Part II: What does the Metaverse mean for brands?
Into the Metaverse & Web 3.0
In the previous blog, we briefly spoke about what Metaverse is. We say "briefly" because there is so much more to talk about Metaverse. In this post, let us talk about what the age of Metaverse means for brands and whether brands should invest in the Metaverse elements.
Let’s get straight to the point. Should brands invest?
Use-cases beyond gaming are already emerging. Brands such as Benetton have created a Meta-Physical world that mimics their physical spaces. Others like H&M and Nike have elaborate fantasy lands where customers can buy, play, experience, and interact.
One might contend that these brands are just riding the wave and soon this will be a thing of the past. We differ on this skepticism against the elements of the metaverse.
Why is there a low adoption rate in the B2B sector?
The reason behind low adoption in B2B brands is mostly because of the notion that:
1. This works only for a B2C brand.
2. Metaverse is only digital.
The lack of awareness and documentation of what the metaverse is, has affected the adoption rate. But like any other technology, as it develops, the number of takers increases. Think of the technology that we use today. It did not appear in a year or two. It was in the works for decades together. The Metaverse age is at a flex point and the direction it takes is tied to the collective actions of the stakeholders in the coming years.
In the age of Metaverse, the perspective of how we distinguish between a B2B and a B2C brand will have to change . This is the age that is customer-centric rather than business or consumer specific. Similar to B2C brands having a replica of physical space in the meta-physical world, B2B brands have digital twins of their labs. The B2C fantasy lands are B2B’s onboarding and conversation spaces. It all boils down to, “can we elevate the customer experiences.” A few of the adopters such as Accenture, Infosys and LTTS are already exploring this space.
Tech companies, VCs, start-ups and established brands had already invested more than $120 billion in the Metaverse and its elements in the first half of the 2022, more than double of what was invested in the whole of 2021. Factors such as advancement in technology and infrastructure, increase in the consumer-led brand marketing and marketplace readiness is steering the investor’s excitement.
Coming back to the question of should your brand invest? Metaverse has the potential to change the journey of brands, but the evolution of this revolution lies with the stakeholders. Users are already spending most part of their day on the internet or on devices that use the internet. They are already in the grid. It is entirely possible that most events, commerce and even learning could happen in the meta-physical space. It cannot be a substitute for in-person connections, but will act as an extension or complement the movement of thought that prevail in the real world. Eventually, with its potential to reach a value up to $5 trillion by 2030, it's a revolution that cannot be ignored.
What does this space offer?
The Metaverse age is where there is interoperability between the real world and digital world. That means we can replicate the entire real world into a digital space and use the digital space to power the real world connections. A few notable offerings are:
Immersive Remote Networking: As the tech evolves, we will see a new transition from audio and 2D screens into the 3D space further cutting down the gap in interaction. Imagine speaking to a client who is on the other side of the world but in your digital office or interacting with a group of friends on an island in the middle of the Indian ocean. This will enable conversation to happen across the globe, giving birth to numerous forums that can share ideas without distance being a worry.
Immersive learning and development: Real-life simulations in the digital space will help in the immersive learning process. It could be students in a virtual classroom, individuals learning about a product with the help of either AR or VR or even an AR app that guides you in the aisle of a supermarket. Immersive learning has proven that it increases the learning curve at the same time making it interesting, which is most important to organizations as well as institutions.
Commerce: As the web3 enabled meta-physical spaces evolve, the commerce on these spaces evolve too. We already have Nike making a sale of $185 million so far from their meta-physical space on Roblox. We have virtual fashion shows that fueled the sales of Dolce and Gabbana. The NFT art sector marketplaces have helped open up opportunities for many famous as well as budding artists alike. Soon we could have banking and other sectors as well, making the meta-physical space a channel for selling both virtual and real products.
Digital twins: Imagine harnessing the power of large-scale world simulation for industrial and scientific applications. Imagine the efficiency and cost reduction. Digital twins are the virtual replicas of the physical setting, that are perfectly synchronized with the real world. They are not only transforming the industry but are providing the organizations superpowers to simulate and optimize products in real-time, before going to full-scale productions. A few enterprises such as Siemens, BMW and PepsiCo are already exploring the possibilities of the new innovation.
What forms the metaverse?
Now, having explored the possibilities, lets understand what goes into making one. The space is made of 4 blocks: Experiences, Platforms, Technology and Enablers.
Experiences: By definition, in this case, this is essentially the primary use case of building the space. It could be an immersive application or a video, a meeting room or a networking environment.
Platforms: Platforms are categorized into creators platforms and discovery platforms. Creators platforms are core tools for building the above experiences. Discovery platforms, as the name suggests, are platforms that facilitate discovery of experiences.
Technology: Technology, an important aspect of building an experience is usually categorized into hardware/OS and infrastructure. Hardware devices such as VR glasses or AR enabled devices, and OS are the gateways for the users to access the experiences and infrastructure such as cloud, semiconductors, networks power the experiences.
Enablers: The fourth block and probably the most unseen structure that makes this space is enablers. Enablers are key factors for the function of the space and to maintain the ethical standards. Monetization, security, privacy and content moderation are as important in the space of metaverse as it is in the real world and to manage a digital identity or an avatar across different meta-physical worlds or applications and make sure that it is interoperable is a task by itself.
Challenges that we currently face
Is it all hunky-dory? Sadly not. We are in the initial stages of building a new age. Gaming is already social and gamers are aware of this new age innovation that is transpiring. But the challenge is convincing the people who do not identify themselves as gamers, to spend more time in the metaverse. And if that wasn’t enough of a challenge, the technology required to power this whole new age is still in its infancy. Due to computing limits, we don’t see the photo-realistic environment that we imagined or that we thought it would have. The network infrastructure is better than what we had 5 years back, but it still has issues such as high-latency and low-bandwidth causing the delay in accessing seamless content. Once 5G is established on a global scale, this issue should be solved. The hardware infrastructure to have a truly immersive experience is still in its nascent stage. The VR and AR devices are either bulky or expensive, and due to this we continue to access the experiences through the 2D screens.
But on the bright side, think of how much time it took for us to go from a press-button mobile phone to a touchscreen smartphone, from a dial-up connection to high speed internet, from 2G to 5G and from 16MB RAM to a massive 2TB RAM. Advancement in the technology space is in a never seen before turbo mode and has seen significant development.
Yes, we are not there yet, and there is always an option to completely disregard the metaverse, but that might result in a significant disadvantage. To have a competitive edge, this is the time to define the goals, to explore, to learn and adopt, to start identifying infrastructures and talents that are required. This is the time to develop business strategies to capitalize on the future, as it will have a major impact on our lives, both professionally and personally.
Finally, a collective action taken by us as stakeholders will shape this new age. And we are not just talking about the meta-physical worlds, XR etc. - we are talking about other technologies that are interrelated such as NFTs and other building blocks of web3.0.
To be continued in Part 03