Facebook’s recent decision to rebrand itself as Meta signals that brands need to capitalize on the opportunity given by the metaverse as “technological advancements across hardware, software and connectivity” create more immersive experiences than ever before. That, coupled with increasingly digital interactions and more dependence on digital infrastructure brought by the COVID-19 pandemic, mean both new opportunities and challenges for brands. In essence, the metaverse could be seen as a promise given by top tech companies to “aggressively take global connectivity to the next level”.
The definition of metaverse
The concept of the metaverse is still evolving. Its definition is thus incomplete. VentureBeat, a US website covering transformative technology, defines the metaverse as “a real-world version of the Matrix: a fully immersive environment in which users leverage virtual reality, cryptocurrency, livestreaming, and a host of other technologies to navigate a digital world”. According to VentureBeat, the metaverse should be seen as “a 3D World Wide Web or a digital facsimile of the physical world”, where users can move about, connect to other users, buy, hold meetings and engage in many other online activities.
Harvard Business Review (HBR), one of the leading US publications on strategy, innovation and leadership, defines the metaverse as any digital experience which is “persistent, immersive, three-dimensional (3D), and virtual, as in, not happening in the physical world”. The metaverse gives the opportunity to connect, play, work or buy.
The transition to the metaverse
The metaverse will inevitably change the way Internet users communicate, shop and socialize. In fact, its impact on younger demographics can already be seen. As gen Z grows in number, the retailers that have not adapted to the metaverse risk becoming obsolete. To remain relevant, companies need to adapt at an adequate pace: “adapting too slowly could mean any business’ demise regardless of previous success”, notes Rob Pierre, Co-founder and CEO of Jellyfish, a digital transformation agency.
A gradual transition to the metaverse is still relatively easy now as today’s metaverses are mainly “simplified virtual items or virtual services accessible with or without VR headsets”, explains Vlad Panchenko, Founder and CEO of DMarket, a marketplace for non-fungible tokens (NFT) and virtual in-game items. The transition to the metaverse will increasingly become more complex as it expands to ubiquitous networking, blockchain, non-fungible tokens (NFTs), extended reality (XR), virtual reality (VR), augmented reality (AR) and perhaps some newer technologies.
According to Panchenko, the metaverse will eventually turn into “the omniverse with multiple cross-chain possibilities”, which will make the virtual economy as important as the physical one. The metaverse is creating a global economy which will exceed the current one “many times over”. Panchenko argues that there will be no other option but to join it. Otherwise, you risk going out of business.
The metaverse and consumer behaviour
As the metaverse stimulates the convergence of virtual and physical realities into “a new, blended physical and digital world”, savvy brands increasingly recognize that younger generations that will soon form most of the workforce seek “shared social spaces and virtual experiences” as well as opportunities to co-create. Forward-thinking brands will make co-creation part of their offer, thus transforming passive consumption into active participation, interaction and self-expression, which are especially important to younger consumers.
Christian Perrins, Head of Strategy at Waste, a creative agency, argues that the blurring distinction between online and offline experiences gives a huge opportunity for brands. He observes that the gaming behaviour of younger gen Z players indicates that “gaming environments are social spaces first and foremost […], where young people meet, compete, collaborate and create”. Games are as significant as TV was for gen X and boomers, except they are participatory and open-ended, i.e. non-scripted. Game creators are thus heavily investing in creating the most distinctive and involving spaces that will drive “lifetime belonging and value”.
References: Isabel Perry, adage.com | metavrse.com | venturebeat.com | Janet Balis, hbr.org | Rob Pierre, entrepreneur.com | Cathy Hackl, forbes.com | Angela Woo, forbes.com | Chris Sutcliffe, thedrum.com