How the Metaverse is central to driving business growth
In this blog, we’re going to explore some of the use cases of the Metaverse, particularly in the fashion industry, alongside the increased need to protect intellectual property.
What is the Metaverse?
At MDRx, we see the Metaverse as a movement towards breaking down the walls between the physical and digital.
As an example, if you want to buy a t-shirt, you either go in store or shop online. The Metaverse is about using technology to make that online experience feel more physical and experiential or that in-person experience feel more immersive. It’s about blurring things that were previously entirely physical or entirely digital.
Metaverse isn’t a technology. It’s a broad umbrella term that covers lots of technologies and a very specific application, such as virtual reality, augmented reality, or a combination of both (through VR glasses). An important feature of the Metaverse is having its own economy, which has real value and is connected to the real-world economy.
What are NFTs?
In this Web3 reality, where people are able to transact value, this is represented in the form of tokens. The term ‘NFT’ stands for non-fungible token, meaning it’s not readily exchanged for other tokens having the exact same value. At their core, NFTs are unique digital assets that are stored on a blockchain. They allow us to transact not only fungible things such as money but also non-fungible assets such as unique goods, artwork, and others. NFTs cannot be replicated, and each of them has its own distinct value and ownership. This is in contrast to traditional fungible tokens, such as cryptocurrencies, which are interchangeable and have the same value as each other.
NFTs are created from smart contracts and are, on the most basic level, proof of ownership or authenticity on a blockchain. However, because smart contracts are programmable, it enables creators to do more than just these basics. A recent example is the rental NFT standard on the Ethereum blockchain.
What does the Metaverse mean for businesses?
We believe the Metaverse is inevitable and it’s going to impact every aspect of our lives. However, when large enterprises approach our team asking if they should be incorporating Web3, Metaverse, or NFTs in their strategy, we always ask them to start with the ‘why’.
They should assess what they are doing today and where they want to be in ten years, and then figure out how, if at all, these emerging technologies form a part of that. They’re also going to want to make sure that all their investments are either improving their top line, bringing in more revenue opportunities, or improving their bottom line by reducing costs and achieving efficiencies.
Here are three use cases of the Metaverse that businesses should consider when thinking about their emerging technology strategy.
1. Brand positioning
Using the Metaverse as a positioning tool allows businesses to place their brand in the environments in which current or future consumers are, whilst building that brand association with luxury and prestige. For example, Decentraland hosted their second Metaverse Fashion Week, which boasted participation from luxury brands like Dolce & Gabbana, Balmain and Coach. It was the perfect platform for brands to push their creative boundaries because they were not confined by real-world limits and they were able to associate themselves with luxury.
2. Improving top line – driving new revenue
The Metaverse allows businesses to achieve scale in ways that are impossible in the physical world. Musicians, for example, can sell vast numbers of tickets to online concerts that would be prohibitively expensive to run in person. By using Metaverse technologies, musicians can create immersive concert experiences that connect with fans on a deeper level, driving new revenue and expanding their reach.
Another recent example we’ve seen was during the Qatar World Cup, where sports organisations sold billboard space to sponsors both in the physical and digital worlds, using a new realm to drive revenue.
In the luxury sector, Tiffany offered Cryptopunk owners the chance to purchase an “NFTiff Pass” for the value of 30 ETH (approx. $54,840.30 on 1st April 2023). Upon purchasing the NFT, Tiffany designers recreated the owner’s Cryptopunk in the form of a jewelled pendant. The collection was a huge success and generated a sales profit of $12.5 million.
3. Improving bottom line – cutting costs
We’re seeing more and more Metaverse-related innovations, with the notion of a ‘digital twin’ being one of the many examples.
Digital twins are digital replicas of physical goods. Organisations, especially in the retail and manufacturing industries, use digital twins to help them model and improve their manufacturing and iteration processes. This has sustainability benefits because it’s cutting physical waste, whilst also reducing costs by not having to manufacture physical goods all the time, therefore improving the bottom line.
IP protection in the Metaverse
With the rise of NFTs in the metaverse, it is becoming more imperative for brands to protect their IP rights, as well as their consumers from confusing or misleading products.
Trademark is an essential part of branding in the fashion industry. In the UK, in order for the owner to have a monopoly right over a mark (such as a logo or word), trademarks must be registered. Trademark registration did not have a clear classification for virtual worlds, however, there have been some positive developments. Recently, the UK Intellectual Property Office (UKIPO) provided guidance for trademark applications within this domain.
Fashion brands may also have concerns about the use of trademarks in user-generated content. If a user creates a virtual item that resembles a trademarked product or uses a trademarked name without permission, there’s a risk that it infringes on the trademarked brand’s rights. This can be solved with technologies, such as automated detection and removal of infringing content.
Are emerging technologies the right thing for your business?
There are usually risks associated with emerging technologies but that shouldn’t stop us from innovating. There is a balance, a responsible middle path that enables and permits businesses to innovate and do interesting things, whilst taking some protective mitigating steps. The Metaverse isn’t just a thing businesses do to appear innovative, but it’s central to driving their brand, top line or bottom line, or all of them.
If you’re not sure what your next steps should be when it comes to emerging technologies, get in touch. We’re working with some of the world’s most innovative organisations across both public and private sectors to create impactful strategies all the way through to implementation.