In a recent McKinsey survey * – 79 % of respondents said they have already made a purchase in the metaverse through virtual platforms with –
A. 47 % indicating they made in-game purchases
B. 37 % buying virtual cosmetic items
C. 33 % saying they purchased real-world items that were offered through virtual platforms
According to forecasts, businesses and consumers annual global spending related to the metaverse could reach $5 trillion by 2030 – of which E-commerce is expected to be $2 trillion to $2.6 trillion and virtual advertising will make up another $144 billion to $206 billion. By comparison, spending associated with artificial intelligence totaled $93 billion in 2021.
With the significant potential in the metaverse to expand capabilities and opportunities, many investments are being made to provide immersive experiences where visitors can interact, shop, play, learn, etc. In conjunction with this, the metaverse is expected to encompass five types of daily activities : gaming, socializing, fitness, commerce, and remote learning. Further, people indicated that connecting with others is their # 1 interest.
Brands experiments in virtual worlds reveal that marketing and advertising to consumers in the metaverse going forward will probably require different marketing skills – to deliver a great User Experience that is entertaining, interactive, rewarding, etc. with captivating visuals and audio effects to be very engaging – as with recent videogames, movies, TV series, etc.
An example is Chipotle Mexican Grill Inc. having run two metaverse campaigns in collaboration with Roblox (the online gaming platform). One was a 2021 Halloween-themed project called Boorito in which users who visited a virtual store received a code for a free real-world burrito. Extending on this, an April event let consumers roll virtual burritos to earn in-game currency – that could be traded for real food. As noted by Chipotle Chief Marketing Officer Chris Brandt, the potential benefits of providing new ways to be relevant and exploring new opportunities in the metaverse outweigh the risks. While the metaverse can be confusing, it gets a lot of publicity and attention and has significant potential. So, while there aren’t a lot of people there – but with many of our consumers having kids on Roblox, there are opportunities. Further, from a business perspective, Mr. Brandt said the approach is “ We’re not jumping in and spending $5 million on this burrito [game] – let’s spend $100,000 and see what happens ”. The two games attracted six million unique users, many of whom also signed up for Chipotle’s rewards program + “Boorito” daily sales totals surpassed those associated with past years’ Halloween campaigns in the physical world, he said. As a result, while Chipotle has allocated only a small portion of its current marketing budget to the metaverse, larger commitments will occur in the future.
As a result of these and other initiatives, 95 % of Executives believe the metaverse will have a positive impact on their respective business and industry in 5 to 10 years. Further, 25 % said XR opportunities are expected to drive 15 % of their organization’s total margin growth in five years.
In another metaverse case study, Authentic Brands Forever 21 does “ twinning ” where people wear the same clothes as their digital avatars. Forever 21 sold a black beanie in its store after it became popular on Roblox. This recognizes “ The metaverse is all about self-expression, so being able to wear identical outfits in the physical and virtual worlds is a trend that we believe will continue to grow,” said Jacob Hawkins, Chief Omni, Marketing and Commerce Officer at Forever 21.
While the number of use cases is growing, with XR being new and 31 % of Executives uncertain about the ROI of metaverse initiatives, many Brands are tempering their expectations and investments in XR – to gage when mass consumer adoption occurs, said Mike Proulx, VP and Research Director at Forrester Research. Further, he noted “ The linchpin is everyday people being convinced the metaverse will complement or enhance their daily lives ”.
* Survey of 3,104 consumers in 11 countries and a poll of C-level executives at 448 companies in 15 industries and 10 countries.
Sept 2, 2022 CAIL Innovation / XR commentary www.cail.com firstname.lastname@example.org