While the initial consumer and media hype surrounding the metaverse seems to have simmered down from its 2021 highs, the virtual spaces that were the talk of the town last year continue to grow and attract visitors — consumers and brands alike.
“A lot of brands missed Web2 frankly, and those brands are the ones that are going gangbusters into Web3,” said Sasha Wallinger, Head of Metaverse and Web3 Strategy at innovation and design consultancy Journey in an interview with Retail TouchPoints. “What I mean by [missing Web2] is not having a hearty ecommerce channel or not having an understanding of the intimacy that social can provide to their consumer experience — that was a big miss. Those retailers that are self-aware enough to know that they missed the boat in Web2 are being braver within Web3.”
And yet, as Meta pours billions into the most expensive tech project in history and countless other companies launch Roblox worlds and branded avatar apparel, the bulk of consumers still remain largely unfamiliar with Web3. Only 25% of respondents in a recent Publicis Sapient survey said they were very or somewhat familiar with the metaverse. However, that number bumped up to 40% among U.S. respondents; indeed, America seems to be the most mature market when it comes to metaverse development and adoption.
“Right now, we are seeing the first wave of innovation — of companies risking it all to solve a problem,” said AJ Dalal, Managing Director of Data and Web3 Strategy at Publicis Sapient in comments shared with Retail TouchPoints. “The death of this wave, like the death of AOL or MyVista for example, opens the door for the second wave, where innovation will have sustainable growth.”
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Journey’s Wallinger shared her take on where Web3 stands today and debunked some common misconceptions to help brands focus their time and energy in 2023.
Myth #1: Every Brand Should Already be in the Metaverse
The Truth: As Dalal points out, the metaverse and Web3 are still in the early stages of growth, which means brands have time to figure out an approach that works for them. What every brand should be doing at this point, though, is having the conversation, said Wallinger.
“It’s a really exciting new tool as a marketer to connect with your audience,” she said. “You’re not totally off the radar if you don’t make this holiday season, but there will be that Gen Z audience share that you’re going to want to go after. There’s also more and more of a Web3-native consumer base that you’re going to want to take into account. Start to understand how they’re spending time in the metaverse so that when you’re creating collections or marketing elements, or even in-store moments, you can convey something that’s relatable to them.”
For brands focused on younger consumers, Gen Z in particular, the metaverse will be an important new channel. The Publicis Sapient survey found, unsurprisingly, that Gen Z leads the pack when it comes to familiarity and interest in doing things in the metaverse. Not only do they own more metaverse goods (VR headsets and devices, cryptocurrencies or NFTs) than other generations, but 62% said they would like to do things in the metaverse.
But that doesn’t mean brands should jump into new tech like NFTs and crypto without a strategy, said Wallinger. “The fashion influencers that I follow are always sharing when there’s a new brand that’s able to be purchased via crypto,” she said. “Being in that first-to-adopt group can be fun and exciting — there’s a rarity and scarcity to that — but you have to be very clear on your Web3 strategy. It makes no sense for a brand that isn’t really playing in metaverse spaces to have cryptocurrency as a kind of token offering. It makes a ton of sense for a brand like Gucci, though, that is all-in on the metaverse. They have elements of gaming, NFTs, and you can purchase products in their store, as well as I believe online, with cryptocurrency. Crypto is a natural next step for them.”
Myth #2: The Metaverse Requires a Whole New Set of Skills
The Truth: The core tenets of good marketing and retailing hold true in the metaverse — it’s just a new way to engage.
“As in all good retail — keep it simple, keep it consistent and keep it focused,” Wallinger said. “This isn’t about trying to be something new; it’s about connecting in a new way. All of those good processes of compelling people to fall in love with your brand through purchasing behavior, and even browsing behavior, hold true within the metaverse. In a way, the new Chief Marketing Officer is a Chief Metaverse Officer, in the sense that [Web3] is kind of cannibalizing those different points across the conveyance of brand to consumer, and updating them to become more integrative and relevant [in this new space].”
Hiring the right people to do this is important, but according to Wallinger that doesn’t mean focusing solely on developers or tech experts: “The savviest play is to have amazing creatives on your team.” That said, having someone on the team who is immersed in the world of Web3 is also crucial.
