Article Abstract
The metaverse offers unique opportunities to retail Phygital Products (PPs)—combined physical-digital offerings whose components are linked together using NFTs. Despite their rising popularity and operational efficiencies, PPs pose a number of distribution challenges likely to influence customer valuations of these products. This research investigates how different retail strategies (metaverse-first vs. physical store-first) influence willingness to pay for PPs. Five experimental studies, including one conducted in a simulated metaverse store, show that metaverse-first retail strategies decrease willingness to pay (Studies 1A-1C) due to decreased investment value (Study 2). This valuation penalty can be mitigated by manipulating arousal through in-store atmospherics. Specifically, increasing music tempo reverses the negative effect of metaverse-first retail strategies on investment value and willingness to pay (Study 3). Our findings inform actionable strategies on how to retail PPs in the metaverse to maximize distribution reach while reducing valuation penalties.
Journal of Retailing, January 2025
About the researcher
Greg Nyilasy, PhD is Associate Professor at Department of Management and Marketing at the FBE, University of Melbourne. His research explores the intersection of brands, marketing and entrepreneurship/innovation. Recent projects target the consumer adoption of digital technologies (Artificial Intelligence, autonomous products, VR/AR) and entrepreneurial resource acquisition and new venture legitimacy. Outside of academia, Greg has executive and consulting experience on three continents in strategy, marketing and innovation. He has helped a wide variety of blue chip corporates and SMEs in consumer packaged goods, finance, healthcare, media, retail, technology and travel. He is Non-executive Director at State Schools' Relief and the Victorian Music Teachers' Association.