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If NFT was 2021’s word of the year, Metaverse couldn’t have been far behind. This term became particularly buzzy with the rebranding of Facebook to “Meta” last year.
The metaverse seems like the natural culmination of the modern connected economy and a radically new concept at the same time. Our fascination with NFTs, cryptocurrencies and extended reality (XR) technologies like AR and VR have made them more than just ingredients of the metaverse.
The metaverse has the potential to dwarf the world economy as we know it and transform what retail brands and consumers consider possible in the near future. Here’s what you need to know about it.
What is the Metaverse?
The first usage of the term “metaverse” was by the science fiction author Neal Stephenson in his 1992 novel Snow Crash. He imagined the metaverse as a virtual world where people interacted with each other through 3D avatars. This is not very different from what the metaverse is, at least currently, in its infancy.ﾠ
In fact, many of us have already been part of various metaverses in the form of MMO (massively multiplayer online) video game worlds like World of Warcraft, League of Legends, and Dota, and more recently in Fortnite, Minecraft, and Roblox.
But what these virtual worlds lack is the truly decentralized and interoperable nature of a true metaverse. As Marjorie Hernandez, the co-founder of The Dematerialised, says:
“[Metaverse] takes us back to the dematerialization of the goods that comes from the gaming world, in which your avatar is part of your personality. As we regular people start transitioning into the digital world more and more, and the barrier between physical and digital start blurring more and more, we'll start consuming digital fashion, digital sneakers, digital makeup, and digital jewelry.”
The idea behind blurring the boundaries between the tangible and the virtual is to live in a highly immersive “reality” that isn’t owned by a few big tech companies. The metaverse will live on the blockchain and will manifest the interactive potential of the disruptive technology.
Retail brands have already started going big with NFTs, virtual experiences, and exclusive digital goods.
Unprecedented Retail Immersion – Into The Metaverse
Brands have realized the potential of this new frontier of marketing and user interaction.
The convergence of hardware technology, blockchain and cryptocurrency, NFTs, and AR/VR has created the perfect storm for companies to craft unique experiences for consumers in a bid to outshine the competition and grab eyeballs with the next big thing.
Connected Community Experiences
Brands have caught the pulse of the consumer when it comes to enjoying a shared experience. And what the metaverse does so well is bringing the tangible to the virtual and vice versa.
Nike recently created “Nikeland” in Roblox, a digital world with its world headquarters in the background, complete with a showroom for players to outfit their avatars and fun sports activities for fans to enjoy.
Last year, global play and entertainment company Hasbro partnered with Roblox to bring Roblox-inspired NERF blasters and a Roblox edition of its Monopoly board game to fans worldwide. These virtual-turned-tangible products also allowed people to gain access to exclusive virtual items in the world of Roblox, bringing the ride full circle.
Exclusive and Luxury Virtual Goods
Popular DTC cereal brand OffLimits recently started offering exclusive ‘toy NFTs’ to every customer buying a $4.50 bowl of its products. OffLimits’s strategy contributed to creating a buzz for its Miami Art Week event by taking a splash into the newly-mainstream NFT space.
Fashion brand Balenciaga debuted its Balenciaga Fit Set in Fortnite in September last year, allowing players to dress their favorite characters in the brand’s signature clothing. The collection even inspired a limited-edition physical line at a few select stores.
It’s not only the DTC and fashion brands that are participating in the metaverse. Luxury brands, including those selling cars, are even dipping their toes into it. In July last year, Ferrari brought its upcoming Ferrari 296 GTB to Fortnite, giving players exclusive access to test drive the supercar. The 296 GTB will not be available in the real world until some time in 2022. Until then, Fortnite’s quests are the only way to experience Ferrari’s new machine.
Launching the car in Fortnite before it makes its presence in the real world creates the factor of exclusivity. And this exclusivity is what creates FOMO, ultimately driving sales and popularity.ﾠ
Good Ol’ Fashioned NFTs
Yes, if NFTs can be called old-fashioned. Companies like Adidas and Coca-Cola are bringing NFTs of their iconic products to consumers, piggybacking on their brand value in the real world in an attempt to generate millions in the metaverse as well.
DTC brands are not lagging behind either. Companies with a tight-knit community can take advantage of the metaverse to create even a stronger community and increase their brand equity.
For example, The Hundreds, a popular streetwear brand, came out with “Adam Bomb Squad” NFTs modeled on its past clothing designs and the brand’s journey to the iconic streetwear brand it is today. Currently trading at $2,405, the total value of the brand’s NFTs traded to date is more than $43 million.
“Leisure-enhancing” sunscreen brand, Vacation by Poolsuite, launched NFTs just before its Art Basel Miami event, offering ‘Executive Member Cards’ to fans and followers. Combining the two exclusives—membership and NFT—the brand was able to reach its target audience and market its upcoming event in a non-traditional manner.
Luxury brand Dolce & Gabbana presented its Collezione Genesi NFT collection to 450 guests in the Venice Casino in August 2021. The three-day event was a one-of-its-kind physical installation of NFTs by a luxury fashion brand.
The most valuable NFT from the collection, the Glass Suit designed by Domenico Dolce and Stefano Gabbana, sold for more than $1 million.
What the Future Holds
The metaverse is set to turn retail on its head. In addition to shopping for digital apparel and cars in virtual showrooms and buying items for avatars in online games, the next step will be total immersion where live retail in the real world will pale in comparison to the interaction conjured up in the metaverse.
"The real application is going to be once we have augmented reality glasses and are able to see the virtual garments everywhere and buy them. That's when augmented reality glasses will be mainstream."
-Benoit Pagotto, Founder, RTKFT Studios
As the metaverse evolves, it will bring in new opportunities for consumers and brands alike. New income streams will enable newer brand collaborations and influencer partnerships, all existing completely online and focused on digital-first identities.
Retail brands have a whole new world to explore. With the freedom that comes with buying virtual real estate in Sandbox or Decentraland and the ability to create anything that can be imagined, brands will find themselves at the merging of humanity and technology. It’s an exciting place to be.