“It is really important to understand the ways people are discovering your brand in this platform, so it’s good to have a guide — people who can help to interpret the real from the transactional and help vet how your brand is coming across,” she added.
It can be labor-intensive to match the right platform to the right goal, but it’s necessary so that in five to 10 years when more people are onboarded, you have a stake in the virtual ground. “Even for things like purchasing land in the metaverse, you want to make sure you’re on the quote-unquote ‘right block,’ so having those guides who have been at this work for some time and can help to interpret how and where and why is really important.”
One of the best places to look for this talent is in the world of gaming, because the process of building engaging metaverse experiences often runs parallel. For example, most video games start off easy and get more challenging; metaverse experiences should do the same, especially as most visitors are new to these spaces. “There has to be something that they can easily conquer so they don’t feel the frustration of embarking upon a tool that is too difficult,” advised Wallinger.
“We’re in the window decoration stage right now — it’s that sense of having something that’s easy to understand but then has layers of complexity,” she added. “If you looked at Simon Doonan’s windows [known for his displays for Barneys New York], you knew that there was so much behind it, but it could also just be a really simple dress you’re looking at. Those same kinds of layers are really critical in the metaverse.”
As an example, Wallinger pointed to Wendy’s recent activation in Horizon Worlds. “What was coolest was how people were helping each other solve the rules of the game and find different pathways,” she said. “I think that’s really exciting for retail because it has this group feeling of ‘Let’s solve this together’ under the banner of Wendy’s. There’s this opportunity to both educate a consumer about the capabilities of Web3 and also make them feel welcome and like it’s relatable.”
Myth #3: The Metaverse is About Escaping the Real World
The Truth: Some of the best metaverse experiences so far have driven brand engagement IRL.
In April 2022, Chipotle launched a game in Roblox that played off online conversations about how rolling the restaurant’s burritos was as complex as playing a video game. The Chipotle Burrito Builder let fans try for themselves and earn an in-game currency called Burrito Bucks in the process.
The first 100,000 players to successfully roll a burrito got something else though — a coupon for a real-world Chipotle entrée. Not only that, but Chipotle also debuted a new menu item to coincide with the Roblox experience — a custom burrito based on fan feedback via Twitter that Chipotle Rewards members could order for a limited time. “We’re blending the metaverse and real-world elements of our brand to take the Chipotle fan experience to a whole new level,” explained Chris Brandt, Chief Marketing Officer of Chipotle in a statement announcing the game.
This combination of virtual and real-world experiences was a great example of the kind of interoperability that Wallinger said many of the brands she works with are looking to achieve: “There’s a moment of entering the metaverse to experiment with a brand, to get more intimate and experiential, and then you come out and that digital experience is conveyed into a real moment that can be physically engaged with.”
Another recent example of a brand merging the two worlds is Starbucks’ new NFT-based loyalty program. “[With this program] they’re saying, ‘You’re already part of our group. Now come with us as we join in this metaverse discourse or go into the metaverse on our behalf,’” noted Wallinger.
This kind of virtual discourse can offer powerful real-world insights as well. Both Wallinger and the Publicis Sapient study point to the demand signals that brands can gather from user behavior in the metaverse as a strong use case for Web3 activations.
“There’s a ton of independent creativity that the consumer can share with you and a ton of learnings that you can gather from things like how players personalize virtual merchandise,” said Wallinger. “For example, if Vans has a hat in Roblox, how are customers wearing that hat? What colors are they picking? Why are they choosing to appropriate a brand in a certain space? It’s smart for retailers, even if they’re not stepping into the metaverse, to take time to see what styles and shopping behaviors look like in that ecosystem.”
Bonus Myth: The Metaverse is a Boy’s Club
Wallinger ended our interview with one final thought, and we’re going to end this story with the same: “The future is rich for women in Web3,” she said. “I really advocate for that, because there’s not a lot of women in this space. Especially if you’re a woman in retail, you have a lot of the skills already to dive into this space. I’m not a technologist, I don’t come to this from any kind of tech background, but there are so many different ways to overlap, and we need good retail brains in the space.”
Further reading: Learn about the interplay between Web3 and the burgeoning world of retail media in our Retail Media Guide here.
