The next digital frontier
From million-dollar acquisitions of virtual land to daily speculations on stock value; the metaverse is ever present in tech headlines. A wide range of companies are starting to see the benefit of establishing a presence in the metaverse. Find out how the metaverse can supercharge sales and create favorable brand impressions.
Meta (formerly known as Facebook) has re-branded itself to signal the advent of a new digital age – the metaverse.
But what exactly is the metaverse? The term originates from the 1992 science-fiction novel Snow Crash by Neal Stephenson. Today, it is being used to refer to a hypothetical version of the internet which will be groundbreaking for its fusion of digital and physical reality.
“You can think about the metaverse as an embodied internet, where instead of viewing content — you are in it”Mark Zuckerberg, CEO of Meta
The metaverse is expected to operate and expand on augmented reality (AR) and virtual reality (VR) technologies to create an immersive virtual world. Users will be able to play, work, socialize, and engage in a wide range of interactive, recreational, and commercial activities in this new digital space.
Meta does not hold the monopoly on metaverse development; Roblox and Epic Games are among the gaming companies creating their own iterations. As this new frontier approaches, many others will likely invest in its research and development.
Nike launched Nikeland on Roblox – a 3D virtual space for users to connect with one another, compete in mini-games, and try on Nike apparel and products.
Luxury fashion house Balenciaga opened a virtual boutique on the Fortnite gaming platform so that players can buy digital Balenciaga apparel for their avatars.
These types of virtual experiences can attract a broad consumer audience to build brand recognition, increase top-of-mind awareness, and help brands stay digitally relevant.
XR technologies enhance brand personality
With Metaverse technology still being developed, taking a closer look at some of its critical components will enable an assessment of its commercial potential:
Augmented reality technologies: users superimpose computer-generated imagery on to a real-world environment
Virtual reality technologies: users immerse themselves in a simulated environment through a wearable device
Extended reality technologies: encompasses all forms of computing experiences that allow the mixing of the real and the virtual. This term is inclusive of technologies which currently exist (such as AR and VR) as well as those which have not yet been created.
AR/VR technologies are being increasingly leveraged by brands for marketing purposes. Their interactive and vivid nature make them excellent advertising mediums. Augmented and virtual reality create stronger brand personality impressions and generate more positive brand attitudes than traditional 2D advertising.
In a Belgian study, 160 participants were shown either a 2D video advertisement of athletes rock climbing in Yosemite National Park or used a VR-enabled app which let them feel like they themselves were rock climbing in the Park. The content was similar (scenery, background music, duration) in both advertisements.
And yet, the virtual reality induced differences in brand personality impressions. It evoked stronger perceptions of brand excitement and sophistication than the 2D. The virtual reality respondents also displayed significantly more favorable attitudes towards the brand and reported much higher purchase intentions.
Why do XR experiences increase sales?
The commercial benefits of augmented and virtual reality extend beyond their exciting marketing prospects. Retailers can use these technologies to enable their customers to interact with products in 3D, and to play around with them in different environments. These XR experiences can strengthen consumer connections to products and increase purchase confidence.
Hasselt University and Vrije Universiteit Brussel conducted research to determine whether viewing products (a vase or a chair) on a laptop, tablet or through an augmented reality mobile application would impact perceived ownership of the items.
The participants who interacted with the products in augmented reality reported a significantly higher sense of ownership than those who viewed them on the laptop and tablet. This in turn led to a much more positive product attitude and increased purchase intentions.
US retailer Macy’s in-store VR furniture visualization – which provides 3D visuals of furniture in different living spaces – produces similar results. When customers use the virtual reality function the average value per transaction increases by 60 percent.
“You are seeing more expensive items being purchased because you are more confident in your purchase”Mohamed Rajani, Director of New Business and Innovation at Macy’s
This confidence appears to be well founded since the return rate for such purchases is lower by 25 percent on average.
These insights are valuable for many industries, particularly those selling big-ticket items such as houses and cars. In fact, certain real estate agencies have already begun using virtual reality technologies to sell properties. These experiences allow prospective buyers to better visualize properties remotely. In virtual open houses, clients can also create color schemes and select furniture according to personal preference.
The automotive industry has likewise started to recognize the profitability in extended reality client experiences. In October 2021, Hyundai Motor set-up the Hyundai Mobile Adventure on Roblox, which provides a platform for users to virtually drive new Hyundai vehicles. Customers are able to familiarize themselves easily and quickly with all sorts of car models before they even enter a dealership.
The metaverse will create a common space for all types of virtual commercial activity to be centralized. Since users will be able to interact with one another in the metaverse, they will be able to take part in group experiences without leaving their own homes. The innovative metaverse platform will thus allow participants to – collectively or individually – encounter all kinds of unprecedented AR/VR experiences in a new environment.
Should we be concerned about the metaverse?
The creator of proto-metaverse Second Life, Philip Rosedale, insists that developers still need to overcome many technical hurdles to build a fully-fledged metaverse.
Second Life is a web-based alternative reality platform which replicates the real world virtually. Users create and manipulate avatars to experience life digitally. Second Life is largely considered to be a primitive version of the metaverse.
As Meta confirms, ‘it [the metaverse] won’t be built overnight. Many of these products will only be fully realized in the next 10-15 years. While that’s frustrating for those of us eager to dive right in, it gives us time to ask the difficult questions about how they should be built.’
With a new digital reality comes an old set of problems: privacy, safety, equity, and misinformation amongst them. Meta has announced a $50 million investment in global research to mitigate these risks.
Howard University has received some of this funding to launch a study into the history of diversity in IT. Their findings will be used to advise on issues of access and opportunity within the metaverse. Other research projects include Seoul National University’s examination of safety, ethics and responsible design, and National University of Singapore’s investigation into privacy and data use.
Another important consideration is the forecasted level of interest in the metaverse. In a recent survey of 2,200 American adults, only 32 percent indicated interest in Meta’s metaverse. It is notable, however, that younger age groups showed significantly more interest: 46 percent of Millennial and 44 percent of Gen Z respondents reported they were somewhat to very interested in the metaverse project.
If the metaverse will not be fully developed until 2031 or beyond, this delay in reaching the market could see a larger number of adults interested in extended reality technologies. Additionally, in a decade from now the digitally native younger generations will hold a bigger portion of global consumer segments and buying power.
There are many ways businesses can benefit from extended reality technologies. Not only can they re-invigorate marketing communication strategies, but they can also increase product and brand engagement, and boost customer sales. extended reality’s potential is likely to continue to surpass expectations with time and large investments. Businesses should begin implementing AR/VR marketing and sales experiences now, and keep an eye out for what these technologies offer in the future.
At Mantu, we are experts at leveraging new technologies to help our clients embody their vision. As pioneers of the AR/VR digital frontier, we are well positioned to guide and support our clients in integrating into the metaverse.
Learn more about our Digital Marketing and Experience practice here.