Making it on the metaverse
What do brands need to about the metaverse’s current and future role in communications, customer connections, marketing and brand awareness? David Craik investigates
Popping down to the high street is proving to be a different experience in 2022. This isn’t the main street of old anymore, with its grocers, butchers, identikit clothing brand stores and the ever-present person feeding the pigeons.
This is the metaverse; a completely manufactured virtual reality space that blends the computer with the individual.
The examples of brands engaging with their audiences through a digital universe are abounding. Fashion brand Forever 21 is a prime example of how the retail experience is embracing the future. It has recently teamed up with metaverse focused Virtual Brand Group and Roblox to create a game called the Forever 21 Shop City experience where users – or at least their virtual avatars – can build and operate their own personal stores. They can also buy and sell Forever 21 clothes, hire employees, manage inventory and decorate storefront windows.
Sportswear giant Nike also has a space on Roblox called Nikeland where users can play games and find sometimes exclusive collections of shoes, clothes and accessories which their avatar can wear on the site. In December 2021, Nike also bought non-fungible token (NFT) collectibles studio RTFKT to allow users to buy virtual sneakers to wear in the virtual world.
Estée Lauder teaming up with female artist Alex Box to create an original NFT based around its Advanced Night Repair product. According to Estée Lauder’s press release users on metaverse website Decentraland can step inside the 'Little Brown Bottle’ to unlock a digital badge and claim one NFT wearable that gives “avatars a glowing, radiant aura.”
Aside from putting some oomph and excitement into a brand and engaging with younger users, the rush to the metaverse is clear when considering the growth forecasts.
A recent report from Citi, ‘Metaverse and Money,’ declared that the metaverse may be the next generation of the internet. It would combine the physical and digital worlds in an immersive manner with use cases including everything the internet is already used for today like gaming, e-commerce, art, media, advertising, smart manufacturing, health care, virtual communities and social collaboration.
A device agnostic metaverse, the report said, would be accessible via personal computers, game consoles and smartphones, resulting in a large ecosystem. As a result, it indicates that the total addressable market for the metaverse could be between $8tn and $13tn by 2030. Total metaverse users would number around five billion.
“Tell me a sector which is hotter than the metaverse right now. There is none,” says Justin Hochberg, CEO & founder of the Virtual Brand Group which helps firms – such as Forever 21 – build, operate and monetise the metaverse. “The Citi projection of $13tn is much larger than the valuation of Apple and other big tech firms and just shy of the US economy of $20tn. The marketplace is huge, and the opportunity is at the beginning.”
He says every brand should be looking at gaining exposure to the metaverse. “If I said to you today should my media publication or should my doughnut shop have an e-commerce strategy, there would be no doubt at all,” he says. “It may not be understood well enough, but we are exactly at the same point with the metaverse. If you are not spending time trying out aspects of the metaverse you are building an opportunity for an existing rival or startup to leave you in the dust.”
"You don’t have to be consumer-focused either. An insurance brand can go on to Decentraland and plant a seed for the next 10 years. Why not? It is there for you to shape it."
To get onto the metaverse there are various options, from creating virtual stores or experiences on Roblox or Fortnite, to creating virtual structures and experiences on 3D sites such as Decentraland, or creating NFTs representing your brand, sponsoring events on the metaverse and, like Nike, making acquisitions.
Another option is to create a virtual office. That’s precisely what the Vice Media Group (VMG) has done on Decentraland. It brings employees together from multiple VMG businesses, like creative agency Virtue Worldwide. Clients and collaborators can meet for briefings, presentations and in-situ demonstrations of recent projects. “We will experiment together at the office on NFTs and Web 3.0 and apply these insights directly for brands eager to make an impact,” says Morten Grubak, global executive creative director of innovation at Virtue. “We will learn by doing and finding out what works and what doesn’t. Any client can contact us, and we will help them build a roadmap for the metaverse and get into this space.”
But brands have to have a clear strategy in order to reap the rewards of the metaverse.
Hochberg sees benefits for brands such as creating new revenue streams through avatar merchandise either replicating what is currently sold or creating new product categories. He says brands should consider marketing to existing and new customers while driving traffic from virtual to physical stores and back again.
It is also about communicating with customers of new demographics or geographies by giving them exclusive experiences such as events or games. But it’s not solely a one-way conversation, customer analytics can glean insight as to how people are shopping and living in a virtual world.
“It’s not just about virtual reality. It is how brands can tie their virtual and physical worlds together,” Hochberg says. “It’s about improving the customer journey where instead of silos, e-commerce talks to live events or physical stores. It is a joined-up strategy where if you are in a Forever 21 store and you bought an item, on the bottom might be a code to go on to Roblox to give you an engaged gaming experience. If you win that game then you receive the reward of another code to go to the e-commerce site to buy a limited-edition item or get access to an event. The point is to keep you engaged with your brand.”
Another example of this physical and virtual blend is at Selfridges, where customers could buy digital artworks NFTs in its London flagship earlier this year.
Virtue has its own experience of successfully helping Coca-Cola launch its limited edition ‘pixel-flavoured’ Zero Sugar Byte. Customers can buy the can in physical stores and then access a branded island called ‘Pixel Point’ in Fortnite where they can play games related to the product.
“Most traditional campaigns have a three-month or six-month strategy but with NFTs and the metaverse you have to go even further,” Grubak says. “How do you make it survive, reactivate it and create a community around it?”
Jaime Mougan, associate strategy director at Ogilvy, agrees that brand strategies need to learn the new code of the metaverse. “You have to have meaningful, valuable interaction and communications with customers. They want to know what you can do for them in this space. Just saying ‘Hi we are here,’ isn’t going to work,” he says. “People on the metaverse are expecting an experience and a collaboration. They are early adopters and creating these platforms themselves. You as a brand can’t come in and try to change everything. Users need to have a say, a one-to-one equal relationship, and you can empower them with exclusive events and other rewards.”
Hochberg adds that brands need to “start now, iterate, innovate and explore. The long-term strategy is what can I do in the next six months. There are no barriers, no infrastructure costs. If you don’t do this, then in 18 months you will be a loser and leapfrogged.”
But others say brands need to be careful.
Grubak says companies should not rush into the metaverse. “The failure can be much more damaging than the win in just getting in there,” he says. “You need a clear, well thought out commercial objective or the communities on there will punish you. Your strategy has to have a reason to be. You can’t have someone looking at an NFT in their digital wallet in two years’ time when there is just no use for it anymore. That will reflect badly on your brand.”
Mougan also urges brands not to go on the metaverse just for the sake of it. “You need to understand it and the objective you have, such as engaging with younger customers,” Mougan says. “You don’t have to be consumer-focused either. An insurance brand can go on to Decentraland and plant a seed for the next 10 years. Why not? It is there for you to shape it.”
What brands should also not do is expect to escape poor physical performance by engaging in the virtual world.
Adam Mogelonsky, partner at Hotel Mogel Consulting, warns, “The metaverse is not low-hanging fruit compared to dealing with labour issues and contending with travel recovery amid a possible recession. If the on-site experience isn’t good and physical in-human service is bad then nothing in the metaverse will matter.”
Grubak is confident brands will adopt the metaverse in large numbers. “In 12 months’ time the metaverse will be part of the output of every company. The different metaworlds will be like apps on your phone with brands shuffling and jumping around to establish themselves in this space,” he says.
That may be the case for many businesses, but the opportunity for brand engagement and communications through the metaverse is huge. Brands need to play it carefully but also be cognisant that early adoption could be vital for future success in this new sphere.