Josh Jaffe (an interactive ad guru) just opened an agency simultaneously in the real world and Second Life. So now that virtual world even has its own ad agency to help virtual retailers and other businesses sell.
The virtual world is hardly new, back in the mid 90's there were lots of virtual world projects, and some of you may remember VRML, a Web standard for creating such environments. These in turn arose from MUDs and MOOs and other text-based virtual worlds, and the board game Dungeons & Dragons before that.
What's different is the much greater level of internet use now, the growing ubiquity of always-on, broadband connections to it, and most importantly, the massive amounts of computing power and bandwidth available to run such worlds at a relatively low cost. Second Life and the parallel universes that ultimately follow it are just that, universes, not places. They can expand infinitely, and if you don't like how commercial the "city" has gotten, you can build yourself a commune and live out in the wilderness. The frontier never ends.
That fact changes the game, because it makes it possible for all kinds of people to find a use for this virtual world. If you haven't read Neuromancer or other William Gibson novels and you find this fascinating, run out and get the book.
So what does this all mean for retail? If you thought in hindsight that brick and mortar retailers were late to the Internet game, and allowed the Amazons of the world to muscle in on their revenues, then you should be equally concerned that all kinds of retailers take virtual reality seriously. It's not just another web site; it's a different culture, by design.