How long until the metaverse reaches mainstream appeal?
How long until the metaverse reaches mainstream appeal?
Recent surveys since Facebook changed its name to Meta last November have found consumers have some interest in virtual experiences, including shopping, but that the metaverse concept remains foggy.
Strong interest has been seen around virtual travel, such as sightseeing tours, as well as seeing live music and sporting events virtually. A Morning Consult survey found 44 percent of U.S. consumers would like to create an avatar to represent them in the metaverse, with 31 percent wanting to buy virtual items for their character.
An Accenture survey of consumers across 16 countries found 42 percent had visited a retailer in the virtual world to get advice, make a payment or browse a product range when shopping for a physical item, while 56 percent of respondents plan to do so in the next year.
“In addition to new opportunities to sell, the metaverse can also help build loyalty through experiences that go beyond just buying a product,” said Jill Standish, global head of Accenture’s Retail industry group, in a statement. “For instance, retailers can create a personalized experience by offering a live-stream shopping event where customers can sit next to a brand ambassador, and then immediately be able to step into a virtual dressing room where they can try something on, add it to their cart, and check out.”
Nonetheless, a study by CommerceNext found the wide majority of U.S. consumers had little knowledge of the metaverse and only 18 percent wanted to engage with virtual worlds at all.
A survey of U.S. and U.K. consumers from automated insights platform Zappi found 69 percent had heard of the metaverse, but 55 percent claim they don’t understand what it means and only six percent were “extremely familiar” with the concept. According to respondents, the metaverse’s most significant appeal lies in gaming and socializing.
Ryan Barry, president at Zappi, said in a press release, “We saw a similar reluctance in the early days of online shopping on web 1.0, which indicates the need for brands to show what experiences in this virtual new world might look like, introduce clear propositions and demonstrate how consumers might benefit from the metaverse.”
- Consumer Interest in “Virtual Living” Intensifies, Accenture Survey Finds – Accenture/Business Wire
- New Survey Finds Almost 50% of Consumers Are Still Unfamiliar With the Metaverse – CommerceNext/Business Wire
- In the Metaverse, Live Concerts Hold More Appeal Than Live Sports and Shopping 45% of all adults would listen to live music in a virtual world, as would 56% of Gen Z and 61% of millennials – Morning Consult
- The metaverse has a problem: Consumers aren’t ready yet to shop and distrust the Big Tech driving – Zappi/PRWeb
- Metaverse: More Evolutionary than Revolutionary? – Morgan Stanley
Discussion Questions
DISCUSSION QUESTIONS: Where do you see the metaverse catching on initially? How confident are you that shopping and other everyday activities will become integral within the metaverse?
Poll
Loading …BrainTrust
Neil Saunders
Managing Director, GlobalData
Bob Phibbs
President/CEO, The Retail Doctor
The metaverse is not clearly defined – mainly because it isn’t one thing, it’s a collection of different things – so it is hard to assess people’s views on it. What is certain is that it will become more important. Functions like overlaying digital experiences with physical places have a lot of utility and will become more widespread. Deeper immersion, such as interacting in completely virtual worlds with avatars, will also grow but I doubt they will become as mainstream. And the idea that people will start to spend more on virtual world products than they do on real life products is nonsensical: the virtual world can’t provide for your real world needs like eating, warmth, shelter and so forth. That said, if people are spending more time in virtual spaces it is obvious that brands need to engage with those places and the consumers in them. What’s critical here is to know this is important but to distinguish hype from sensible predictions.
I agree that spending on “virtual products” will never overtake real products, however spending on real products virtually will increase. Shopping via VR rather than a laptop or phone may eventually begin to take up a share of e-commerce spending. McDonald’s patent filing includes using the metaverse to order food delivery, not virtual burgers, as one example. There is a startup named Americana which is working to turn physical objects into NFTs for sale as well.
Yes, I also think spending on real products virtually will grow. That is very different from virtual products like outfits for avatars. All that said, what needs to be avoided is gimmickry. Is creating a virtual supermarket and having someone traipse up and down the virtual aisles picking products really more efficient than the static websites most grocers have today? I don’t think it is. There also needs to be a lot more creativity in metaverse worlds – many of the retail stores brands have built are incredibly poor blocky pixelated reproductions of what they do in the real world. I am sure this will evolve, but there’s quite a lot of work to do in creating a compelling experience.
Neil, this is the best explanation of what’s happening in the metaverse that I’ve read. Thank you for bringing clarity — to me anyway. I think you’re 100 percent right that this undefined and evolving.
I think there needs to be more clarity as to where the physical landscape of the metaverse begins and ends. If consumers better understood when they’re in the metaverse versus using metaverse-native tech (e.g. VR) they could more easily visualize how it could become a part of their lives. I do think the metaverse is an inevitable fate for many of our behaviors, but it will still take a few years. Omnichannel behaviors didn’t really occur until 2020.
The experiences have to be organic and integrated with the physical world. The concept of live events in the metaverse has great potential. Imagine going backstage, seeing artists up close, and maybe even interacting with them. E-commerce in those contexts such as buying merchandise and advertised products is natural. It is probably three to five years away.
In the meantime, we will go through few gimmicky iterations like avatars etc., with no real value but a lot of novelty.
It’s early days for the metaverse and Web 3.0. Companies that are early adopters will use trial and error to find stickiness. Laggards and late adopters will watch before jumping in. Ultimately, the end-consumer will drive adoption. Companies and brands with a digital-first customer mindset are already there.
When talking about concepts like the “metaverse” it’s important to distinguish between “launched with initial interest” and “mainstream acceptance.” There are a lot of interesting technologies and applications for them that never get mainstream acceptance. At this point in time, the metaverse concept is primarily of interest to high-tech early adopters and business strategists worried about being blind-sided. I can’t imagine my mom doing her shopping in the metaverse any time in the foreseeable future, if ever.
