Into the metaverse – strike while the (virtual) iron is hot

Into the metaverse – strike while the (virtual) iron is hot

Where there's change, there's opportunity. History has taught us that with every new innovation comes a new way to grow – and make money.

No one believed that cryptocurrency would take off but look what happened there. An intangible currency made people extremely rich, all because they were ahead of the curve. Cryptocurrency proved that people are ready to embrace a new form of ownership and wealth even if they couldn't physically touch the items they were buying – think non-fungible tokens (NFTs).

Which brings us nicely to the latest innovation in tech – the Metaverse.

The Metaverse is still in its infancy, and brands are still trying to work out what they should be doing with it and in it. But this only means that there's an opportunity to be had, and there's a race on to get ahead of the game and capitalise.

Although Meta (previously Facebook) are saying that the Metaverse is at least a decade away from maturity, its youth means that there's an opportunity to reach new consumers. No one truly knows how it may pan out or what it will look like, although there is a growing belief that market factors will decide the makeup.

That's not to say that it's not already growing, however. For example, Nike has already acquired its first Metaverse business in the form of RTFKT, which focuses on NFTs and digital shoes. And that's not all – Nike have also commissioned the creation of NIKELAND, where players can compete in games and buy the latest Nike gear.

Meta themselves have also invested $10 billion, conceding that they'll probably lose money on it in the short term. Sounds like a pretty big deal, then.

With that kind of investment going on from the big-name players, it's up to us to follow them into the opening they've created for us. But that means strategy, in the same way that any other new venture requires planning and proposition.

Different Screens, Different Purposes

What sets the Metaverse apart from the rest of the technology market is its ability to tap into every different format available. Since the mobile revolution, we already know that it has never been 'one screen rules all' regarding customer satisfaction, and the Metaverse brings that to life in an even bigger way.

Brands have always had to find new ways of connecting with their audience through different mediums, and the Metaverse widens that scope in the form of Augmented Reality (AR) and Virtual Reality (VR).

For example, consumers already use mobile screens in a different way to desktop, and it'll be no different with the Metaverse. Sure, you'll be able to access it from a tablet, perhaps, but you'll have a totally different experience with it compared to slipping on a VR headset.

So the takeaway here is that brands will have to be more inventive, thinking outside the box at all times to maximise the experience their audience can have with their virtual products or services. With so much opportunity on offer, brands have to capitalise in all areas.

Interest and Innovation

Consumers love brands that are constantly innovating and on-trend. Think about TikTok and how the best brands manage their social media to create interest using that latest innovation. No one saw it coming, but those that hopped on the bandwagon are reaping the rewards.

Exactly the same thing is going to happen, or is already happening, with the Metaverse.

As we've already seen with Nike, the biggest brands are investing hard in the Metaverse to get ahead. They're using innovation to create interest and evolve their offer to stay relevant. But, pretty soon, some businesses will be left behind when they see that their audience and customer base are jumping ship to where the trends are.

Companies should be careful, however, as there has to be a clear strategy for jumping on board so soon. They have to ensure they add value to the Metaverse and, most importantly, their audience. Otherwise, it becomes a gimmick.

Minimising the Risk

As with all new technologies, there comes an element of risk. With the Metaverse, there are likely four key risks to consider:

1)   Unpredictable user engagement

Businesses may struggle to achieve universal reach with the heavy reliance on VR headsets, despite the Metaverse supporting 2D apps and desktop-based engagement.

2)   Unpredictable value of cryptocurrencies

The large majority of transactions in the Metaverse are managed using cryptocurrency or NFTs, which shift in value from day to day. This makes it difficult for businesses to manage the strategy economically, and the Metaverse's economy itself will be unpredictable.

3)   Decentralised so therefore deregulated

A true Metaverse must be decentralised, meaning it will be owned by no one with complete transparency. Unfortunately, this means that the Metaverse will be hard to regulate, leaving businesses at risk.

4)   Portability to the physical world

For businesses native to the Metaverse, there is a risk that they will be restricted to a fraction of the global population. VR infrastructure may be difficult to translate into other digital formats or physical stores, leaving the majority of a potential audience untouched.

While these risks exist, brands may be hesitant to invest in the Metaverse. But it doesn't have to be that way. With a clear proposition and value on offer to the audience, there can be longevity in this new technology.

Consumers have to be clear about what they're gaining from the Metaverse for it to be worthwhile – for them and the businesses they're buying from. Likewise, there has to be a clear return on investment for businesses, and a well-defined strategy solves that problem.

Brands need to think about:

What the purpose is

As with creating a new product from scratch, brands have to figure out the purpose and problem it will solve. It's no use diving in and investing in the Metaverse without a clear position on what problem you are solving; else your product becomes useless.

What they are trying to achieve

What's the end goal of your strategy? Is it to gain a new audience or increase revenue? Maybe it's both, but brands need to be clear on what they are trying to achieve. This is particularly pertinent for service-based businesses – they need to consider how they will deliver experiences and what that will look like for their consumers.

What value they will add

The Metaverse will soon be filled with competition trying something new, and the best way to set yourself apart is by focusing on the value you can add. Interaction is everything in the Metaverse, so concentrating on the community and customer service is key. There is a fine line with new innovations between becoming a fad or a gimmick and genuinely offering value. Brands need to decide which camp they want to fall into.

Some Final Thoughts

Return on investment is the challenge with the Metaverse, with no one really sure about what it's going to look like in the long term. However, a clear focus on proposition, strategy, and value can negate the risk.

If we approach it with the same robust yet flexible strategy, we would with the launch of a physical product, we can go some way to ensuring success in a virtual world. And with so many brands now investing, it's surely only a matter of time before the Metaverse becomes a reality that we can profit from.