Do you cringe when you hear the phrase information superhighway? In a few years, we might be feeling the same way about the term “Metaverse” or Web3, even as we increasingly spend more time in increasingly immersive digital spaces.
In conversations with brands recently, when we talk about where things are headed, someone will inevitably bring up the Metaverse or Web3, and someone will inevitably decry the whole thing as a scam.
But, I reply, if we removed the word Metaverse from the conversation and said, based on your experience of the world so far, do you think that in the future we will be spending more time in more immersive digital spaces?
They inevitably say yes, emphasising how much time they spend on their devices today, and that with even more engaging tools, that the number of hours would be likely to increase. The response to this varies, from resigned acceptance and this meaning a relinquishment of real life experiences to excitement about the possibilities that are likely to emerge.
And the truth is we are all spending more time online, with time spent on digital devices increasing to reach almost eight hours a day on average, according to GWI data.
As we look to the next iteration of the information superhighway, some gauntlets have been set around what it should be, with Tony Parsi setting out a series of initial rules about what the Metaverse is:
Rule #1. There is only one Metaverse. Rule #2: The Metaverse is for everyone. Rule #3: Nobody controls the Metaverse. Rule #4: The Metaverse is open. Rule #5: The Metaverse is hardware-independent. Rule #6: The Metaverse is a Network. Rule #7: The Metaverse is the Internet.
Currently, Web3 is as much an ideology as it is a set of techniques and technologies, focusing around the tenets of being open, decentralised and composable. It is underpinned by the belief that the creators, builders and users should have as much ownership and benefits as investors and companies.
Currently, we are in a cycle of hype where people’s perspectives on the future of the Metaverse and Web3 – and their belief in those principles – are intertwined with a number of perspectives on news stories on the crash of crypto currencies, and the fact that a lot of NFT projects so far have been made with currency speculation as the driving force, rather than created with the customer in mind – with usefulness and aesthetics coming a distant second.
This conflation of crypto, Web3, Metaverse, and other terminology has created a complicated tapestry for brands to unpick, and this, in my experience, is turning people away from possibilities they might otherwise want to tap into – because they’ve picked up a negative association. While Web3 is in its infancy, and the Metaverse remains an idea that is yet to be achieved, brands are already looking to get involved or to write the whole thing off based on the technology we have available today, and on the way that technology is being framed in promotion and public discourse.
After spending a long time looking at the world through a futures lens, though, it’s clear that often new developments take a few iterations before they start to take their final forms. So are some brands moving forward too fast? Are some missing an opportunity? Or does the truth lie somewhere in the middle.
If you look back to the era of the information superhighway (there’s that quaint term again), many of the brands that initially launched in that space – and then died in the first dot com crash – were those that were either too early or did not differentiate their offer well enough.
This has some clear parallels in what’s happening today. Right now, people are writing off the next iteration of the internet, based on a combination of recent crashes, as cryptocurrency prices plunged, leading to a devaluation of many of the items whose prices were being propped up by speculators. The “crypto winter” has become so wound up around the Web3 conversation in general, that the downturn of one thing can end up looking like the doom of another.
But if we look back to look forward:
- The internet did not end after the dot com bubble burst in the early 2000s
- Social media did not stop being relevant after MySpace fell out of favour in 2008.
This doesn’t, of course, guarantee that we’ll see the same rebound in Web3 / decentralised / Metaverse applications, but it does set a precedent for how the potential of emerging technology takes time to realise.
In the meantime, though, as brands start to look beyond hype and start to seek real value from their investments in Web3, it could be a good time to start to take on a Web3 mindset even if Web3 itself is not yet there to support it.
To put that philosophy into practice, brands might take one (or all) of the following approaches.
Start experimenting with the current iteration of the Metaverse
The Metaverse as it’s currently being realised is effectively where video games are today. In lieu of broad market penetration of VR hardware, the majority of consumers are interacting with real-time worlds on flatscreen devices – and this is a sector that gaming already dominates. Regardless of how you feel about theories about the future of the Metaverse (especially Mark Zuckerberg’s vision for a billion people interacting in VR or mixed reality by 2030) this makes gaming somewhere brands need to be, given that close to 90% of the valuable Gen Z, Millennial and Gen X demographics spend 10 hours or more playing them.
In the future, we’re likely to see more XR and immersive platforms, and more complete and compelling service layers, experiences, and business models built on top of them, but the flatscreen Metaverse is already here. While it lacks many of the elements of the envisaged version of the metaverse (interoperable, open, embodied), it’s offering brands opportunities to build credibility with the majority of Gen Z who classify themselves as gamers – at the same time as potentially stress-testing some of the pipelines and frameworks that they will come to rely on in the future. But, it’s really important not to get caught up in the hype, and do the same kind of due diligence that you’d do if you were reaching consumers on other platforms.