The use of the metaverse will be gradual. It will accelerate as the younger sets of consumers have disposable income. The older groups will fade out before they ever set foot in the metaverse. The reason is that – like me – the metaverse is “cute” but not needed.
First of all, there is no “metaverse.” There is the internet, Web 3.0, virtual reality, augmented reality, and gaming technologies – all of which existed before Mark Zuckerberg tried to rebrand himself out of a PR nightmare. So if we are talking about those technologies with – as Elon Musk has noted – their less than optimum interfaces, the initial growth will be among those who have been operating in “the metaverse” for years now; gamers, younger people, and VR enthusiasts. I’ve been a big proponent if VR technologies for over 25 years. But the fact that they are well established from a technology perspective and still lack mass acceptance makes me somewhat bearish. Want to improve participation in what some insist on calling the metaverse? Make the interface easier, more portable, and more comfortable for the non-geek crowd. Then, as I’ve said for decades now, you’ll see people doing business there — wherever “there” is.
The metaverse has only limited use cases at this point where it provides significant value. Shopping is not one of those high value use cases. While many people want to supply these services, more people want to supply them than want to use them – a classic problem with digital efforts seeking a reason to exist.
Traditional retailers are fairly slow to move and the market hasn’t been fully established. However the groundwork is being laid as McDonald’s and Walmart, for example, have already filed patents for metaverse applications. Because of the slow adoption and general lack of clarity, applications will likely start from brands up. Beginning with more brand experiences rather than revenue building transactions. I also anticipate many B2B applications as Zoom fatigue is real.
As I understand what the metaverse is, I too believe it is best for gaming and socializing. But just think, if this takes hold in retail, we can close every store and still have an in-store experience.
The metaverse may represent the next frontier for engagement, interaction, shopping, entertainment, and an escape from reality. However the metaverse also means many different things to various people. Unlike Web 2.0, Web 3.0 and the metaverse have infinite possibilities. The metaverse will connect the physical and digital experiences in a way that is seamless and immersive in a way that will make it an integral part of our lives.
However the metaverse is in its crawl stage, especially in the West. In keeping with Maslow’s Hierarchy of Needs, people will still need to exist in the real world and ensure they have food, shelter, clothing, and safety. The metaverse exists in an arena where your responsibilities and needs have been met in the real world, and you want an engaging virtual experience in your free time.
The challenge and opportunity for companies is how to commercialize and capitalize on the unlimited potential of the metaverse. Just like the experience with social commerce, it will take time for consumers to adapt to this model and for brands to create authentic experiences.
Many of these “metaverse” press releases are retailers building a part in a gaming environment. Which is fine if you’re going after gamers. We already have the metaverse in many games on our phones so Neil is right. Many seem to think this will be like Second Life where avatars engage. PR about a burger joint opening in the metaverse is laughable since you can’t smell or eat but can exchange what you buy there for IRL product. Why not just buy IRL? #waitingforthehypetodiedownandseewhathappens
Entertainment is the shortest path to metaverse engagement. Experiencing concerts, plays, museum guided tours and the like. I don’t see retail and shopping gaining traction in the near future.
Very few people could define the metaverse, which means that surveys showing widespread approval are bogus. It’s coming, though, and retailers should be thinking about how to create “digital twins” online, where they can sell products and generate enhanced loyalty.
A good follow-up question, I think, would be: “How many people can define exactly what the “metaverse” is?”
(I suspect the distribution of responses — from “everyone” to “no one” — would be about the same as we see in the InstaPoll)
When Facebook’s Zuckerberg declared the company’s strategic pivot and renamed his company, Meta, he realized both the vast power of his brand and the existing and barely nascent momentum for the metaverse. He meant to create a new narrative and turn a leap of faith into a strategic commitment. The financial markets responded with doubt and concerns over the duration and the required investments combined with the uncertainty to realize. During the growth phases of the business cycle, optimism reigns, and bold bets are rewarded. The opposite is true during downturns: risk is averted, and capital-intensive aggressive growth strategies are punished. We are in that latter category. Mr. Zuckerberg and Meta’s ecosystem are stoking the Fear of Missing Out (FOMO) and want your company to jump on the bandwagon and help them develop the metaverse concept and benefits.
Retailers and other consumer-oriented companies need to stay apprised of the metaverse and its implications. But, they don’t need to dive headlong into the unknown because the metaverse will take much longer to develop as a living concept, but it will scale quickly once it hits an inflection point several years from now. Still, the metaverse will not be the sole or primary consumer option or model of engagement. Today’s FOMO makes no sense, but small well-thought experiments do.
It took a global pandemic for the average consumer to figure out online grocery shopping is a thing; and to actually try it. The world is far from figuring out the metaverse, even farther from meaningful metaverse commerce.
Still, and as always, there are the early adaptors like gamers who will nurse this virtual space until it makes sense for the rest if the world. For brands and retailers who want to be on the cutting edge of tomorrow, consider the metaverse a long game incubator.
I recently posted about the opening of the Meta store on my Forbes.com contributor column. My conclusion: “The metaverse is more than just an incremental change or even a breakthrough technology. It will touch businesses and people’s lives in ways that are as yet unimaginable, but coming at the virtual speed of light.”
When disruption strikes, some brands do it right the first time and continue to flourish over time. The rest simply vanish! Similarly, the metaverse might be the next big thing if marketers can find a way to gently engage their customers in it. At the moment, I’m seeing a lot of firms create marketing campaigns that overlap their product offerings with the aspirations of their customers. I think the brilliant minds of marketing will adopt similar strategies to incorporate the metaverse into their customers’ daily life without them even realizing it.