The Metaverse Meets the C-Suite

More businesses are interacting with the metaverse to enhance their business strategies and create new revenue sources. But before taking off in this virtual space, business leaders and boards should consider some key questions.

When Facebook changed its parent company name to Meta, it became clear the metaverse was going mainstream. One can barely turn around these days without hearing about the metaverse, digital twins, virtual and augmented reality, non-fungible tokens (NFTs), edge computing, and other concepts related to digitized reality.

François Candelon of Boston Consulting Group recently talked about the metaverse as a physical world converted into digital data, then recreated digitally as either a reflection of reality or as fiction (i.e., games). This means the metaverse is broader than just virtual or augmented spaces. Instead, you can engage with the metaverse through your current hardware before adding virtual or augmented reality components. Think of the metaverse as a next-generation internet where our commercial activities, entertainment, social, work, and sports interactions can, and likely will, take place. Visualize visiting another country or hiking in a national park with just a click. If you think shopping online is easy now, imagine having an online avatar to try on clothes for you before you purchase, or in the physical world, augmented reality glasses that allow you to view an object in numerous colors or patterns as you peruse various consumer goods.

The metaverse isn’t just limited to personal engagement—business interactions will also benefit. As an example, real estate construction, supply chain planning and reporting, and quality control reviews can all be enhanced with real-time digital twin applications that mirror reality. Smart contracts and blockchain will benefit legal, financial services, and other professions where title and ownership require verification.

As the speed of experimentation and implementation advances, there’s no doubt that businesses will need to examine whether to interact with their customers and stakeholders in the metaverse and focus on understanding how doing so can enhance their business strategies.

GROWING THE METAVERSE

According to The Metaverse Insider and McKinsey, by 2030 the metaverse market is expected to grow to $5 trillion. And, so far in 2022, over $120 billion has already been raised by companies in the metaverse space, which is significantly up from 2021 when the amount was over $10 billion. It’s clear the amount of capital being deployed in this space is indicative of opportunities across a variety of sectors.

Many of the metaverse-focused investments are in companies that are creating and maintaining virtual reality worlds, establishing more robust edge computing and blockchain infrastructures, building upgraded hardware and software, and reviewing data security and readiness. Others are establishing new applications, creating stories, designing experiences, and reviewing products and services to determine a starting point for experimentation.

BUSINESS-TO-CONSUMER ENGAGEMENT

The potential for businesses to engage with customers within the metaverse seems limitless through product branding, gaming, entertainment, hospitality, and retail transactions. For example, if you’ve ever played or seen Second Life or Fortnite, you’re likely aware of some basic metaverse platforms. Other examples include:

• Decentraland: This decentralized platform enables users to create their own avatars to explore different application landscapes. Users can also purchase real estate to create events and marketplaces. In 2021, Decentraland hosted a metaverse festival where American media personality Paris Hilton performed.
• Nvidia: Well known within the gaming industry, Nvidia created a collaboration tool for developers to create metaverse applications more easily. Companies like Kroger, Amazon, and PepsiCo have partnered with the tool to create immersive user shopping experiences.
• Roblox: Also well known in the gaming industry, Roblox has worked with companies like Nike to create Nikeland, allowing users to play sports games, shop for NFTs, and purchase consumer goods. The gaming platform also worked with Gucci to establish Gucci Town, creating a similar interactive site experience.

BUSINESS-TO-BUSINESS OPPORTUNITIES

Business interactions through the metaverse are also on the horizon with the goal of creating operational efficiencies, enhancing training, and strengthening client interactions. Microsoft has an augmented reality application called HoloLens that motorcycle manufacturer Kawasaki is using in their factories to facilitate supply chain management and the construction of robots. HoloLens allows workers to interact through visual cues when performing various tasks.

Several law firms have purchased locations in Decentraland as they prepare to utilize smart contracts for clients. Other examples where businesses are beginning to interact with the metaverse include:

• Facility management companies: These companies can utilize the metaverse platform for data gathering as well as training and repairs. Being able to train someone for maintenance of a building located miles away through the metaverse can save both time and money.
• Architecture, design, and construction firms: These firms can utilize the metaverse to create digital twins, an environment mirroring physical reality (i.e., a real-time Google Maps). These digital twins allow clients to see and feel space, furniture, light, and views.
• Farmers: According to Global Ag Tech Initiative, digital twinning of farmland or grain facilities will allow farmers to learn to plant more efficiently and anticipate more accurate yields. Also, new farming equipment can be seen in 3D to experience utilization prior to purchase.
• Financial services: Finance Monthly reported the establishment of J.P. Morgan’s Onyx Lounge in Decentraland was based on the view that a “robust and flexible financial structure is critical” for the digital world to succeed, and J.P. Morgan wants to be at the forefront of creating interoperability between multiple payment and financial structures.

ARE YOU READY?

With its ability to streamline processes, save time and money, and allow further engagement with customers, it’s clear that organizations will be swayed to interact with the metaverse at some point. However, there are many areas to consider as you evaluate your company’s metaverse engagement. Before taking off into the metaverse, consider these questions:

• How does the metaverse fit into your strategic plan? Will being in the metaverse enhance your current operations, client interactions, employee training, or brand positioning?
• Will the metaverse present new efficiencies, speed to market, or cost reductions? If so, over what timeframe will these changes occur and who will benefit?
• Do you have a change management plan for large initiatives?
• How far is your organization with its digital transformation projects?
• Is your data organized and 3D ready? Are you comfortable with your cyber and data security plans for the metaverse?
• Does your team have the skills to manage a metaverse strategy?
• Do you have a trusted partner that can guide you through any financial ramifications of being in the metaverse?
• Are you prepared to accept or pay cryptocurrency for any transactions in the metaverse?
• How much are you prepared to spend each year on your metaverse initiatives, and are you budgeting for it in your three-to-five-year plan?
• What are your competitors doing in the metaverse?
• How are your customers or clients entering the metaverse, and what are their expectations for your involvement?

There’s tremendous curiosity about the opportunities the metaverse affords—as well as trepidation. Consideration of these questions and a discussion with customers, clients, employees, board directors, and industry experts will help clarify the right steps to take in preparation for capitalizing on the opportunities the metaverse presents.

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