How Can Brands Use The Metaverse to Their Advantage

With all the buzz surrounding the metaverse in 2022 finally realized, can brands and businesses capitalize on this upcoming trend?

(Image credit: searchenginejournal.com)

The metaverse, and its potential, are both some of the hottest topics in tech and fintech today. With companies such as Roblox, Adobe Systems, Nvidia, Snapchat, and Microsoft all invested in the concept, it is no surprise that investors and professionals are realizing the seriousness and value that the space truly has. Facebook even rebranded its parent company, Meta, to better be inlined with the opportunity.

This opportunity comes at an excellent time for many brands and businesses. With the bear market in full swing, companies are losing revenues and profits quickly. The grow-at-all-costs framework has all but disappeared for many businesses as customers demand high-quality, durable products and services. With the rampant inflation and less VC funding to be found, companies are looking for new ways to attract customers and investors to their brands. Innovation is proven to achieve both of these results; however, the approach of just quickly building a virtual mall or shop in the metaverse might be the wrong direction.

Unfortunately, the few brands already in the space have done a poor job matching the need of the consumer. Currently, 60% of shoppers have zero interest in buying virtual goods. In order to convince them otherwise, brands will have to offer a product or service so good that consumers will be drawn into the metaverse so they can explore those said products or services. This means that companies won't be able to just copy-and-paste their physical or digital stores into the metaverse and expect customers to flock to them as they might in the physical world.

With revenue from the metaverse expected to reach $800 billion in 2024, it is no wonder that organizations are acting fast to capitalize on this virtual market. However, the result of these companies jumping in with such intense speed is the loss of quality of these virtual products or services. Companies are not spending enough time analyzing consumer data and therefore aren’t making the best possible decisions or producing the best product or service that is in line with customer wants and needs.

With so much hype surrounding the Metaverse, it is essential to understand if that hype is genuinely warranted. If it is, then a couple of questions must be answered for one's business or brand.

1. How can my business or brand capitalize in the Metaverse?

   1. Will this come in the form of advertisement, product/service, or virtual real estate?

   2. Does my business or brand have the right product-market fit?

      1. Is there a virtual use for my service or product?

2. What do my customers/consumers want from the metaverse?

Currently, brands are doing an awful job aligning the metaverse with customer needs. It is apparent to many professionals and investors that brands are not listening to the consumer and instead creating a product they believe is the best fit. Failing to consider the customer is a grave mistake that can and will most likely produce a failing virtual product/service.

Right now, sustainability is very important in the eyes of the customer. Consumers are now often wondering about the why and how a said product is made. Consumers tend to avoid products that’ll end up in a landfill and instead prefer reusable or recyclable ones. Despite this, consumers say information on a product’s reusability and recyclability can be challenging to find.

“Their expectations can’t be met unless product information is managed with a strong P2C [product-to-consumer] strategy.” - Lisette Huyskamp, Chief Marketing Officer at Productsup

With consumers across all generations wanting more product information, it is best to understand how each generation wants this information to be presented and in what form. Gen Z welcomes the metaverse and digital-only shopping much more readily than their older counterparts. Similarly, Gen Z is much more likely to prefer information that’s presented via online comparisons or QR codes. On the other end of the generational spectrum, those 55 years or older tend to favor information that’s easy to find and contained within the physical product description itself.

Finally, customers tend not to want an “either/or” shopping experience; i.e., they want access to product information and deals that are accessible in both the metaverse and the store. Roughly an equal amount of consumers have indicated they’re more likely to buy a product if a deal is offered exclusively in a store vs. online, meaning that companies should offer coupons and sales in both physical and digital venues. Technology that blends physical and digital shopping is also welcomed. Consumers would make a purchase if they could access product information via a store’s mobile app while they’re shopping in person, for example. The use of augmented reality (AR) technology, such as smart mirrors and mobile filters, could also be used to motivate consumers at the store or on the company’s website.

(image credit: venturebeat.com)

The bottom line is that brands cannot just copy their digital or physical stores and paste them into the metaverse as many plan to do in the future. Brands need to offer the consumer something greater than is already provided to draw them into this experience. In order to drag customers to AR/VR, one must provide an experience that is attractive enough for a customer to buy or even simply be motivated enough to use the AR/VR infrastructure rather than just opening their browser and shop online.

To give them that added incentive, companies need to approach the metaverse with an entirely different mindset. Rather than providing consumers with a complelty immersive virtual experience as many brands have set out to do, companies should instead focus on blending the physical and virtual world together. This is what the data is showing the consumer wants and needs rather than a simple virtual store. If one is able to completely blend these two facets of the consumer experience (for example, offering coupons or sales in the virtual world for items in the physical world and vice versa), companies will provide a much better experience to shoppers and, in turn, draw consumers from all different background or generations to their virtual platforms. This will provide the incentive needed to get consumers to purchase or use the AR/VR infrastructure in the first place and also reach the older generations, who are less likely to want to explore the metaverse, unlike their younger counterparts. As stated previously, a virtual store isn’t enough to make a customer purchase an AR/VR set. Putting the customer first and providing them with an immersive experience that has them coming back is the top priority and goal for each brand. With the ideas mentioned above, a brand can really step up their product or service to not only compete with the best of the best (brands) but also give a product or service that consumers actually want and will use.