Storyboard18 - Marketers are arriving in the metaverse. What's next?

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“You take the red pill, you stay in Wonderland and I show you how deep the rabbit-hole goes.” Remember this famous dialogue from The Matrix? Two decades later, marketers are asking the same question. The Wonderland and rabbit hole here is the metaverse.

“Unlike Web 2.0, where it took a pandemic to adopt digital across categories due to the massive consumer base on digital, Web 3.0 is at least being discussed and clients are open to hearing about the possibilities,” said Anjali Malthankar, national strategy director, Tonic Worldwide.

In the hybrid world, going forward, virtual stores in the metaverse should not be just treated as a novelty or fad but “an extended reality for the consumers to experience and buy virtually,” Malthankar told Storyboard18.

But before we get into what brands can do in the metaverse, it’s alright to ask just what exactly is 'metaverse'?

Lokesh Rao, cofounder and CEO at Trace Network Labs that is helping luxury and lifestyle brands fulfil their metaverse aspirations, has a simple definition to demystify the concept.

Simply put, the metaverse is an immersive digital space for people to engage with activities, events, and other people for entertainment, collaboration, and fulfilling digital aspirations which are at times not possible, expensive or too far-fetched for people in real life.

A recent example would be that of Louis Vuitton’s introduction of Louis The Game. Through the game, one could discover the brand’s story over two centuries and also try to find one of the 30 precious NFTs created by the luxe brand. While on their quest, users also had the option to style themselves in Louis Vuitton ensembles.

Experts call these initiatives another shot in the arm for tapping the millennial clientele and curating unique experiences for them.

Brands are using the metaverse to bridge the gap between offline and online experiences. Since experience is at the core of what the metaverse can offer, Malthankar believes metaverse projects can help brands sell their current products and services and also present opportunities to create virtual products and services for the meta-humans.

The whole idea is to increase engagements by providing customers with a real life-like experience. Only it’s not real.

Brands need to look at it from a perspective of “experience building as opposed to viewing it as a channel for communication,” said Preetham Venky, Chief Digital Officer, DDB Mudra Group.

But, for instance, can a physical store experience be replicated in the metaverse?

“The only things that can’t be replicated in the metaverse are the touch and smells associated with being in a physical store, though I suspect it won’t matter as much—since the metaverse will excel at selling digital products like digital sneakers, fashion and so on,” Venky said.

The intent, according to him, is to focus on creating an experience for the avatar version of the user and not just limit it to making another space to buy just physical goods from.

“The physical and digital will exist side by side and consumed with the same fervour,” he believes.

Elaborating further on the ‘avatar’ bit of metaverse, Rao said one needs to have an avatar to experience a metaverse. “It is like having a digital twin,” he said.

Rao’s company Trace Network is working on becoming the gateway for lifestyle brands to launch a new set of limited edition lifestyle and fashion products exclusively made for digital avatars of metaverse residents across multiple chains and metaverses.

Trace Network is working with two tools to help brands—Buddy and Bling.

While Buddy is primarily a tech tool that helps create a digitised version of a living person and converts the digital person into an avatar that can be used as a user’s alter-ego in a metaverse, Bling is a limited-edition global marketplace for rare and exclusive NFTs of luxury and lifestyle products and accessories.

The Hyderabad-based company has already onboarded over twenty brands as clients. 883 Police, Asmara Group International, and Palem are some of them.

Earlier this month, when the first Indian couple married in a 3D metaverse, the association was conceptualised, organised and executed by the media agency Wavemaker India for ITC Ltd. and Matrimony.com. Coca-cola also jumped in. The wedding took place on YUG, an Indian metaverse platform.

Vishal Jacob, Chief Digital Officer, Wavemaker India, told Storyboard18 that they set up a division six months ago to explore opportunities in this space and help brands navigate through NFTs, the metaverse, decentralised identities and so on. So when they spotted the wedding opportunity and had innovative brands operating in the premium chocolate gifting and matchmaking space, they jumped right into the project.

Jacob said in the new version of the internet that is developing, users won't distinguish between physical and digital experiences. They will coexist.

Brands, according to him, will have to find ways to redefine the models of consumer engagement, experience and that’s where companies like Wavemaker come in.

