First, desktops; second, the internet; then the smartphone;
Now, the virtual world.
The metaverse promises a new world but it’s still undefined, clunky, and uncontrolled.
You’d be forgiven for yawning when you read the most used phrase of 2022, ‘The Metaverse’. It’s a word salad: a confused, unintelligible mixture of seemingly random labels and phrases. Is it VR? Cryptocurrency? NFT’s? Web3? Yes. And yes, yes and yes.
Some see it as exponential technological progress, the next version of the internet. Some wonder why the next step must be to strap a computer to our faces that can make some users vomit with over-use.
The Metaverse won’t replace real life: but it adds an additional layer of depth and interaction on top of the real world. In one form or other, the metaverse is coming, and metaverse-like experiences have already arrived.
Many aren’t convinced. It’s still a vision - for the next iteration of the internet, still an undefined end-state with a sackful of technologies and ideas. Augmented reality (AR), avatars, blockchain, cryptocurrencies, extended reality (ER), mixed reality (MR), NFTs (non-fungible tokens), virtual reality (VR), and Web3 are all part of its dizzying mix.
Some, like virtual reality (VR) headsets and augmented reality (AR) glasses, are evolving rapidly and VR could yet become the next universal device after smartphones. Yet today there are around 175m game consoles installed - compare to five billion smartphones. Aside from VR and AR, other critical metaverse components, including adequate bandwidth and interoperability standards, are years off - and may never materialise.
But we can’t put a genie back in the bottle. Even still in its early stages, it has become a force impossible to ignore, capturing the imagination of individuals and companies big and small. McKinsey estimates that the metaverse could generate $4 trillion to $5 trillion in value by 2030. And many brands have already staked a place in it.
Who and where is your customer?
A brand shouldn’t invest in the metaverse just because because everyone is doing it. Invest when you know who your consumer is, and only when you know they are, or will be, on the platform.
Start with the ‘why.’ The key question is less ‘what can we do in the metaverse?’ and
‘Does the metaverse fit into our growth and innovation agenda?’. Don’t alter core objectives to fit into the metaverse.
It’s important not to reinvent the wheel every time a new piece of technology or platform is introduced. Haven’t we been there before? It’s also important to have a consumer engagement strategy that can work across different networks. If your social media isn’t working well outside the metaverse, it probably won’t translate inside it, either.
On the other hand, being prepared doesn’t have to mean investing in a metaverse platform, especially as the space is changing so rapidly that focusing on any one application may prove unwise.
According to Publicis Sapient research, “Almost one-third … of consumers expect that brands will instead embed metaverse experiences directly on their owned websites and social platforms, anything from 3D product demos, virtual showrooms and stores or brand experiences created for avatars as part of the typical e-commerce experience”.
So when is maturity?
Some forecasts suggest that around ten per cent of the digital economy will shift to the metaverse by 2030. I think that’s entirely possible. Others are more aggressive - forecasting upwards of thirty per cent. Some core components are being put in place. Apple with its augmented reality system - its mixed reality operating system, xrOS. Microsoft, with its attempted acquisition of Activision Blizzard (a games company) - a strong statement that immersive experiences are going to be important (it’s still awaiting verdicts from the UK, US and EU competition regulators). Immersive experiences like Fortnite, Roblox and Minecraft are growing rapidly. Augmented reality is also increasingly becoming part of Android devices. And Meta, of course; who want to do the whole thing at once - whilst nobody knows for sure if everybody wants it, no one is sure how to build it, and no one is sure when it’ll be ready.
The reality is that now the metaverse, by scale, remains niche, a set of applications that the majority of users use for entertainment and gaming. It stops short of an all-encompassing virtual reality. Today’s controlling ecosystems - Apple, Android and Meta - mean it comes with limited interoperability, difficulties crossing platforms, and a data grab. And it comes with unanswered privacy concerns, which is important - privacy is a key driver to consumer adoption.
It’s still clunky. Headsets are needed to meet up virtually with others, and we float around without legs, avatared versions of ourselves. Avatars can freeze up. Headset users tend to vomit. There are few rules, little privacy, and reports of child abuse.
…the video games business has been selling virtual worlds for decades
and some have attracted tens of thousands of virtual revellers, experimenting with concerts, and 3D broadcasting of sports events.
Will the Metaverse change the way consumers interact in the physical and digital worlds?
Yet on the flip side, every day, brands are entering the space, with customers following. About 21 luxury brands are trading in the metaverse. And making money. Over 21 million users have visited Nikeland (mid 2022), competing in games, browsing showrooms and buy virtual products for their avatars, walking adverts for the company’s latest products in the real world.
Other big brands, including Gucci, Vans, Tommy Hilfiger and Walmart, have dipped their toes in. Warner Bros., Disney, Hyundai, Gucci, Sotheby’s, Louis Vuitton and others are also stepping in. The metaverse has come to Microsoft Teams, with users in different physical locations joining collaboratively and sharing holographic experiences during virtual meetings. So there’s clearly a move from gamifying in the metaverse to creating and trading products and services in the metaverse.
