The metaverse. It’s been called a “paradigm shift for technology” and was the buzzword of the 2022 Consumer Electronics Show. Goldman Sachs analyst Eric Sheridan calls it an “$8 trillion market opportunity.”
Facebook’s Mark Zuckerberg sees the metaverse as so monumental, he changed the company’s name to Meta and is investing $10 billion in it.
Companies like Nike, Sony, Home Depot, and Procter & Gamble are leaping into the metaverse to engage with customers, increase sales, broaden their social media reach, and demonstrate their relevance.
Shutterstock even published its 2022 Creative Trends Report in the metaverse.
So, what’s in it for SMBs?
Plenty. As ProTexting.com CEO Kalin Kassabov noted on Forbes: The metaverse “will influence every aspect of culture, entertainment, and marketing.”
Says Janet Balis, EY Consulting Marketing Practice Leader and author of “How Brands Can Enter the Metaverse” in the Harvard Business Review: “I think small and medium businesses should care about the metaverse for the same reasons all companies should—which is that it’s about innovation and we should all pay attention to innovation.”
The payoff could be substantial for B to C and B to B businesses. Euromonitor International’s Top 10 Global Consumer Trends 2022 report said: “Companies that start establishing a presence now will be at the forefront as virtual social environments and AR/VR develop.”
And, says Remound Wright, founder and CEO of EnvironXR (an immersive e-commerce platform that helps brands create metaverse revenue streams), Shopify has found “products that utilize AR increase their conversion rate by 2x and decrease their return rate by up to forty percent.”
What’s more, he adds, “immersive e-commerce increases time spent shopping and the average order value—basically, augmented reality helps improve all the most important metrics to e-commerce brands.”
The better you can build the experience around a product, says Wright—whose firm works with Shopify to build brands in the metaverse—“the more likely people are to convert and purchase that product.”
Before diving in to the metaverse, however, it’s helpful to understand what the metaverse actually is, as well as its misconceptions.
The metaverse is so new that its very definition is being sculpted and evolving.
Generally speaking, the metaverse is the virtual, avatar-populated, cinematic, 3D world of the internet, using Augmented Reality (AR) and Virtual Reality (VR) to make activity there more of a memorable, interactive experience for users and a profitable one for brands.
The pandemic’s demand to do more things virtually due to lockdowns and in-person restrictions has only made the metaverse more relevant and vital.
In some ways, the metaverse is a precursor to what’s known as Web 3.0 or Web3, the heralded upcoming decentralized internet powered by blockchain technology, cryptocurrency, and the NFT digital currency (non-fungible tokens).
One misconception about the metaverse is that customers must have special equipment to shop and socialize there. That isn’t necessarily true.
Augmented Reality—described in detail in “Why Retailers Need to Adopt AR Technology Right Now”—enhances objects in the real world with computer-generated techniques and is typically done with your smartphone or computer.
By contrast, Virtual Reality is 100% computer-generated and does require equipment (think Meta’s Oculus VR headsets and haptic suits where you can “feel” a video game’s action).
For example, Oculus Quest 2 VR headsets cost $299 to $579 and Microsoft’s HoloLens “mixed-reality” eyewear headset goes for $3,500.
“To date, televisions have not been a particularly robust interface to the metaverse, but we anticipate they will become more robust as time goes on,” Balis says.
Augmented Reality is where most of the metaverse action is today because it’s easiest for consumers to use. The Wall Street Journal says VR hardware “can be expensive and clunky.” Consequently, “big brands like Nike, Amazon, IKEA, Home Depot have double-digit size teams working on augmented reality,” Wright notes.
Another misconception about the metaverse: It’s just for Gen Z and Millennials.
Yes, Wright says, “you may see shorter-term benefits with younger demographics who are already used to augmented reality and virtual reality technology.”
But, although younger consumers tend to be the biggest video gamers and tech pioneers, many Gen Xers and boomers are eager to join the metaverse—to buy things, have fun, and socialize.
A 2019 Ericsson ConsumerLab study found that seven in ten “digital seniors” (boomers aged sixty-five to seventy-four who use the internet) were interested in at least one type of VR/AR service.