“Users will expect friends, goods, and experiences to be connected virtually. Metaverse can enable this. As these platforms mature, consumers will spend more and more time in these virtual experiences for work, socialising, entertainment and commerce,” said Jacob.

The big question is will there be enough people to meet and mingle with in the metaverses.

Arjun Bhatia, Chief Marketing Officer at Matrimony.com says marketing is all about building better experiences for customers. The metaverse wedding was their opportunity to do so.

ITC Ltd Foods Division too wanted to create an innovative and indulgent chocolate experience for consumers in the metaverse.

“In the metaverse, everyone is the centre of their own digital worlds and can create their own experiences… Featuring consumers in the brand experience increases the chances of consumers creating and sharing content featuring the brand," said Anuj Kumar Rustagi, COO Chocolates, Confectionery, Coffee & New Businesses, ITC - Foods Division. He added, "It is with this intent we decided to be one of the first brands to transition to this platform.”

The wedding had 500 registrations and 400 logged in. Avatars of the couple tied the knot on a beachside venue, and guests joined via their avatars. The virtual wedding coincided with the physical event held in Bhopal.

A metaverse wedding event like this costs between Rs 50,000 and Rs 2 lakhs based on the number of customisations. But since this was YUG's first launch, they did it for free.

ITC said it is too early to comment on metaverse opening new revenue channels, “but we do see this happening soon in the near future… This can aid in building brand value for the brands that are able to create memorable and immersive experiences on the virtual platform for the consumers.”

Just like Matrimony.com and ITC, retail brands—especially those in the fashion segment—are also creating many firsts for the industry. These brands are putting together contemporary digital fashion wear that is being converted to wearable NFTs on the blockchain. Users can put these NFTs on their avatars and enter a virtual space wearing a jacket, shoes, shades, jeans, and so on—just like one would in the physical world.

Gucci, for instance, in their recent partnership with gaming platform Roblox created a two-week long art installation where visitors could buy digital Gucci items. One of the items on display, the Gucci ‘Queen Bee Dionysus’ bag, ended up being sold at $4115. The same bag in the real world costs a little over $3000.

To be sure, the bag was sold as a simple digital good, not an NFT. The purchase had no real value, usability or transferability outside the world of Roblox. And after the hype died down, the bag’s digital version’s price tag went down to $800.

Balenciaga also did a similar partnership with free-to-play Battle Royale game platform Fortnite towards the end of last year. Nike acquiring virtual sneakers and collectible creator company RTFKT in December 2021 was also a step in the same direction.

Alongside all the brag value, the metaverse is also a new addition to the revenue channel of brands.

Mihir Sanchala, Assistant Vice President – Technology at fantasy cricket platform PlayerzPot pointed out some other benefits of venturing into the metaverse.

“In the virtual world, we can target an ample audience as compared to the real world by considering the user's behaviour and other aspects, creating their own customised characters based on their interests. Using NFT, people can own, buy, and sell their game characters, assets, costumes and so on, and the metaverse will bring virtual cash and physical interactions,” he said.

But NFTs have their inherent challenges, including fakes and counterfeits. Some real-world problems do transcend all real and virtual boundaries. Reuters reported that US-based marketplace Cent, the platform which sold an NFT of Jack Dorsey's first tweet for $2.9 million, has halted most transactions. Because people were selling tokens of content that did not belong to them, its founder said—calling this a "fundamental problem" in the fast-growing digital assets market.

The metaverse rollout brings with it various challenges around privacy, security, and safety. Factors marketers will have to take into account in their plans even more seriously as they get deeper into the metaverse.

Possibilities in the metaverse seem unlimited. Like DDB Mudra Group’s Venky said, even if there’s plenty of work still pending on the realisation of a true metaverse ecosystem, brands and marketers should slowly whet their appetite with some strategic investments in digital products to unlock new channels of experience, engagement, and revenue.

“The metaverse really is an open canvas and the first movers will definitely benefit,” said Malthankar. So, for brands that are waiting to jump on the bandwagon, now is a good time.

But the big question is when will the consumers arrive in significant numbers. And more importantly, will they stay?