From Buzzword to Reality: Decoding the Metaverse Phenomenon
The Metaverse is still the latest buzzword in tech, with every business looking to adopt it in the hope it will make them look instantly innovative. But what exactly is the Metaverse?
The Metaverse is a blurring of previously entirely physical, or entirely digital, experiences, using technology. Physical and digital experiences have traditionally existed independently. For example, today if you would like to buy a t-shirt, you either do so physically by shopping in store, or digitally by shopping online. The Metaverse blurs these experiences, making your in-store experience more digital using immersive and inspiring technologies and your online experience feel more physical through, for example, virtual try-ons.
Metaverse projects often, but don’t always, involve so-called “reality technologies,” such as virtual reality (VR), augmented reality (AR), extended reality (XR), and mixed reality (MR).
Beyond Virtual Worlds and Web 3.0
Virtual worlds are exciting and groundbreaking but, contrary to popular belief, they represent just one of many Metaverse use cases. Remember: the Metaverse is a movement, not a place or a technology.
While the Metaverse can coexist with Web 3.0, it is important not to use these terms interchangeably as they are entirely separate technology phenomena. Proponents of Web 3.0, including myself, believe Web 3.0 can make for more rewarding, immersive and valuable Metaverse implementations. We know, however, that the two technologies exist and can thrive separately, and the merits of using them together on a given project must be carefully considered.
The Power of Storytelling in the Metaverse
Disney refers to the Metaverse as “the next great frontier of storytelling.” Very Disney.
For Disney, the application of this is obvious and literal, but we all tell stories every day in our personal and professional lives. A retailer tells stories to its customers from the moment they go onto their website or walk into their store. Luxury brands tell a story to their consumers every single time they interact with their product. Professional service firms tell stories to their clients and employees. Sports teams try and foster a tight connection with their fan base by telling stories of their legends and histories and triumphs and despairs.
The Metaverse offers new and novel ways for brands to storytell, forge deeper connections and foster emotional attachments with their audiences.
Driving Brand, Revenue and Efficiencies with the Metaverse
When it comes to investing in the Metaverse, companies must be strategic and focused. In challenging times, one good thing is that era of investing exorbitant amounts of money into projects without clear strategic direction beyond “appearing innovative” is well and truly over.
We encourage our clients to critically assess whether they are “doing” a new technology to enhance their brand, drive new revenues, or reduce costs. This can often be confronting.
I have lost count of the FTSE 250 clients who have come to me excitingly talking about new revenue streams they are going to obtain using Metaverse technologies, that just don’t stand up to scrutiny when challenged. For every BTS concert that allows ticket sales beyond the capacity of any physical location, there is a Metaverse project that is not truly a revenue play but a brand activation. This is totally fine, but it’s important for organisations to be honest with themselves up front and set their expectations and key performance metrics accordingly.
Similarly, I tend to resist the notion that doing something because it “sounds/looks innovative” is automatically consistent with an organisation’s brand strategy. It might be incredibly important to your brand that you appear where your target consumers expect you to be, but if so great, that’s the driver, not superficial innovation-washing.
There are countless examples of Metaverse applications reducing operational costs within businesses. Thoughtful implementations can reduce the dependency on physical stock in retail stores thereby eliminating waste, improving the speed and reducing the cost of manufacturing using digital twins, whilst accelerating time-to-buy for complex services. The operating savings achieved here must of course be considered against the capital expenditure required to get them off the ground, in terms of building or buying in the expertise. This shouldn’t have a chilling effect on tech investment – boards are well used to considering the long term benefits of investments – but should be clearly understood and thought through.
By viewing Metaverse through the brand, top-line, bottom-line lens, we can formulate and execute on technology strategies that are more resilient to macroeconomic conditions, and routed in good old fashioned business sense. Imagine that?!
The risks and challenges of the Metaverse
While the Metaverse presents exciting opportunities, businesses must overcome challenges and mitigate risks.
Organisational readiness is a crucial dependency that can impact the relative success or failure of a Metaverse project. If you’re a business leader reading this, chances are your organisation currently clearly delineates Digital teams (see for example Digital Marketing, IT, Cyber, Website) and physical teams (see for example Store Operations, Security, Manufacturing, Visual Merchandising). We’ve recently produced a Metaverse strategy for one of the world’s most famous retailers, and a significant component of this work has been helping them to design and implement new business capabilities, processes and governance that sets them up for long-term success in an increasingly blurred physical/digital world.
The Metaverse also carries significant reputational and legal risks, from online harms and data protection through to financial regulatory and tax. At MDRx, we talk about ‘compliance by design’ underpinning everything that we do. We can uniquely draw on the world class lawyers from across the Mishcon de Reya Group to ensure that we’re always designing and developing strategies and software that are impactful and realise value, while also helping our clients to navigate complex legal and regulatory issues. In practice, this lets them run faster and with greater confidence, knowing the scary bits are mitigated from the start.
Guiding businesses through their Metaverse transformation
To be clear, the Metaverse is inevitable. As an executive leader, you can confidently bet the farm on a continued blurring of physical and digital experiences. It may get rebranded, manifest in different ways and guises, but the movement is happening.
MDRx deploys a diverse and growing team of Strategists, Software Engineers, Data Scientists and Designers to help organisations innovate using the latest technologies with confidence, and secure in the knowledge that compliance underpins everything we do.
Get in touch to find out more about how we can help you to thrive.