The metaverse: A virtual land of opportunity for business if we can define it
Everyone's heard of the metaverse - but what is it?
Last year, the concept of the metaverse exploded into popular consciousness following Facebook's re-branding as Meta and newfound dedication to paving the way toward a decentralised Web3.
Combined with exponential technological growth and the popularity of NFTs and blockchain-based cryptocurrencies, the result is an emerging interest in 3D online spaces that will supposedly redefine social life, societies and industries as we know them.
According to analysis by Reply Sonar, media interest in metaverse-related topics increased by more than 3% between June 2021 and June 2022. Yet, despite the hype, a recent YouGov survey revealed that just 37% of UK adults claim to be confident about describing the metaverse to others. Even experts working to bring the metaverse to market can't fully explain what the metaverse is and the potential it holds, but the market will eventually reconcile this as the applications of the metaverse evolve.
At Reply, we see the emergence of the metaverse taking place within three distinct types of experiences which have evolved in the digital space: Social, Commercial and Industrial. We've put our focus here to better understand current and developing practices in each sector and the business value they create.
Social metaverse: Metahumans - Virtual assets - Digital venues & third spaces - New social experiences
The social metaverse represents the next generation's social interactions, in which creators can build an inclusive digital world which fosters meaningful connections with others. This new digital world will revolve around decentralised identity and ownership, including interoperable and immersive 3D environments, "phygital" spaces, digital marketplaces and investments, virtual goods, and photorealistic avatars, all of which will be in the hands of creators to control.
The ability for users to portray themselves in whatever way this wish will drive investment into virtual assets and a decentralised ownership of NFTs, virtual goods and real estate, creating a new ‘tokeconmics' economy.
We are already seeing this trend develop - as of 2022, 65% of Gen Z consumers have spent money on a virtual item that exists only within the confines of a video game. Gen Z are trailblazing social interaction in the age of the metaverse, blurring the lines between entertainment and genuine human connections and creating new economic opportunities in the process.
Commercial metaverse: Metacommerce - Metaspace marketing - Analytics in 3D environments
The commercial metaverse will reframe human-centred customer experiences and impact how brands will design future offerings and customer journeys across various industries, by combining online and offline retail, reaching consumers via marketing in the metaverse, and adapting to 3D data feeds to develop new metrics and KPIs.
The future virtual economy will come to rival the importance of the physical one. Business leaders need to start thinking strategically about how to head into this new commercial metaverse, creating metaverse-only businesses, including virtual worlds and spaces as part of the marketing mix, retrieving real-time data, and expanding 3D analytics capacity via AI to include spatial data, biometric data, and sensor-based behavioural data.
As consumers spend time and money in the metaverse, brands are increasingly positioning themselves in these spaces with 30% of businesses expected to have products and services in the metaverse by 2026. Organisations need to consider if they are prepared for the tidal wave of data that is about to hit the shores of the marketing industry and not shy away from addressing safety issues and adhering to the ethical standards of these new digital spaces.
Industrial metaverse: Virtual collaboration - Next-level engineering - Augmented learning
The industrial metaverse will have organisations looking beyond simple remote meetings, moving to digital twins, and virtual trainings, new forms of virtual collaboration, next level engineering, and augmented learning. As organisations get acquainted with the metaverse, they will be able to use new technologies to offer immersive business meetings that include expressive avatars and realistic spatial environments, virtual products as blueprints for production, virtual market testing, and immersive, memorable and continuously improving training experiences.
The product development process of ideation, prototyping and testing for market can be significantly improved in the metaverse, moving to 4D collaborations and simulations. Workplace training can enter virtual settings, offering hands-on experience in a secure test environment and allowing organisations to easily onboard new employees and upskill existing ones.
However, enterprises must first consider whether there is actual business value in incorporating metaverse technologies into their business strategy, and if so, how to include meta-work and educate their staff to have the necessary skillset prior to implementation.
There are still some barriers to growth that must be addressed, from a technological standpoint, the expansion of the metaverse hinges on the scalability of spatial computing, internet bandwidth, and energy efficiency, as well as navigating interoperability protocols if we truly want to see a networked virtual world. Social and political issues of privacy, ethics, regulation, and overall acceptance may also present obstacles to mass adoption.
However, if these barriers are bypassed and the metaverse delivers upon its potential, the opportunities for business are staggering. Ignoring this technology is becoming an increasingly unwise option so decision-makers should put strategy in place now that will prepare their organisations to capitalise on the metaverse's growing importance.
Paolo Capitelli is director of communities of practices at Reply