05 May 2022
Welcome to the metaverse
Since the birth of the internet, the digital world has been dominated by the sharing of content and the buying and selling of goods and services by those sat in front of screens. For almost 40 years there has been a clear divide between the digital and physical landscapes – but not anymore.
What is the metaverse?
The metaverse is the concept of a 3D virtual world which operates by and large in the same way our physical world does – with social communities, businesses and even homes where users can live their virtual lives as their digital avatars. Despite sounding like something pulled straight from an H.G. Wells novel, the metaverse is a seamless convergence of our physical and digital lives and is on the cusp of becoming a very real reality (virtual or otherwise) for individuals and businesses alike.
We have seen already a number of technologies and solutions ebb into our everyday lives and vocabulary in recent years as a precursor to the metaverse, with the likes of augmented reality (AR) and virtual reality (VR). Even back in 2020, it was anticipated that 25% of the US population would use AR at least once per month (eMarketer).
Similarly, the creation and adoption of blockchain has made digital currencies and non-fungible tokens (NFTs) possible, allowing those that operate in the virtual world to monetize their activities. This signifies a tempting opportunity that has already become a reality for not only individuals – such as digital art collector, Pablo Rodriguez-Fraile – but also businesses looking to capitalize on the next epoch of the digital evolution.
The result: an anticipated 2030 global market valuation of the metaverse of $678.8 billion (Businesswire).
The (virtual) reality of the metaverse for businesses
The global expansion of the digital world, and the increasing adoption of a direct-to-consumer (DTC) approach to ecommerce in particular, has already enabled greater access to goods and services that were previously out of reach. The metaverse offers the next step in seamless accessibility.
Brands are beginning to explore different ways to bridge the gap between the virtual and the physical worlds and enable their customers to flow smoothly between them. For example, McDonald’s recently filed applications with the US Patent and Trademark Office including proposals such as "operating a virtual restaurant online featuring home delivery". Similarly, during the 2022 Milan Fashion Week, apparel brand Benetton announced that visitors to its metaverse store would be able to participate in gaming experiences to win QR codes that they would be able to use in physical stores to buy real-life products. The virtual shop was built to mirror one of the brick-and-mortar locations.
Businesses are also experimenting with purely digital, metaverse-only experiences. Here, consumers can buy digital goods for their avatars, with the shopping journey being entirely virtual. For example, high fashion brand Gucci launched an art installation on Roblox to celebrate its 100th anniversary. Before exploring the gallery, users could browse, try on and buy Gucci items for their avatars. Likewise, Ralph Lauren launched an exclusively digital collection (Ralph Lauren Winter Escape) of genderless clothing on Roblox for users to dress their virtual selves.
The metaverse also offers many opportunities not only to operate as a business in a virtual realm, but to enhance the experience of interacting with and within a business in the physical world. In a Zoom-fatigued era, defined by remote meetings and seeing colleagues in 2D, the metaverse has the potential to enable every member of a team to be around the same table in a virtual landscape, no matter where they are physically. Already this is being tested in some businesses – such as Gymshark, which recently held a meeting in the metaverse – and this alone provides a glimpse into the potential for the metaverse to impact our lives in a not-so-distant future.
Consumers in the metaverse
So, what is the consumer consensus around the metaverse in light of its apparent inevitable arrival into day-to-day life?
Consumers have expressed positive sentiments towards the metaverse, despite it being in its infancy. Two in three consumers have said they want a new form of social media where they can engage in a virtual world, and 46% have stated that they intend to spend more time in the metaverse in the future (NRG).
At the same time, however, many consumers show concerns around data and privacy. Companies have the potential to track far more sensitive information, with the ability to monitor physiological responses and biometric data such as facial expressions in real time, gaining a deeper understanding of user behaviours and enabling them to tailor products and advertising strategies accordingly. In light of this, it is expected that regulatory bodies begin to work on new approaches to individual consent as well data collection and monitoring to protect personal information in the metaverse.
Let’s get phygital
Today consumers and businesses stand on the edge of a potentially defining development of the digital era. Whether cautious of or excited by the metaverse, all signs point towards the onset of a phygital world that blends the physical and digital experiences of everyday life.
As consumers, we can choose whether to embrace an entirely virtual realm or keep our feet firmly on physical ground. For businesses seeking their next opportunity to expand and evolve in the digital landscape, this choice may not be so black and white. With 25% of people expected to spend at least one hour each day working, shopping, socializing, attending school or consuming entertainment in the metaverse by 2026 (Gartner), will brands who leave the metaverse out of their digital business plan be left in what soon might be the digital dark ages?
If your brand is considering its future in the metaverse, ensuring your digital foundations are secure and thriving can be the best place to start. At THG Ingenuity, we’ve supported the digital transformation of numerous ecommerce brands for the past 17 years in their journey to growing through direct-to-consumer solutions. Get in touch today to learn how we can help yours.
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