They typically wanted to use the metaverse to learn a new skill or hobby, decorate their home virtually, “travel” with a headset, try out sports, or play VR adventure games.
Just a few of the large companies who’ve been active in the metaverse along with tech goliaths Meta, Google, Microsoft, Amazon, Shopify, Apple, TikTok, and (of course) Shutterstock—as well as newer players like Roblox (nearly fifty million users, primarily kids, enjoy the 3D digital experiences it builds).
Footwear, clothing, and accessory brands such as Nike (which bought RTFKT, the digital sneaker startup), Adidas, Gucci (which sold a virtual bag for $4,115), Ralph Lauren, Dior, Hermes, Balenciaga, Prada, Burberry, Louis Vuitton, and Warby Parker.
Beauty brands such as Procter & Gamble’s Pantene and Olay, Estee Lauder’s MAC, L’Oreal Paris’ Maybelline, Ulta, Sephora, Clinique, NYX Cosmetics, and Elf Cosmetics.
Gaming and Electronics Brands
Gaming-related and electronics brands such as Epic’s Fortnite, Sony (which has bought videogame maker Bungie for $3.6 billion), Samsung, Panasonic, Activision Blizzard (recently bought by Microsoft for $75 billion), Gamestop, Sandbox, and Nvidia.
Real Estate and Renovation Brands
Home décor and renovation brands such as IKEA, Wayfair, Home Depot, and Lowe’s. Auction house brands such as Sotheby’s and Christie’s. And, virtual real estate brands using blockchain technology such as Decentraland.
How to Get Started
So, what’s the best way for brands to dip their toes into the metaverse or plunge in more deeply? A few tips:
Start by learning all you can. Sign up for training videos from companies like Meta and Spark AR, take classes, and read articles about the metaverse.
Time.com now publishes a free weekly newsletter called “Into the Metaverse.”
Tap the talent of your partners or hire a metaverse professional. Your media agency might be helpful, as may a company that turns 2D brands into 3D digital ones.
See how your competitors and customers are using the metaverse. This will be a good indicator to help you decide on the best timing for your brand, Balis says.
Figure out which elements of your customers’ journey and partner vendors’ journey lend themselves to the metaverse. What will save them time or hassle, or enrich their experience?
“Customer service has been shifting to virtual applications” due to the pandemic, Balis notes. “You can set up a virtual store or a virtual service center where you could have interactions with your customers and help them configure their products, get technical support, or schedule appointments. All of those interactions could take place avatar to avatar.”
Also, your customers could become brand ambassadors for you in the metaverse, as their avatars employ social sharing to spread the word.
But, since VR often require customers to have headsets and the audience using them is fairly small, Balis adds, “That’s probably not the world where I would choose to set up my virtual shop or service center or branding experience.”
Try small, limited, inexpensive metaverse tests. If you decide the metaverse isn’t right for your brand, says Wright, “You can always go back to what you’ve been doing before.”
The Metaverse’s Prospects by 2030
Many experts believe we’re at the infancy of this virtual world. Intel’s Raja Koduri has said “the entire plumbing of the internet will need major upgrades” for the metaverse.
“It’s still frontier technology, to be honest,” Wright says. “So, anyone considering it today is on the early side of things, which is great because you want to be proactive, rather than reactive, when it comes to innovation.”
The precise ways the metaverse will look and feel by 2030 is anyone’s guess.
Still, metaverse mavens believe that AR will be as widely used as the smartphone. Meta’s Zuckerberg expects VR headsets and AR glasses to be ready for heavy daily mainstream use by 2030, according to The Conversation.
Similarly, The Future Today Institute’s Director of Consulting, Melanie Subin, told The New York Post she thinks “a large proportion of people will be in the metaverse in some way” by 2030.
Right now, however, some giant companies are losing serious money investing in it. Meta’s foray, for example, cut its quarterly profit by 8% and led to the largest one-day value drop in stock market history.
Looking towards metaverse 2030, though, Wright is confident that immersive e-commerce will be “the number one way we shop online and experience-heavy.” The metaverse, he adds, “will be better five years, ten years, thirty years down the line. So, it’s best to be prepared for that future.”
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Cover image via is.a.bella.