Web 2.0, the second iteration of the internet, brought the world into a new paradigm, moving us away from static website pages and towards new interactive experiences and user-generated content. We are now on the cusp of the next stage, a seismic shift that will rupture the fabric of everything that existed before.
The metaverse, a virtual space generated by the convergence of virtual worlds, augmented reality and internet services, is coming. It’s going to change everything. By revolutionizing the way humans interact and live their lives, the metaverse will redefine what businesses are and how they should operate. Some companies are watching and learning. Those that don’t will be left behind.
Accelerated by COVID-19, generational changes and technological advancements, internet users are increasingly socializing, playing and shopping within virtual worlds. Some brands are using this as an opportunity to expand their offerings to include fully immersive digital experiences.
Take fashion trailblazer Gucci, which recently unveiled Gucci Garden, an immersive multimedia experience where users of online gaming platform Roblox can explore and purchase goods. Reflecting the value that exists within virtual platforms, a limited edition digital Gucci handbag available through the experience sold for more than $4,000, more than its physical equivalent’s value.
These retail titans are the trendsetters of the current age and their virtual migration is emblematic of the fact that the brands that wish to remain relevant, particularly to younger generations, will need to build in the metaverse, creating user-driven, fully immersive digital experiences that connect with their physical offering.
In today’s metaverse, people are represented by digital avatars that roam in virtual worlds such as Roblox or Decentraland, a decentralized 3D virtual reality platform. However, there is a disconnect between the user’s real self and the digital representation.
From a brand perspective, this gives companies the opportunity to offer their goods within two mediums: the physical world and the virtual world, where avatars can be outfitted in the latest digital sneakers, hoodies and handbags.
Indeed, this new space offers an arena where users can become both virtual and external brand ambassadors. It is shortsighted, however, to see the metaverse as simply a digitized version of the real world where brands will emulate existing shopping conventions and bricks-and-mortar stores. What is so special about the metaverse is that it will allow companies to break from convention and create a world that is totally unbounded by the existing limitations of physical space.
Brands will be able to create experiences that couldn’t occur in the real world, fueled by imagination and creativity. No longer will the physical store be the focal point of sales – there will be opportunities for the real world and virtual worlds to interlink, creating a whole new experiential dimension for businesses and consumers alike.
This could take the form of integrated digital and physical quests that will allow customers to search for branded items in the metaverse, while completing tasks that will also take them to in-world shopping destinations to complete actions or collect their winnings.
In a world where physical retail is suffering, the metaverse offers businesses an opportunity to pivot, integrating their physical and digital offerings, to reclaim what it means to sell to customers.
Offering non-fungible tokens (NFTs), digital certificates of ownership that have seen a massive rise in popularity this year, will be essential for businesses looking to make waves and create a brand identity in the metaverse.
Players in the metaverse gain social capital through ownership of items whose value is verified and whose rarity is known. Brands will need to offer players who wish to buy a pair of limited edition digital sneakers, for instance, the certificate of authenticity that proves that they own this digital asset.
Not all brands selling in the metaverse offer NFTs. In the instance of the Gucci handbag that sold for more than $4,000, the buyer only owns the item on Roblox, not via an NFT, which means if Roblox disappears in 50 years, so does the item. In order for the concept of ownership to have meaning and longevity in the metaverse, NFTs will be key.
Currently, you can only experience the internet when you log on, but the metaverse will allow us to experience it all around us, all the time. It will allow the internet to overlay our physical world. What this means for businesses, is that the customer is more important than ever, as they are shaping and driving the business to consumer engagement.
Part of the draw of the metaverse is that users have a hand in its creation. It is a decentralized space where users can create and explore however they want. This is the case in many existing gaming platforms, including Roblox, where users of the platform build games through a developer toolkit.
From a brand perspective, the decentralized nature of metaverse commerce provides an opportunity for brands to sell to players without the help of intermediaries like Amazon who capture significant portions of the profits and technology. It offers a space where smaller sellers will be able to reclaim the attention of their customers, while maintaining control of their profits and exposure.
A future where the virtual economy has as much value as its real-world counterpart is coming. Over the next decade, technology will develop so much that the physical and digital world will become indistinguishably integrated. As brands pivot to align themselves with this new future, it is essential that they redress their focus to create user-driven immersive experiences that place ownership, creativity and inclusivity at the heart of their missions.