While the opportunities in the virtual worlds collectively known as the metaverse will look different in every business, the main value that organizations have begun to tap into is the ability to engage with consumers differently than on other online channels.
According to a June report from McKinsey, the metaverse has the potential to generate up to $5 trillion in value by 2030, an opportunity it called “too big” for companies to simply ignore.
But before a business jumps into the metaverse, they must understand the type of virtual presence they want to establish with their customers.
The metaverse is a consumer touchpoint, adding value and immersing a user into a specific experience for them to spend more time engaging with a business.
“The business proposition is the type of virtual presence a company would like to create and how they want to interact with their consumer, whether it’s for informational or entertainment purposes,” says Jordan Edelson, CEO and co-founder of TradeZing.
He explains that for the experience to be effective, a business needs to understand their consumer and how they can create a presence in an authentic way without forcing themselves on the user.
“Lastly, a business always needs to understand the risks involved with any unchartered and undefined territory,” he says. “An organization should consider costs associated with the metaverse along with the digital presence that they will gain with their consumers.”
New Opportunities to Connect with Customers
Hayley Sikora, experience strategy director for Valtech, says it’s important to note the term “metaverse” describes a future network of virtual worlds expected to further connect physical and digital realities. “While the metaverse has not yet come to fruition today, it is widely believed to be where much of our interaction will take place in the next wave of the internet,” she explains.
She points to today’s virtual worlds including Roblox, Fortnite, or Decentraland as some of the first steps toward this metaverse, which have given brands their first real opportunities to connect with users in this space.
Sikora says the beauty of metaverse experiences is that businesses can use them to connect with consumers around the world while making it feel nearly as intimate and engaging as being in a physical space together.
“On a more tangible level, the business case for a metaverse experience can be made through a few different lenses,” she says. “From a brand awareness lens, the metaverse represents an opportunity to reach broader audiences and make deeper connections with them than other channels do.”
From a revenue standpoint, the metaverse gives brands the ability to incorporate enhanced product visualizations, consultations, and tools that have been proven to lead to more conversions.
As far as a company’s product portfolio goes, the metaverse provides the ability to sell new, digital product lines such as NFTs or tap into D2A (Direct-to-Avatar) revenue models.
Finally, from a cost savings standpoint, the metaverse gives businesses the ability to create, maintain, and update immersive experiences faster and cheaper than ever before.
“Think of the metaverse as a new marketing channel, just like social media was once the hot, new marketing channel for organizations,” Sikora says. “While not every department needs to be thinking about the metaverse strategy day in and day out, organizations should be getting teams together to collaborate on how the metaverse will play a part in the overall omnichannel journey for the customer.”
A Sovereign Space for Digital Creations
Josh Constine, venture partner at early-stage VC fund SignalFire, says the opportunity of the metaverse is to build an immersive and interconnected set of online third spaces where users have sovereign ownership and portability of their digital creations and possessions.
“As things like graphics, connections, screens, and headsets get better, and as more apps are built for the metaverse, people will spend more time there, unlocking chances for advertising, shopping, ticketing and subscription experiences, and the infrastructure that powers it all,” he says.
Businesses dipping into this world will need product managers that can reimagine how their products will work and could be sold in the metaverse, and marketers that can get them the partnerships, property, and promotion to help consumers discover them.
“Don’t try to shoehorn your business into the metaverse in ways that are intrusive or unnatural just to preserve your existing product experience,” he advises. “Instead, think about how your product could be modified or translated to add value in the metaverse.”
Defining KPIs to Track Success
Edelson says an organization needs to define success and track KPIs associated with the metaverse as they begin exploring opportunities.
Once those are established, a business can research what opportunities they want to consider and weigh the costs of each possibility, whether it be deciding to build their own metaverse or join an existing one.
That decision is generally determined by the trajectory of the existing metaverse, how long it has been around, the founding partners behind the metaverse and if their principles and ethics are in line with the company considering using it.
“Once a company commits to a metaverse and directs eyeballs to that platform, it will be difficult to unwind, so it’s important for executives to do their due diligence and research each opportunity,” he notes.
Ultimately, one of the most important factors to consider is the ease of use and how intuitive the experience is for the consumer so that they are more likely to continue returning to the platform.
“The metaverse is still a very new concept and businesses are experimenting with different features, so an organization needs to remain flexible and keep in mind that the technology is evolving,” he says.
Edelson compares it to the time when the initial web was created, when businesses weren’t familiar with the technology and were slow to adopt it. “Eventually, once we pass the trial-and-error phase and the infrastructure is fully developed, we will see this sector grow and more companies will embrace the metaverse,” he says.