Not so long ago, Meta (formerly known as Facebook) reached $1 trillion in market cap. Since reaching that milestone, its valuation has plummeted. Tech correspondent Ari Levy (@levynews) reports, “The slide began late last year as signs of a sputtering economy started to emerge, and accelerated in early 2022 after the company said Apple’s privacy change to iOS would result in a $10 billion revenue hit this year.”[1] The company also announced it was laying off 11,000 employees. Levy notes that Meta founder and CEO Mark Zuckerberg changed the company’s name because he believed the metaverse was the future — “a virtual universe of work, play and education.” The collapse of Meta’s valuation begs the question: Is the metaverse the future of the internet and online commerce?
Analysts from the Boston Consulting Group (BCG) believe it would be a mistake for companies to ignore the metaverse. They write, “The metaverse is already a big part of business. It will only become more central.”[2] They add, “There are two questions companies should ask: How will the metaverse change our business? And how can we get ahead of the change and shape it to our advantage?” Retail and marketing journalist Jessica Deyo (@DeyoJessica) agrees with the BCG analysts and insists that companies should take the plunge and “go beyond [making] a metaverse cameo.”[3] And futurist Thornton May (@ThorntonMay2) insists, “Despite lukewarm user demand for metaverse capabilities to date, the time is right for enterprises to be conducting experiments and prototypes in this potentially disruptive space.”[4]
The Future of the Metaverse
Freelance writer Dennis Mitzner (@DennisMitzner), who routinely explores the interplay between technology, culture, and politics, insists, “How consumers engage online is changing rapidly.”[5] He reports, “In a recent survey, 71% of customers said they would shop more frequently with [augmented reality]. Now, with the arrival of the metaverse, users are exposed to a new alternate world that allows them to experience an immersive and virtual experience, ushered in by advanced technologies such as augmented reality and virtual reality. For users, this allows for seamless transitions between virtual and physical environments.” As I pointed out in a previous article, there are really two metaverses — an enterprise metaverse and a consumer metaverse.[6] In this article, I want to explore the future of the consumer metaverse.
Mitzner notes, “In many ways, immersive commerce is an extension of traditional ecommerce as it creates new and improved customer experience by utilizing new tech.” Most pundits insist that the metaverse and Web3 are inextricably connected. Analysts from Deloitte explain, “Moving further into a world that blends the physical and digital may require greater integration, more modern standards and protocols, and capabilities that give people more control of their digital selves — their identity and representation, what they own, and who has access to the data they create. Just as standardized protocols and devices enable interaction with digital experiences on the internet, the promises of Web3 could help enable consistency and interoperability across metaverse experiences, uniting disparate, disconnected metaverses into a single coherent platform.”[7]
When discussing the metaverse, most experts talk about its future rather than its present. As marketing expert and founder of Brandwidth Andrew Strange, explains, “It’s still a collection of platforms and technologies which aren’t yet integrated.”[8] May agrees. “Right now,” he writes, “the metaverse is essentially an undefined amalgam of technologies and concepts including but not limited to augmented reality (AR), avatars, blockchain, cryptocurrencies, extended reality (ER), mixed reality (MR), NFTs (non-fungible tokens), virtual reality (VR), and Web3.” Strange suggests that several things must take place before the metaverse can evolve to the next level. They include:
• Faster and more reliable connectivity.
• Affordable and comfortable AR and VR headsets.
• More content, and more creativity from brands.
• More collaboration from tech companies and content creators.
Even though an integrated metaverse does not yet exist, most experts recommend retailers begin immediately strategizing and experimenting in the metaverse space.
Metaverse Experimentation
Deyo observes that many brands are taking a cautious approach when it comes to the metaverse. “In the past year,” she explains, “brands have leveraged the metaverse in a variety of ways, whether it be a virtual storefront, collection of mini-games, augmented reality experience or as a pathway to nonfungible tokens (NFTs). The number of users visiting such activations and the time spent per session offers some insight to performance. However, a data gap lies in the inability to track success beyond walled gardens, begging the question of whether or not such channels are worth it.” According to May, that uncertainty is widespread among brands. During interviews with business executives, he found, “Most [executives] agree that the metaverse could be ‘a place,’ that is, an environment where people spend time, and ‘a platform.’ Most executives also believe the metaverse is definitely ‘a phenomenon’ and might be ‘an opportunity.’ At the least, it should be viewed as ‘the latest step in the overall digitalization of social activities,’ most believe.”
May suggests looking at the metaverse the same way you would look at any emerging technology. The example, he uses is the invention of the train. In that case, someone had to come up with the idea, someone had to finance the infrastructure, and, finally, consumers needed to demonstrate a willingness to use the train. He asked executives to imagine that metaverse was train. He then asked them where, along the following spectrum, they would place it: 1) There is no train; 2) There is a train and I should probably be on it; and 3) The train has already left the station and I am behind. He writes, “Most executives placed themselves somewhere beyond ‘there is no train’ and closer to ‘there is a train and I should probably be on it.’”
If business executives truly believe they should be on the metaverse train, Strange suggests, “The best thing brands can do right now is to have a practical roadmap outlining their goals for VR and AR. The brands that adopt these technologies with customer experience and long-term vision in mind will be the ones that are most prepared to seize the moment when the metaverse becomes a reality.” When preparing that roadmap, brands should keep in mind the two questions posed by BCG analysts at the beginning of this article: How will the metaverse change our business? And how can we get ahead of the change and shape it to our advantage? Deloitte analysts conclude, “Experimenting with Web3 and metaverse solutions for today’s problems can lay the foundations for the next stage of the internet. Leaders should seek to understand how their capabilities and mission enable them to build in the near term, plan for the midterm, and prepare for longer horizons.”
Footnotes
[1] Ari Levy, “Facebook used to be a Big Tech giant — now Meta isn’t even in the top 20 most valuable U.S. companies,” CNBC, 27 October 2022.
[2] Rony Abovitz, Sumit Banerjee, Guy Gilliland, Christy Liu, Edwardo Sackey, Alexey Timashkov, and Rob Trollinger, “How the Metaverse Will Remake Your Strategy,” Boston Consulting Group, 13 July 2022.
[3] Jessica Deyo, “Why brands should go beyond a metaverse cameo,” Retail Dive, 26 October 2022.
[4] Thornton May, “Metaverse: The time for CIOs to experiment is now,” CIO, 29 August 2022.
[5] Dennis Mitzner, “The Rise Of The Metaverse, NFTs And Immersive Commerce,” Forbes, 26 October 2022.
[6] Stephen DeAngelis, “Metaverses for Enterprises and Consumers,” Enterra Insights, 22 August 2022.
[7] Jana Arbanas, Kevin Westcott, Allan Cook, Kevin Downs, and Chris Arkenberg, “Metaverse and Web3: The Next Internet Platform,” The Wall Street Journal, 30 September 2022.
[8] Andrew Strange, “The metaverse doesn’t exist yet, but brands should be preparing for its arrival,” The Drum 25 August 2022.