Fashion powerhouses like Balenciaga have plans to offer couture outfits for digital avatars. Fast-food like McDonald’s have virtual restaurants where customers can order food for home delivery. So the metaverse is transitioning into a developing ecosystem where people can shop, influence and visit online.
And we know brands need to be wherever their customers are.
The beauty of the metaverse is that it enables conversational marketing, data is trackable and it’s immersive. And instead of broadcasting to your potential customers, it’s a two-way conversation, at scale, with data first party.
Expect it to take at least a decade before the metaverse reaches mainstream adoption, but...…..
How will it change CX?
Improbable and Impossible experiences
Experiences we otherwise wouldn't have or imagine, the impossible, anything from outer space to mountaineering, a journey to the bottom of the ocean or inside a volcano.
Products into Experiences
Like Disneyland building their complete metaverse world. It highlights the opportunity to weave an experience around a brand, product, or service. In the future, this can have an enormous impact on customer loyalty.
Scale
The metaverse provides any business with the opportunity to envision and productise experiences. This changes the value of CX and changes the reach of smaller brands. Anyone with a credit card and a business idea can create an online store employing low-cost suppliers from around the world
Increased Competition from Disruptors
The metaverse is an environment where anyone can purchase a stake and have a say in its operations. This places small, middling, and large brands on a level playing field.
Equal Access to virtual experiences
We can access existing experiences that have been previously shut off from some by cost, distance or disability.
Heightened social connections and lifelike interactions
Shared virtual experiences with friends or family in real-time in the same room are likely to be an early driver. This could lead to weaving experiences around a brand (Disney), product (shopping), or service (beach holiday) with an enormous impact on customer loyalty.
It could drive richer social experiences, with avatars gathering as a group, just as we do today in face-to-face social situations.
Better collaboration and co-creation
The metaverse will mimic real-world social interactions and accurately represent physical objects in three dimensions. We'll be able to collaborate with others as if they are in the same room. Using VR, surgeons in Brazil have already successfully separated conjoined twins with real-time assistance from surgeons located in other countries. Now think service product support, demonstrations, co-creation of new product, and other engagement.
More effective, efficient testing and training
It will raise the effectiveness of UX testing, user training by testing ideas and practising in the metaverse instead of physical spaces.
New channels for engagement
The metaverse's unlimited potential reaches beyond gaming platforms. Fidelity Investments created an immersive experience to educate and engage consumers in the digital world. Luxury fashion brands are selling virtual versions of their products in digital stores.
To date, though, of the top ten business sectors from Transport to IT, customer service is last in it’s investment, at four per cent of the total.
In many ways, the early metaverse is another addition to the CX channel mix into which brands can expand their digital footprint. Virtual shop-fronts, virtual ordering for real home delivery, a 3D service agent avatar, metaverse-ready services, and more. It will give colossal flexibility – from simple storefronts replicating real-world outlets to themed VR branded experiences - any CX strategy imagined, no matter how futuristic.
Consumer behaviour and the metaverse
The metaverse should allow brands to create richer personalised engagement no matter where that engagement occurs. It should enable customers to take the reins on their own buying experience from anywhere at any time.
Virtual scenarios will let customers meet with agents, salespersons and peers for a more personalised buying experience. As brands seek ways to improve customer engagement, virtual stores in the Metaverse present a unique opportunity for retailers to provide their shoppers with immersive experiences. In conversational commerce, brands and retailers leverage direct messaging platforms to interact on a personal level with shoppers. Retailer websites that leverage AI technology can provide individualized recommendations to customers based on their shopping profiles.
Final Thoughts
Although still largely conceptual, real-world metaverse applications are becoming available. Importantly, brands are filing trademarks, investing in virtual real estate, designing virtual twins of their products for use in virtual worlds, and selling directly to avatars.
In the real world, emotions and experiences are dominating consumer relationships, with consumers hungry for engaging experiences. Experience is becoming the key value driver, and the potential exists for us to create more emotional and engaging experiences in the metaverse. Whilst AR and VR are still cumbersome, the technology will improve, becoming more usable and less clunky.
Visiting a shop or retail store in the metaverse can extend convenience and extend emotional engagement for the consumer.
Customers today shrug off distinctions between the physical and virtual for many types of shopping or socialising. Experiences that can seamlessly connect the two worlds wherever they are will broadly be welcomed. Brands can leverage these virtual connections to solve customer pain points and needs in new and ground-breaking ways, in real-time. That’s when new engagement happens.
A brand’s ability to show up and navigate this frontier seamlessly will make an impression on consumers that builds brand loyalty and return visits.
For now, see it as an addition to the channel mix, not a replacement for today's digital and human-driven CX
As with the rollout of the internet when it started, we won’t fully see what it is until we're engulfed in it. Generational changes like Web 1.0, social media, and
mobile didn’t happen overnight. They take years and are the accumulation of incremental advances, evolving consumer demand, and cycles of
experimentation.
Don’t fall foul of determination theory, the idea that technology shapes social change, that it determines our future, saying “this is amazing so it must be part of the future”. This was true of the internet and smartphones but not so for 3D printing. Despite the excitement and forecasts it turned out there wasn’t consumer interest in it.
Instant revolutions are not how technology works. But we can see why the brands piling into the metaverse are trying.