What new opportunities does the metaverse present for product and services companies?

What exactly is the metaverse?

To understand the opportunity, we first need to agree on what the metaverse is. The concept will evolve, but we would describe it as follows:

The metaverse is an umbrella term for a range of virtual environments – accessed via screens or headsets – in which multiple parties, represented as avatars, can interact and transact. In most cases, these environments are ‘persistent’, ie any change you make or ownership you acquire remains when you leave.

Practically, these worlds are made up of an immersive front end – a 3D virtual landscape – and a backend infrastructure that validates transactions using tokens and blockchain to confer permanent records of ownership.

What are the business opportunities in the metaverse?

For product and service providers wishing to take advantage of this, there are two overlapping avenues. One is to build virtual equivalents of products – eg, a car or a sneaker – that can be used in the metaverse. The other is to buy ‘land’ and build your own space – a shop, a stadium, a village – where your customers can buy your products or experience your services.

So, a sneaker company could offer a virtual add-on that let’s buyers wear the shoes – with all the status they represent – as they go about different activities in the metaverse. But the digital world also offers the potential for more functionality – perhaps wearing a particular brand gives entry to exclusive virtual events, thus increasing its value in both worlds.

You can also set up physical shops to sell or showcase your products. The beauty of this virtual world is they can be anywhere – why sell luxury handbags in a busy high street when you can sell them from a tropical beach? Likewise, B2B companies could create virtual showrooms to demonstrate high value equipment that would be hard to bring to a customer.

Or you may want to branch out into whole new areas. We have seen sports brands offer fitness subscriptions via apps; the next step for them could be virtual fitness studios in the metaverse, where users can work out, buy clothes, and sit down with experts such as nutritionists or personal trainers.

How to grow your business in the metaverse

So, how should products and service companies – who are not themselves tech companies – go about benefitting from all this?

The most important driver of success will be a value-focussed strategy. Don’t just jump into the technology without a plan. Decide what you are trying to achieve from the metaverse.

For example, you could:

• Create virtual versions of existing products and services that you can sell in the metaverse
• Create virtual shops and showrooms to sell your real-world offer in more immersive ways
• Reach a new generation of customers
• Create complementary services that generate new revenue streams
• Build virtual spaces, events, or communities where you can gather your audience
• Form partnerships – eg, with virtual event promoters – that allow you to increase your exclusivity by giving your customers unique offers or opportunities

Right now, the key will be experimentation. No one knows exactly how the metaverse will settle, so now is the time to get hands-on with the metaverse, brainstorm ideas for your business, test a few hypotheses, and develop proofs-of-concept for the most promising.

Even if you don’t see high potential use cases immediately, they will come as you experiment and see what works. Like digitalization via IoT, products in the metaverse create the opportunity to collect detailed data on how users engage with your offer, allowing you to continually test and refine, kill failing projects quickly, and spot behavioral signals that hint at new opportunities.

Experimentation with new and unproven technology may sound risky and costly. But there are a lot that can be done cheaply at first. And if the tech revolution taught us anything it is that focused experimentation and failing fast is the route to new revenue. You will pay one way or another – through the cost experimenting, or the cost of falling behind.

Don’t be afraid of the metaverse technology

A major risk for companies is that they will focus on the technology and get bogged down in technical complexities and end up with no use cases. We urge you to focus on the business case and trust the technology will support it.

Metaverse tech is less complicated than it sounds. The building blocks – both of the virtual worlds (eg those provided by Unity or Roblox) and the contracts for virtual transactions – are becoming simpler and standardized. For more sophisticated offers, there is a growing pool of experts who can customize both. Decision makers should immerse themselves in the metaverse to get familiar with the possibilities, then contract technical people to make it happen.

It is true that the metaverse still needs to mature. Right now, there are many sellers of digital land (eg, Decentraland, Sandbox) and knowing which one will be right for you is hard. This shouldn’t hold you back from picking the one that seems to be popular with your audience and experimenting. This will stand you in good stead as the industry evolves, and our prediction is that they will soon become interoperable, allowing your customers to take your virtual car or trainers between worlds.

The next killer app

Most of the ideas discussed above are ‘lift and shift’ – taking something that exists and creating a metaverse version. There are many examples already happening, and it is likely that most big businesses will have some metaverse offer by 2030.

But the big opportunities will come from the things we haven’t even thought of yet. We don’t know what those are, any more than the early internet pioneers predicted Facebook or YouTube. But as a culture of innovation grows in the metaverse, someone – maybe you – will come up with the next killer app that changes the world.

To discuss the opportunities or ideas outlined in this article, please contact the authors.