In the short term this is likely to mean investing in collaborations or partnerships on platforms like Fortnite, Roblox or even Animal Crossing rather than Decentraland, The Sandbox or Axie Infinity.
While developers and start ups continue to create the Metaverse, consider using these experiments to learn how to interact in these spaces, and to build credibility with your target user.
Apply DAO thinking to non-DAO organisations
One of the key tenets of Web3 is creating more shared ownership, facilitating co-creation in a way that allows creators to be financially rewarded for their efforts. While true distributed, autonomous organisations are extremely rare (and the model is still in the testing phase) brands can still look at how they bring customer feedback into product development processes, and deepen the community around the brand through the use of proven community platforms. Discord servers, for example, already bring brand fans and employees closer together – not just to consume, but to collaborate. In this, consider strategies that allow for co-creation and co-ownership of designs, rewarding the most engaged with products, experiences, or a financial stake.
This is already happening in other categories, like media with entertainment newsletter Dirt, where people buy into the season, giving them increased access to published content, as well as a say in what things the organisation writes about.
And in the fashion sector, Lacoste launched an NFT called Undw3 featuring a crocodile emerging from the water. The brand said the move was designed as the first steps into building an “experiential, interactive, and co-creative universe”. Crucially, the NFT is also positioned as an onramp to a more collaborative relationship between brand and customer: NFT owners become a part of the Lacoste family, with owners not only gaining access to exclusive physical products but also having a say in upcoming designs.
Of course, the reality of successfully creating a garment in this way is more complex than creating a digital content platform, and success in this space requires digitisation further up the design process, prototyping ideas in 3D and then allowing participants to vote. For the time being, votes effectively become a mechanism for pre-ordering and for gauging popularity. But this kind of engaged market testing is something that brands have been working to build for a while.
Brands that look to explore these kinds of strategies will also need to consider what kinds of products they apply this thinking to, as consumers lack patience for products with long lead times. Reconfiguring the supply chain will be key, with products like statement prints on them that can be done after the item has been manufactured – for instance a graphic print on a T-shirt or hoodie that can be screenprinted close to market.
For items that are more complex, businesses will need to consider accelerating speed to market through nearshoring, or drop-shipping allowing them to make those critical design decisions closer to market.
Consider the role of NFTs, carefully
The first wave of NFTs has largely been about creating scarcity to drive up value, and with the recent dive in the value of cryptocurrencies, there has been a devaluation in financial terms for many NFT assets. This combination is likely to leave a sour taste in the mouths of some sets of consumers, so, as brands start to consider their way forward in the wake of this, it will be important to consider the role that NFTs play in your overall brand offer. Rather than just thinking of them as collectables that will be popular due to their limited availability, it’s important to consider their long term role within the brand experience, and how they can exist (and add value) independently from their monetary value.
There are lots of initiatives launching up to create products that enhance loyalty, for instance the new Tiffany NFT (NFTiff) requires purchasers to already own a CryptoPunk NFT, while RTFKT’s latest Nike NFT includes an NFT enabled IRL hoodie that creates an augmented reality filter that gives the wearer wings, with the NFT able to be worn by Clone X avatars. There’s a lot of interaction between physical and digital worlds in these applications, and this is probably indicative of the place NFTs will find in the near future.
Similarly, Prada and Adidas’ collaboration also developed new routes to connection with the NFT element that they released as part of their collaboration. The co-created art piece brought together images from 3,000 people to create a work by Zach Lieberman. Images were minted as NFTs and compiled as tiles in a single mass-patchwork NFT. Contributors maintained full rights over their individual NFT tiles, with money from the sale of the larger image being used to support the work of Slow Factory, a non-profit organization and institute working to create education to drive meaningful solutions and inclusive communities.
For businesses considering moving into this space, I’d encourage them to look for loyalty and engagement in the intersection between the physical and digital space, with NFTs that mean more to the consumer than just a profile picture or an asset value graph.
While the Metaverse as a term may go the same way as the information superhighway, despite the current headwinds, there are many good reasons to continue exploring the Web3 space. Success in the space, though, will require brands to look beyond the hype and really consider where and how these tools will add value to their customer propositions. Those who do this will be rewarded with more than just press column inches and benefit from deeper customer loyalty and enhanced brand perception.
