The Booming of the Metaverse and Its Impact on the Next-Generation Marketing Strategies

The concept of the metaverse, originating from science fiction, has now become a hot topic of discussion in the realms of technology, investment, and even the retail industry. The term “metaverse” in English refers to “beyond the universe,” indicating a shared, persistent, 3D virtual space that connects into a perceptible virtual universe. In this universe, people can participate in various interactive activities such as work, gaming, shopping, and socializing using digital avatars through devices like headsets and computers. Works like “Ready Player One,” “The Matrix,” and “Sword Art Online” provide us with vivid and intuitive experiences to understand the concept of the metaverse. By the year 2030, the new generation of Millennials and Generation Z individuals will gradually reach adulthood and enter the workforce, expected to constitute the vast majority of consumer populations. This demographic has grown up in a digital, interconnected, and social media-driven environment, exhibiting high acceptance of technology and seeking personalized, values-driven, and socialized consumer experiences. To effectively engage this new generation’s consumer base, it’s crucial to understand the current fervor around the metaverse concept and its implications for personalized marketing strategies.

The Impact of the Metaverse on Marketing

The metaverse is not just a technological innovation; it represents a significant transformation in the field of marketing, providing a new platform and approach for interaction between brands and consumers. Firstly, it redefines the landscape of marketing content. In the metaverse, marketing content goes beyond traditional advertisements and social media posts. Brands can create fully immersive environments and experiences, allowing consumers to explore products and services in a whole new virtual world. Nike, for example, has redefined its marketing content scene by creating “Nikeland” on the Roblox platform, as shown in Figure 1. In Nikeland, users can engage in virtual sports events and games while wearing Nike products. This not only increases brand exposure but also allows consumers to experience Nike products in a completely new way.

Figure 1. Nike Creates the Virtual World of Nikeland on the Roblox Platform

Secondly, the metaverse reshapes the “what you see is what you get” marketing concept, expanding it into a new, virtual, and enriched dimension. The core elements of the metaverse—trusted asset value, decentralized identity verification, and the replication and enhancement of the real world in the virtual world—combine to create a parallel virtual environment to the real world. This environment not only reproduces the identity and asset value of the real world but also extends and enhances them in many aspects. In the metaverse, virtual goods and assets achieve value authentication and transactions through blockchain technology, enabling transactions and collections in the virtual world. This technology ensures the scarcity and uniqueness of virtual assets, thereby giving them real economic value. Through blockchain and digital wallets, users can maintain anonymity or semi-anonymity in the metaverse while guaranteeing the authenticity and uniqueness of their identity. This allows users to freely explore, transact, and socialize in the metaverse without worrying about privacy breaches.

Thirdly, from shaping value to co-creating value. The interactivity and participation on metaverse platforms facilitate a shift from unidirectional value shaping to co-creating value. Brands and consumers can jointly participate in product design, experience creation, and value sharing in this virtual space, forming a new consumer relationship and brand loyalty. For example, fans can prove their loyalty to creators by holding NFT artworks, or individuals can create personalized digital assets in the virtual world to commemorate precious personal memories. As we move beyond individual NFTs into more programmable experiences, some digital assets can be seen as gateways to valuable collaborative communities, where communities use and reward combinations of individual skills towards a common goal, some communities functioning as decentralized autonomous organizations.

Combining the upgraded marketing strategies with the metaverse, retailers can adopt the following tactics to fully leverage the opportunities brought by the metaverse, providing innovative consumer experiences and driving brand growth:

  1. Create Highly Interactive Virtual Stores: Retailers can establish virtual stores on metaverse platforms, not merely replicating real-world store layouts but creating a completely new and highly interactive shopping experience. For instance, using virtual reality technology, consumers can “step into” the store in a virtual space and personally select and try on clothing items.
  2. Utilize Virtual Goods and Limited Edition Products to Attract Consumers: Selling unique digital collectibles or limited edition products in the metaverse can capture consumer interest and stimulate purchasing desire. These virtual goods can not only be used within the metaverse but also ensure their scarcity and uniqueness through blockchain technology. For example, Nike sells digital sneakers through its NFT platform “CryptoKicks,” where consumers can purchase, collect, or wear these unique digital products in the virtual world.
  3. Provide Personalized and Customized Experiences: Leveraging the technology of the metaverse platform, retailers can offer highly personalized and customized products and services. Consumers can customize products based on their individual preferences, such as the color and style of virtual clothing, creating truly unique and one-of-a-kind items.
  4. Utilize the Metaverse for Brand Storytelling: The metaverse provides a unique platform for brands to tell their stories through virtual events, experiences, and interactions, enhancing brand image. Through this approach, retailers can not only showcase products but also convey brand values and culture. Inspired by this, traditional luxury giant Gucci collaborated with emerging gaming company Roblox to launch the Gucci Garden experience. In this virtual space, users can try on and purchase limited edition virtual Gucci clothing. This experience reshapes consumer shopping expectations, telling the brand story through virtual art exhibitions and providing an immersive brand experience (refer to Figure 2).

Figure 2. Gucci Garden Virtual Art Exhibition Hall.

Through the strategies mentioned above, retailers can fully capitalize on the opportunities brought by the metaverse to provide consumers with unique and appealing shopping experiences. The metaverse not only offers new growth points for the retail industry but also enables a deeper connection between brands and consumers. With the continuous development of metaverse technology and platforms, retailers will have more opportunities to innovate their marketing methods and enhance brand influence.

Potential Challenges and Impacts of the Metaverse

The rapid evolution of the metaverse concept inevitably brings new societal changes and potential challenges. Privacy and data security: With the rise of the metaverse, concerns about data privacy and security will intensify. Marketers need to build trust with their audiences to ensure the protection of personal data while providing customized experiences. Technical infrastructure and accessibility: The full realization of the metaverse’s potential depends on technological advancements and its widespread accessibility. Challenges include ensuring fair access to these virtual spaces, overcoming hardware and bandwidth limitations, and creating inclusive experiences that adapt to a globally diverse audience. Ethical considerations and social impact: Virtual metaverses blur interpersonal connections in the real world. Justin Reich, Associate Professor of Digital Media at MIT and Director of the Teaching Systems Lab, predicts that major tech companies will further exploit users, writing: “Advocates of virtual universes are currently trying to create new digital universes that can be overlaid with new advertising and made as addictive as possible. As the existing advertising surfaces and data collection of the real world saturate, augmented reality becomes a new frontier for surveillance capitalism. If it does materialize, it will be as terrifying as today’s social media. I haven’t seen reporters ask Mark Zuckerberg or others at Meta these questions: ‘How many hours do you currently spend in the metaverse each day?’ ‘How many hours do you encourage your children to spend in the metaverse each day?'”

In summary, the metaverse offers limitless possibilities for marketing innovation. However, the path forward is filled with challenges that require thoughtful consideration and strategic planning. By staying updated on technological advancements, prioritizing user privacy and ethical considerations, and continuously adapting to new consumer behaviors, marketers can navigate the complexity of the metaverse. This will allow them to create deeply meaningful and engaging experiences that are valuable for both businesses and consumers.

Reference

[1] The Metaverse in 2040.
[2] “元宇宙”在中國——營銷行業準備好了嗎? Campaign Asia

The work described in this article was supported by InnoHK initiative, The Government of the HKSAR, and Laboratory for AI-Powered Financial Technologies (AIFT).
(AIFT strives but cannot guarantee the accuracy and reliability of the content, and will not be responsible for any loss or damage caused by any inaccuracy or omission.)

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