The metaverse. Everyone’s talking about it, but what exactly is it? Up until recently, this was a question that didn’t really have a definitive answer.
The metaverse is broader than just a single term and definitions do vary. The metaverse can be best described a concept where the only limits are the users’ imaginations. It’s a space that allows people to meet and interact with others in virtual reality and it’s widely regarded as being the future of not only social interaction, but business transactions as well.
There’s so much discussion happening around the metaverse and plenty of pro’s and con’s that need to be considered, but one thing’s for sure: you can’t afford to ignore it.
What is the metaverse?
It might seem like a completely new concept, but cast your mind back to the 1990s and early 2000s. Platforms like Club Penguin, Habbo Hotel, and Second Life were all used by millions of users to socialise in a completely virtual environment.
More recently we’ve seen the rise in popularity of video games like Fortnite and Roblox which have both created spaces that allow for users to hang out, explore and chat in a virtual space.
Facebook – or rather Facebook’s parent company, Meta – thinks that they can go one step further by creating an unparalleled immersive experience. The idea is to seamlessly combine our digital and physical lives and to allow users to become completely immersed.
Why do brands need to pay attention?
Because the metaverse is set to be more than just a social media platform. Some predict that in the future the metaverse will be used to augment our lives and improve the connections we have with our family, friends, and colleagues.
It’s entirely possible that the majority of business interactions and purchases will take place in the metaverse within the next decade. In fact we’re already seeing signs of this shift in behaviour thanks to the increased focus on digital self-service.
A 2020 report by Microsoft found that 86% of customers not only want a digital self-service option, they’ve actually come to expect it. On top of this, 54% of people say that they have a more favourable view of brands that are not only active on social media, but use these platforms to respond to their customers as well.
At the moment these statistics speak to the importance of implementing digital self-service solutions and an omnichannel experience. However it stands to reason that if your customers are beginning to show interest in the metaverse, then they’ll expect your brand to be present and active there as well.
On top of this, another section of the report found that when it comes to digital self-service options, many customers chose options such as chatbots and knowledge resources over options like video chat and co-browsing.
One of the main reasons behind this is likely to be because customers want to protect their anonymity and this is something that the metaverse offers. One of the benefits of self-service is that it allows your customers to do business on their own terms, and the metaverse is likely to capitalise on this.
How can businesses position themselves to embrace the metaverse?
According to a Gartner report, by 2025 organisations that offer a frictionless customer journey will see an uplist of up to 20% in their total revenues. Digital self-service is obviously already a key part of this, and any company considering a move into the metaverse should be striving to achieve this. We need to start thinking about the metaverse as just another digital self-service portal.
Like many digital self-service technologies, the metaverse is something that must be continually monitored. Trends change so quickly that it’s crucial for businesses to remain as educated as possible.
Gather feedback and assess which digital self-service options work best for you and your customers and use this data to inform your metaverse strategy. If, like the Microsoft report suggests, you notice that your customers value anonymity and prefer to engage in an more anonymous way then this is a good sign that the metaverse might be the right choice for you.
What are the potential opportunities and risks?
The opportunities of the metaverse are endless, with some estimates saying that it has the potential to become a million-dollar or even trillion-dollar economy. In fact, with some statistics suggesting that a total of around $100 million was spent inside gaming platforms on virtual goods in 2021, we might hit this level of value sooner rather than later.
It goes without saying that the economic opportunity for brands is staggering, but this does come with certain risks and responsibilities that businesses need to be aware of.
There are many questions that need to be answered around things like data, legal standing, and even identity. There are plenty of questions currently floating around such as, ‘Are you your avatar’ and even queries around how businesses are able to verify and authenticate identity. On top of this, there are also the age-old concerns about data and the security measures that will be needed to protect it in the metaverse.
Just like with the data you collect from your digital self-service activity, it falls to every brand operating in the metaverse to act as ethically and responsibly as possible – otherwise they face irreparable reputation damage.
Is it just another buzzword?
Like most things when it comes to the metaverse, the answer isn’t as straightforward as ‘yes’ or ‘no’. It’s a little bit of both and the only things that businesses can do is to position themselves to be ready for the future.
Although it’s still early days for the metaverse, the results from the last couple of years are concerning to say the least. Meta announced in February that its Reality Labs division saw losses of over $10 billion in 2021 which completed wiped out the $2.27 billion they gained in revenue.
These revenue figures are increasing year on year (revenues in 2019 were $501 million), but the problem is that losses are increasing at a much higher rate. And those losses are expected to be even worse this year, with Zuckerberg admitting that he expects them to ‘increase meaningfully’.
The second problem is that some estimates say that it could take Meta up to 15 years to realise their vision for the metaverse. If we see losses increase at this rate for the next decade then I think it’s safe to say that investors will be looking elsewhere.
So is the metaverse doomed to end in failure before it’s even really begun? Unfortunately, it’s really too early to say. The best bet for businesses is to ensure that they’re educated and positioned to take advantage of the opportunities that it could potentially bring. Take the time to learn about the metaverse and consider how it could be incorporated into your digital self-service strategy.
It’s important to note, however, that you shouldn’t discount all of the existing digital self-service channels that work for you and your customers currently. Who knows what the world will look like in a decade, but for now I’d say that it’s probably not quite time to put all of your eggs into the metaverse basket just yet. Instead, an omnichannel approach certainly seems to be the way to go.