Rising inflation and potential slowdown bring uncertainty for business
RBA Governor Phillip Lowe has strongly signalled that another out-sized increase in the cash rate is on the cards at...READ MORE
As organisations, brands and customers look to the future our dependency on technology heavily influences the way we connect, work, shop, and access services is on the verge of a dramatic acceleration. Global interest in blockchain, cryptocurrencies, non-fungible tokens (NFTs), Web3 and now the metaverse have quickly risen to prominence –challenging governments, businesses, and individuals to think about the ways we will operate in the future.
The metaverse marks a new era for the convergence of physical and digital worlds – a market where Virtual World revenue is predicted to grow from $180 billion in 2020 to $400 billion in 2025. Continued advancements and availability of assets such as augmented reality (AR) and virtual reality (VR) tech, coupled with evolving digital platforms will change the way products and services are developed and new ways for brands to engage with customers.
Customers and Brands are already exploring the Metaverse
Organisations are beginning to explore the metaverse as the next generation of customers spend an increasingly large amount of time online. According to the U.S. Bureau of Labor Statistics, Gen-Z is expected to make up 30 percent of the workforce by 2030 with an estimated purchasing power of $143 billion USD. Gen-Z will be a powerful force driving the overall marketing and customer experience.
To capture this audience, brands are creating digital twins of shopfronts and head offices to foster more intuitive, immersive, and engaging environments. This enables brands to transition away from the traditional 2D e-commerce customer journey – to immersive virtual commerce.
Although this presents an opportunity to understand the customer more deeply, organisations must be mindful of privacy, to preserve trust and loyalty. To have future success in the metaverse, companies will need to build their own database through direct-to-consumer relationships. Loyalty initiatives that offer mutual value will encourage customers to provide their details in exchange for a better customer experience.
Customer benefits in a virtual environment include personalised fitting experiences, 3D product catalogues and access to 3D customer service agents. It also allows brands to explore advertising opportunities in virtual spaces and test the popularity of digital products before physically launching them.
Leading luxury brands, including Balenciaga, Ralph Lauren and Gucci, have already launched exclusive lines of virtual clothing – a market that Morgan Stanley predicts will be worth US $50 billion or more by 2030. Walmart has also filed several trademarks related to virtual retail products, NFTs and virtual currencies.
These moves by multinational brands have not only opened the door to expand on existing marketing and sales strategies (such as NFT holder discounts, loyalty programs and exclusive access), they also represent a significant shift in how brands think about the future.
Venture Capital is driving support for Crypto, Web3 and Metaverse innovations
Last year, more than $33 billion was poured into web3 and crypto companies by institutional and retail investors as venture capital firms raced to establish funds targeted at developing technologies such as cryptocurrency networks, AR/VR wearables, virtual worlds, digital avatar developers, online gaming and NFT marketplaces.
Outside of Venture Capital, other organisations are also pursuing market opportunities:
How can businesses prepare for the metaverse?
The metaverse is a new virtual frontier with no clear pathway through for businesses. For those contemplating entry into the metaverse, questions to consider are:
For those looking to be early adopters of the metaverse, access to trademarks, brand domains and intellectual property will is key. For others developing a customer centric strategy with answers to these questions is a good starting point.
Showcasing emerging trends, peer involvement and competitor movements at the next leadership meeting is an excellent way to engage executives and generate conversations around the metaverse. It can be intimidating to navigate the digital landscape, particularly when complex concepts, such as NFTs or blockchain are involved.
There is so much about the metaverse to explore and unpack. Learning about it by reading the right information and following the right conversations can help businesses prepare for and better understand the metaverse. If the metaverse is the future, it is important to consider how to be metaverse ready.