Does The Metaverse Still Hold Promise For Retail Brands?

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    Most marketers will remember a time not too long ago when it seemed like the Metaverse was going to be the next big thing for their industry.

    Like moths to a flame, brands flocked to virtual reality (VR) and popular online gaming platforms such as Roblox and Fortnite, eager to gain a firm foothold in what was then widely touted as the market of the future. was doing.

    For a while, excitement about the Metaverse bordered on cultural obsession. Books about the Metaverse were being published rapidly. Advertising conferences like Cannes Lions and Advertising Week New York have sparked conversations about the future of marketing in the Metaverse. This futuristic depiction of a virtual space was plastered on the cover of Time magazine under the headline “Into the Metaverse: The Next Digital Age Will Change Everything.” Mark Zuckerberg, his CEO at Meta, which he renamed the company a little over two years ago to signal a pivot around the Metaverse, said virtual experiences are “the next chapter of the internet.” I confidently declared my belief that there is.

    For many, that brief period of raucous excitement about the Metaverse may feel like a hazy dream memory. The situation changed rapidly. Rarely do we come across headlines where famous brands have invested huge sums of money into his VR-based experiences. Furthermore, with AI’s surprisingly rapid rise into mainstream consciousness, public interest in the metaverse (which remains a nebulous concept with no single universally agreed upon definition) appears to have significantly waned. .

    All of this can give many marketers a vague sense of whiplash. Is it possible that after so many brands invested so much time, energy, and capital into the virtual realm, everyone just forgot about it and moved on to the next exciting technology trend? There have also been some PR moments (for example, the bankruptcy of crypto company FTX led to widespread distaste for anything associated with the terms “decentralized” and “Web3”) and Mark Zuckerberg’s social (Unflattering virtual selfies shared on the media) Is it really enough to contaminate the entire Metaverse?

    Not everyone thinks so. Some marketing experts say that while public excitement about the Metaverse has definitely waned over the past year, it’s poised for a major comeback and retail brands are giving up hope for this virtual realm. I’m sure it’s better not to have it.

    Separating Metaverse mythology from reality

    Technology is unpredictable and often evolves in surprising ways. Let’s take AI as an example. Decades ago, it was common to believe that intelligent algorithms would soon lead to embodied robot assistants and self-driving cars, and those who said they would propel people into creative roles such as graphic designers or music. There probably weren’t many. Producers – out of the job market. Today, the incredible rise of large-scale language models (LLMs) has upended that expectation. We now have models that allow us to compose entire novels in the style of Tupac Shakur or Dostoyevsky, but we are still a long way from autonomous cars and household robots permeating households.

    Experts believe that the same principles of uncertain evolution apply to the Metaverse, and that even though the initial hype cycle has dissipated, the original dream of a hypothetical future for humanity still has great potential. Point it out right away.

    “I do not think so [the metaverse is] It’s a total lost cause,” says Jen Jones, chief marketing officer at Commerce Tools, a company that helps brands develop e-commerce capabilities. Most of all, Jones says he’s noticed a major shift in the language used to discuss virtual experiences. “Meta took over the term ‘metaverse,’ and the metaverse pretty much disappeared,” she says. “I don’t think this is a meta-metaverse.” [any more] – Everyone has had a bit of a hold on the language. ”

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    So what are people referring to when they talk about the metaverse these days? In Jones’ view, the concept refers to “the convergence of online and offline, physical and digital life.” [still] It’s a very hot topic, especially in the retail industry. ”

    The Metaverse has always had a special appeal for retail brands.Perhaps Meta’s name change in the second half of 2021 will trigger a number of major brands. From Walmart to PacSun to Lacoste, companies have begun launching virtual experiences, most often with some commercial element, such as fitting rooms where avatars can try on virtual products and purchase them in the real world. The market for virtual apparel and accessories began to soar as brands began to realize that young people were beginning to crave such products as a new form of personal expression.

    The Metaverse also gives us the freedom to explore new modes of personal identity beyond virtual clothing. There is no rulebook that says an avatar has to resemble a physical body. Kim Currier, principal marketer at Decentraland, says this is a key reason why young people (with a slew of brands in tow) are flocking to virtual environments. “Perhaps they identify as a different gender than their physical gender. They may be shy in the real world, but in the Metaverse they love to party. They need to show their face. Not having one allows me to be a little more free and creative with my daily grooming routine.”

    Jones, a mother of two, says she finds this freedom and fluidity appealing. “When she’s in the Metaverse, she has a really cool neon rave outfit and pink hair,” she says. “I can not do it [wear] It will be regular, but it will be a lot of fun. You want to have a blast at Coachella listening to some really fun music, but you’re probably just putting the kids to bed and not taking off your sweatpants. ”

    Jones, who is also a mother, said she was impressed by how excited her young children were to spend time on platforms like Roblox. “They’re into it,” she says. “Boys and girls, artistic kids, math kids, sports kids, they all love it…it’s their hangout.”

    Meta’s failure to meet Horizon Worlds’ user goals may have dominated the conversation about the Metaverse last year, and some may have concluded that the Metaverse was ultimately a rocket that failed to launch. No, but it’s easy to forget that. Platforms like Roblox, Decentraland, and Fortnite, which many would argue are as much a part of the metaverse as virtual reality, are still powerful. Roblox reported last week that it had approximately 70.2 million average daily active users in the third quarter of 2023, a 20% increase year-over-year.

    “As a brand owner, you have to think about where the next market is,” Jones says. Who are you trying to expand to? For those looking at Gen Z and below, this is where they belong. ”

    Inflection point (?)

    For now, the Metaverse may be populated primarily by children who play Roblox and play games. However, advances in hardware could soon change the situation and allow more people to participate in virtual environments.

    In June, Apple announced its long-awaited AR/VR headset, Vision Pro. It has a sleeker form factor than previous headset models, which tended to be blocky and quite uncomfortable, and can be controlled without handheld controls. This is also a deviation from the norm. But while its appearance may be appealing, its price ($3,499) may turn off many potential buyers.

    That same month, Meta announced the Quest 3 headset. The price is a relatively affordable $499. Zuckerberg described the headset as “the first mainstream mixed reality device,” referring to an experience that blends physical and virtual elements. The Quest 3 hit stores last month.

    If this new generation of headsets becomes popular with mainstream audiences, more headsets are sure to follow. Similarly, just as many brands launched their own apps in response to smartphone adoption, brands may also start building experiences around these headsets.

    Again, technology is evolving in unpredictable ways, and no one can yet say with certainty what the brand experience in the Metaverse will look like in a year, much less in 10 years. Still, the explosion of innovation in the AR/VR headset space has Decentraland’s Currier optimistic about the future. “With all the new technology coming out, we’re excited just to see what’s possible,” she says. “I think 2024 is going to be a big year for the whole universe.”

    Commercetools’ Jones encourages brands to stay aware of the metaverse, regardless of the fluctuations in the hype cycle. “Technology continues to advance,” she says. “Don’t get too involved in the bubble. But don’t get too discouraged by the trough that inevitably follows the bubble. Keep a realistic perspective and keep testing and learning.”

    Read more about The Drum’s latest in-depth article, ‘The New Retail Landscape’.


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