By Anupam Narula
The Covid-19 pandemic accelerated the adoption of digital technologies and tech companies have taken this a step further to enhance the user experience, ultimately converging with the concept of the Metaverse- a concept coined by Neal Stephenson in the year 1992. Although the term Metaverse has been around for a while, it has been gaining worldwide popularity in the past year with tech giants such as Facebook and Microsoft announcing Metaverse projects in development.
The mainstream recognition of this new concept of a digital, virtual world is increasing due to its promising possibilities. Some experts are saying that it’s essential to adopt this channel to secure the future in a digitally developed universe. The year 2023 is predicted as the year of the Metaverse gold rush because the assets like cryptocurrencies, stablecoins, and non-fungible tokens (NFTs) are assisting companies and developers in building a transactional foundation to support the metaverse.
Many global players are doing just that, yet some companies are reluctant to enter the metaverse because of everything being in the cloud and the poor reputation of cryptocurrencies which are often intertwined with the metaverse. As the metaverse explodes into a multi-trillion-dollar opportunity, innovators and early adopters will be the ones to reap the benefits. Most companies are interested to know how to make the metaverse work for them and to get the most out of the metaverse opportunity.
The answers to the following questions will help marketers and their organizations to take decisions on how to enter and design a marketing strategy for the metaverse era.
1. What is Metaverse?
Metaverse is the next version of the Internet which combines multiple virtual spaces and takes a step further from a two-dimensional virtual world to a three-dimensional virtual world that strives to be highly interactive, experiential, and gamified. This will allow customers to have real-time interactions and experiences across distances with a combination of virtual reality and mixed reality through a browser or headset.
This digital movement has started to blur the boundaries between the physical and virtual worlds. If the companies are trying to target a digital audience of 15–30-year-olds they’re probably not on social media anymore, they’re probably in the metaverse. For example, the conception of the metaverse is a new breed of platforms like Roblox, Decentraland, Sandbox, Fortnite, Minecraft, etc.
2. How can companies get into the Metaverse?
Companies and brands can slowly take small steps to start taking their consumers, into the metaverse, how much to dive into this space is the company’s choice. Now is the right time to adopt a test-and-learn mindset, be open to experiments in the metaverse, and capitalize on success.
The most cautious companies can start by incorporating the metaverse in their present familiar marketing strategy and place things by replicating the physical world into the digital universe. The companies that want to just dive a little bit deeper into that space could tryouts the product or service in the digital space. Metaverse users are highly open to new experiences and new things they want to try, and companies can build on that as per the preference of their target consumers.
For example, this has started happening through virtual 3D manuals, world digital travel guides, tour hotel rooms, shopping for furniture virtually, or experiencing future mobility solutions. The ‘Hyundai Mobility Adventure’ is the first virtual experience content on Roblox developed by a global automotive brand to showcase future mobility lifestyles in the metaverse.
Another example is the ‘Decentraland’-3D virtual environment created to encourage social interaction that enables users to create virtual worlds using digital objects that are replicas of actual objects and interact with digital avatars of other community members. On this metaverse-like platform, everything from a jacket to cars and even real estate is generated and traded using the native digital token MANA.
3. How can companies take benefit from the Metaverse?
Companies and brands can take benefit from the metaverse by enhancing their customer’s user experience, aiming to deepen customer loyalty and engage in new ways with their target audience and grow revenue. Metaverse will help companies to understand their consumers’ emotions, and body language and retain the same emotional connection as in the physical world.
The business operations like lending, borrowing, and real-estate browsing and buying, can also be expected to happen through blockchain-based asset NFTs. The companies can also advertise or market themselves in the metaverse through banners and sponsor or host an event. In the future, the metaverse could significantly transform how organizations and consumers interact with products, services, and each other resulting in more exciting, realistic, and natural experiences.
For example, museums and galleries can organize digital art exhibitions, and the artists could open a metaverse gallery, and sell their NFTs to customers who needed three-dimensional models of their unique creations and the viewers can enjoy the show using a Virtual Reality headset.
Another example is sports manufacturer ‘Nike’ selling the lifestyle has built the metaverse space called ‘Nikeland’ which uses the Roblox platform to allow its fans to meet, socialize, take part in promotions, and engage with a whole range of brand experiences. The company claims that 7 million visitors have spent time in ‘Nikeland’ since it launched in November 2021. They have been able to enjoy celebrity appearances from sports stars, as well as buy exclusive digital products to decorate their avatars. Each visitor to ‘Nikeland’ also becomes a custodian of their own “yard” – a personal space within ‘Nikeworld’ that can be used to show off their collectibles and decorated to suit their personality.
4. What are the challenges of the Metaverse?
Metaverse must overcome the challenges to become fully operational and for starters, it’s the ‘interoperability’ between the numerous platforms of different vendors that must be merged to work as a unanimous universe rather than a scattered platform. Another challenge is the technology which is the building block of the metaverse although companies are racing to develop the latest tech that would empower metaverse experiences, presently is neither user-friendly nor affordable which results in limited adoption.
Metaverse will also raise new challenges for gathering and protecting data, and for cybersecurity and privacy. Security will be paramount, as a new, decentralized digital world may offer malicious agents new entry points for attack. Authenticity and trust should be at the center to reduce the disinformation that has often troubled the internet.
Companies that create trusted metaverse experiences and protect privacy rights may win consumer loyalty and help them to stay on top of metaverse trends to forecast consumer preferences and buying behavior. The advantage may shift to those companies that offer (through hardware or software) trusted ways for users to enter the metaverse. This will need rules for trusted digital identities, rules of engagement for users, rules for how the metaverse itself can change over time, and enforcement mechanisms, including tax collection, data governance, and regulatory compliance.
5. Whether Metaverse is here to stay?
With the growing digitalization, ongoing technological advances, and major investments in metaverse infrastructure by tech companies, the shift towards influencer marketing on platforms such as WeChat, YouTube, Instagram, Omnichannel commerce, New immersive retail, entertainment, sports, and innovations in both physical-to-virtual and virtual-to-physical transactions will lead to the growth of metaverse in future. Post-pandemic consumer expectations have drastically changed, and they expect fast delivery of highly innovative experiences from companies. They want to be unlimited by the physical world constraints and tend to see brands in the metaverse space as innovative.
Finally, the metaverse has great future potential and here to stay. To create value throughout the organization, business leaders must take the time to think through the potential strategic implications of the metaverse for sales, operations, production, R&D, and HR. Companies and brands that plan and execute now will benefit most from the future of the metaverse.
(The author is professor of marketing at Amity University. Views expressed are personal.)