The next big thing or the hype of the decade?
The fact is that there are countless definitions of what the metaverse is - put in simple terms, it is the evolution of today’s internet. It doesn’t refer to a specific type of technology or a single platform. The metaverse is essentially the convergence of our physical and digital lives, taking the way we experience the internet today from 2D to 3D. Another term that has been increasingly used recently is Extended Reality (XR) – the convergence of virtual reality, augmented reality, artificial intelligence, blockchain and cryptocurrencies.
The metaverse aims to bridge the gap between the ‘offline’ and the ‘online’ and in turn, unlocks tremendous opportunities for customers to experience and interact with brands. This could elevate a brand from being e.g. “just another coffee brand” in a customer’s mind, to “a coffee brand that organised a 3-day virtual festival for its loyalty card subscribers”. Or even, could allow a UK-based asset manager to connect it’s global investor network via a virtual B2B conference.
One of the key differences between Web 2.0 (internet as we know it today) and Web 3.0 (‘the metaverse’ sits as the presentation layer within this) is the organisational structure. Web 2.0 is centrally owned, whereas Web 3.0 is community governed and decentralised. Another clear difference we could spotlight here is the fact that the payments infrastructure in Web 2.0 is based on traditional payments (i.e. debit/credit card), whereas Web 3.0 can leverage alternative digital currencies.
It’s also worth noting that some form of the metaverse has been around for quite some time. Think back to the early 2000s, when The Sims was one of the top selling PC games. Modern equivalents like Minecraft or Fortnite might also ring a bell. What has brought the metaverse to the forefront over the past few years (In 2021, internet searches for ‘metaverse’ increased by 7,200%), is the fact that we are now getting closer to bringing these experiences to ‘mainstream’, with numerous household brands investing heavily in building immersive virtual worlds.
Financial conglomerates are also speculating that the metaverse opportunity could bring significant global value creation over the next decade. Citi estimates the sector could top $13 trillion by 2030; Goldman Sachs estimated the metaverse as a $8 trillion opportunity; metaverse-related companies reportedly raised upward of $10 billion in 2021.
Limitations and opportunities within the metaverse
Organisations that have been investigating this space and looking to tap into the hype will already know that the technology and platforms are still not where they need to be. The lack of commerce infrastructure, for example, means that brands who want to sell products natively will find it difficult to do so. Another question mark revolves around interoperability, in which brands will find it challenging to replicate experiences across multiple platforms, and customers are not currently able to ‘transfer’ digital assets (i.e. virtual clothing) to ‘multiple worlds’. Then there’s the chunky headsets. VR headsets are the backbone of ‘entering’ the metaverse, and the fact that the hardware is still relatively expensive and not-so-accessible is an evident additional barrier.
Nonetheless, ongoing technology advancements, computing power, the rapid adoption of 5G and many more, are indeed enabling these immersive environments, making it possible for brands to start exploring, thinking about their metaverse strategy and testing & learning. For customer experience/engagement leaders, the metaverse allows a new and exciting way to engage with their target audiences.
Think about how normal online-to-offline sales conversion is today. In a few years’ time, metaverse-to-offline may be the norm. Several household brands have already been dipping their toes in the metaverse, and it’s inspiring to see brands who have started setting their strategies while staying true to their brand values.
How have brands leaped into the metaverse?
What we today call ‘the metaverse’ is still some years behind reaching its full potential, but a few brands have rightly started experimenting with this concept and leveraging the limited technology that is available today:
- Vans launched an interactive skateboarding experience on Roblox, where visitors can use their avatar to practice skating tricks and compete on challenges and races.
- Samsung created an immersive world in Decentraland – called Samsung 837x – which is a virtual environment modelled after the brand’s flagship store in New York City. The brand described the activation by explaining that it gives “guests access to ground-breaking digital experiences, connecting technology with art, music, fashion and sustainability.”
- The likes of Burger King and McDonalds have filed patents to develop virtual restaurants, betting that customers will gradually start interacting with each other in virtual reality and order food deliveries to their physical homes.
- In May last year, Gucci marked its 100thanniversary under the creative direction of Alessandro Michele by launching the Gucci Garden, replicating an offline immersive multimedia experience on Roblox.
- Mondelez’s Cadbury launched a metaverse Valentine’s Day campaign, alongside agencies Ogilvy and Wavemaker, introducing a real-time personalisation of augmented reality which enabled customers to unlock secret messages sent by their loved ones virtually.
Things to have in mind
Some important considerations to help organisations get started include the following:
- Listen to your customers and create virtual experiences that align with the attitudes, behaviours, and motivations of your target audiences.
- Think about the end goal and the reason behind being active in the metaverse, to be able to link this investment to measurable ROI. For example, is the primary aim to engage with your customers in a new way, increase awareness of a new product and/or among new audiences, or you after exploring a new sales conversion channel?
- Stay true to your brand values. The opportunities are limitless; hence, start by exploring how to best convey what your organisation stands for in virtual environments.
- Employ a test & learn approach. Start experimenting. Some lower-risk use cases might be selling digital versions of physical products to increase brand awareness. On the other end of the spectrum, some brands have started buying digital real estate for sales, which might be considered a higher-risk solution.
At KPMG, we help brands deliver change across their whole enterprise by aligning their middle, back and front-offices, to monetise on opportunities such as the metaverse. We can help you with:
- Journey orchestration and design: helping you design your journey, covering both the real and virtual worlds
- We have a dedicated insights team that can help with Voice of the Customer and building your loyalty proposition: how can we build the metaverse to increase your customer loyalty?
If you are intrigued, speak to us today to find out how we can help.