Facebook recently made major waves by announcing that they were about to begin pouring resources into “The Metaverse”.
Facebook recently made major waves by announcing that they were about to begin pouring resources into “The Metaverse”. In their third quarter earnings report, the social media giant touted an investment of $10 billion this year in Facebook Reality Labs, the division tasked with creating AR and VR hardware, software, and content. Facebook believes that AR and VR experiences will be fundamental to “the next generation of online social experiences” and they have committed to significantly increasing the tens of billions they’re currently spending developing these technologies. In the first of our two part series on the looming metaverse, we’ll take a look at how this emerging reality will impact eCommerce.
If you’re currently googling the difference between Facebook’s Metaverse, the Spider-verse, and Dr Strange’s Multiverse of Madness, you’re probably not alone. So let’s take a moment to pin down just what Mark Zuckerberg is talking about when he refers to “The Metaverse”. Venture capitalist Matthew Ball has perhaps done the best job of explaining the concept in a hugely influential 2020 essay. Ball wrote that a metaverse would need to span the physical and digital worlds; house a full-fledged economy; allow users to move avatars and goods across various platforms; and be “an embodied internet” outside of the control of any single company. Even Zuckerberg has acknowledged that the Metaverse would need to be a decentralized entity, which would allow a multitude of brands and creators to contribute to its fabric and profit from their contributions. While virtually every move Facebook makes is likely to be met with cynicism, the Metaverse is a concept which has proven profitable with cloud-based gaming, and seems poised to significantly impact the internet’s future.
At Adimo, we’ve long been excited by the potential of AR and VR to drive change, growth, and progress in eCommerce. As the pandemic drove many previously hesitant shoppers into the arms of online retailers, increasing numbers of large brands looked to these technologies to replace the senses of adventure, discovery, and security that consumers had previously relied on brick and mortar retailers to provide. Most forecasters point to gaming and sporting events as the tip of the iceberg in terms of what the Metaverse is likely to offer us. From the virtual fans filling empty stadiums during the 2020 NBA Finals to the Fortnite players spending real money teaching their virtual avatars how to dance, consumers have shown a willingness to dive into virtual experiences.
Clunky and expensive technology has shown itself to be one of the biggest barriers to entry for the Metaverse. As Zuck himself told The Verge, creating VR and AR technology that is small enough, and “socially acceptable” enough to wear outside of the home is one of the biggest challenges Facebook is facing. But with the amount of resources being thrown into developing it, most experts feel that it will arrive in the near future. In fact, MasterCard projects 54% compound annual global growth, and estimates that Metaverse revenues will hit $372 billion by 2026.
To explain the eCommerce possibilities of the Metaverse, MasterCard’s forecasters conjured up a scenario: you’re sitting in Central Park with a friend, who mentions a pair of shoes she has recently seen. Instantly, you’re able to view them in 3D, experiment with various color combinations, and purchase a customized pair, along with a matching NFT version for your online avatar. You say goodbye to your friend and leave the park with a simple command. Your friend and the park instantly disappear and you’re suddenly back in your cubicle: coffee break is over.
One of the aspects Zuckerberg touts most about the Metaverse is the idea of teleportation. With AR and VR you won’t just see a friend, colleague, or store on your screen. You’ll have an immersive experience in a distinct physical place which will lend an added sense of comfort, “reality”, and “a sense of presence that I [Zuckerberg] think is just much more natural in the way that we’re made to interact.”
For brands, taking advantage of this new reality will depend on the ability to deliver that concrete sense of physical presence throughout an array of eCommerce platforms. Imagine being able to actually walk through an actual supermarket from your couch, choosing the freshest produce and choicest cuts of meat in real-time. In the beauty industry, where the use of AR technology has caught on quicker than anywhere else, the potential is massive. Imagine actually consulting and experimenting with a professional makeup artist from your home, or having color combinations specifically tailored to your skin-tone.
The younger generation has already begun living online. Where kids used to save their money to buy physical goods, their money has migrated to the digital sphere. Instead of LPs or Super Nintendo cartridges, today’s youth is likely to beg Mum and Dad for app store credit or unlimited data. Ikea’s widely lauded AR app which allows you to plunk a virtual sofa down in your living room, just to see how it fits, has been a hit with consumers. As the Metaverse develops we are likely to see more brands develop convenient and innovative technology that upends traditional retail paradigms and attracts grateful shoppers in droves.
The Metaverse has the potential to offer virtually any business the ability to compete on a global scale, and to offer any shopper in a remote corner of the globe the ability to pop into Harrods, stroll 5th Avenue, and wander the streets of Harajuku for inspiration in a single afternoon. If it achieves its potential, its impact on the way we shop will be Earth shattering! At Adimo we’re fascinated by the potential of this emergent technology, and eager to help brands prepare for this brand new universe. Join us for part 2 of our series on the Metaverse, focused on how brands can position themselves for success, which will be coming soon!