like VR, to exploring the map of an otherworldly video game, or even something like an exclusive event at a remote location in real life.

The term itself refers to the psychological involvement of the experience rather than a specific set of external catalysts. (Immersive experience does not equal wearing virtual reality headsets.)

This is a broad definition, but it is essential to understanding the scope of what immersive can do – and the crux lies in the psychological aspect, which is what the consumer wants and values. As has been known for a while, consumers – the millennial demographic and the new Gen A even more so – are showing more interest in experiences rather than things, which provides a solid foundation for building a new strategy around product development and especially CX.

Where are we now with the tech? Some startups have managed to simulate touch and smell in a virtual environment. This is the latest and most encompassing simulation technology for the metaverse and virtual experiences to be released later this year. This opens up a new world of marketing opportunities in retail to extend e-commerce further than it’s ever reached.

NTFs – below the tip of the iceberg

We are in the age of Web 3.0, the new era of the internet with evolving decentralized blockchain technologies, including cryptocurrencies and non-fungible tokens, or NFTs. The popularity of NFTs surged and reached media outlets with stories of people paying outrageous amounts of money to own unique artwork – perhaps the first thought that comes to people’s minds when hearing the term. But what are they, really?

Blockchain technology enables a “transparent” and non-reproducible chain of blocks of information, with encryption linking each one to the previous with a timestamp and transaction data.

This distributed ledger, as opposed to a centralized database, removes the risk factor of a single point of failure. If part of the system suffers damage, data still exists in an identical form in another part of the system. This solid method of guaranteeing that the blocks are non-fungible and cannot be replaced/tampered with is the basis of cryptocurrencies and NFTs.

Once someone is recorded as being the owner of an NFT, this ownership is authenticated and certified by the blockchain. This authenticity can lend itself to the incorporation of exclusivity and uniqueness in products and rewards from brands.

How NFTs can be used? Exclusivity and a demo

Consumers like exclusivity, especially with luxury items and experiences. For example, there is an exclusive dining club in New York that is the first one of its kind – you can only enter it if you own an NFT for it (and further applications could be made to have tiered experiences within the restaurant, like additional NFTs allowing patrons to have premium dining experiences). This sort of use of NFTs can elevate luxury products, experiences, and rewards to new heights that surpass the mass market – a digital environment, tied to real life, that enables people to have the most exclusive possible access to what companies have to offer.

To showcase how this can be used, Capgemini has created a demo: someone buys a luxury bag. The journey for the customer starts with a QR code attached to the bag and when they scan this code, their ownership of the bag gets registered on the blockchain. Then, the customer receives an email inviting them to an exclusive event, like Fashion Week. This bag’s digital twin is now associated with an NFT. The customer can attend the event while others can’t – creating exclusivity – and they become a part of that community. This is the power of combining online-offline experiences.

Other online-offline applications that already exist include:

• Real-world shoes that, in the digital world, enable you to fly in a game
• A real-world car that can go faster in a racing game
• A ticket is being minted as an NFT to attend a conference

The same principle can be applied in countless ways.

Consumer naysayers versus the new generation of commerce

Sixty-five per cent of consumers have said they would prefer to have real-life, physical experiences than immersive ones, and many people consider the metaverse to be a bad thing for society. But many of us remember a time when the same was said about Web 2.0, what we’ve had for nearly two decades now – the internet as it exists today. Socializing as a kid would involve going to the mall or maybe chatting online with friends. Kids today instead might immerse themselves collectively in Minecraft or Roblox, entire digital worlds where they can create anything they want.

Like the reticence many in the industry had about the idea of online commerce back in the infancy of Web 2.0, it is expected that the same would be thought about where we are now, but the applications of Web 3.0 in the new age of digital commerce are already here. The younger generations especially are primed for the new experiences that this technology has to offer.

Moreover, according to the newest 2023 Capgemini Research Institute report, 58% of consumers – of several thousand across 11 countries and a thousand organizations – believe that immersive experiences will influence their next purchase. 77% believe that immersive experiences will influence how they engage with a brand after purchasing, using, and servicing their product. And in customer service, 77% also believed that immersive experiences will create loyalty. The key will be designing an omnichannel strategy with outstanding CX, based on robust research into customers’ expectations and use.

They don’t need to know

This sounds insidious, but the idea is that the consumer doesn’t need to be familiar with or understand the technology itself to find value in it. This is a simple concept that is implicit in the marketing of most products – most people don’t expect to know about the chips and processors in their electronics, for example. A mere 20% of US online adults said they were familiar with the metaverse, and only 20% have heard of NFTs but 31% do not understand what they are (including Gen Z). But the psychological aspect of immersive experiences is the actual intrinsic value that the consumer will find through the exclusivity of the event or experience tied to the product.

The novelty of Web 3.0 technologies might tempt companies to label their immersive experiences with the associated buzzwords. Companies that use NFTs and immersive experiences in their products and services do not necessarily need to have the term “NFT” attached to anything. In essence, the idea is to combine the technology with good CX research to produce the best experiences possible for the consumer and market them in the correct way for a frictionless experience. Nothing is gained by alienating customers with unnecessary jargon.

What are the limitations?

The hardware is not yet as fast as the software. We now have 5G, are exploring 6G, have WiFi 6 on the horizon, and are beginning to explore 7G, but these are not quite where they need to be yet. The technology and infrastructure are there and improving, but the current state of the hardware is a limiting factor.

For example, virtual try-on – the ability for consumers to virtually try on products using their devices via augmented reality and layering visuals – is still not quite right and doesn’t sufficiently simulate the look of an item of clothing or shoes on the person. But it will be soon. (In the case of some clothing, such as sunglasses, it’s already there.)

The hardware limitations can be a thorn in our side, preventing us from moving faster, but the existing technology has reached the stage that, if used in the right way, it can launch organizations further into the new wave of commerce.

How can I get in with the new frontier of commerce?

Immersive experiences are undoubtedly the new frontier and future of commerce. At Capgemini, we urge clients to start their journey toward these new vistas – and it’s better to begin now than later. With so much on the horizon, you need a good place to start and to select the right tools and strategies for your organization.

To see what else happened at NRF 2023, check out our event page. You can also get in touch with our team to find out more about immersive experiences and book a demo.

If you’re interested in discovering what Capgemini can do to kickstart your journey into the future, visit our Retail and Consumer Products pages.