Ready to Engage With Customers in the Metaverse? Here’s What You Need to Know
With an estimated market value of more than $1 trillion in yearly revenue, the metaverse is quickly emerging as a significant opportunity for brands to engage customers and create a community of loyal advocates.
While it provides a wealth of marketing opportunities, the metaverse — a set of interconnected virtual reality (VR) worlds where people can interact with others, explore and create — also introduces a new level of complexity into customer experiences and raises many questions for brands. How can you connect the metaverse to traditional marketing activities? How do customers want to engage with brands in the metaverse — and do they even want to engage in the metaverse in the first place?
Clarus Commerce recently conducted a survey inquiring about consumer interest in metaverse activations. According to our findings, consumers would be most interested in virtual concerts (38 percent), shopping at virtual stores (31 percent) and playing virtual games (31 percent). Furthermore, 45 percent of surveyed consumers said they could be motivated to visit a brand store in the metaverse for a discount of some type.
Clearly, the metaverse holds value for brands and their customers. So, what considerations and best practices do brands need to keep in mind as they prepare to engage with consumers in this new and exciting space? With consumer concerns over data sharing online and substantial barriers to entry, the metaverse requires thorough planning and the right strategy that’s accessible, thoughtful and creative.
3 Considerations Before Entering the Metaverse
The metaverse is full of exciting and immersive elements for consumers, but joining it can be a daunting task for brands. That’s why you need to do research first and understand how your audience wants to engage in the metaverse — and what holds them back from participating already.
Our survey revealed three considerations to keep in mind before diving into the metaverse:
Barriers to Entry
The metaverse is expensive and the price tag may bar some consumers from joining. To experience the most immersive aspects of the metaverse, consumers must purchase VR headsets, which range from $300 to $1,400 depending on the model. According to our survey, only 31 percent of respondents are willing to spend more than $150 on a VR headset. Consumers’ willingness and ability to pay for access to the metaverse could limit the number of customers available to test your brand’s new metaverse offerings.
However, some brands (like Roblox and Decentraland) offer consumers the ability to virtually engage with their metaverse offerings beyond VR. Alternative options include smartphones, gaming consoles, computers and augmented reality (AR) glasses. The accessibility of your metaverse offerings should be tailored to your brand and target audience. Identify opportunities to create more accessible, parallel experiences so all of your customers are included. For example, offer a streaming concert on a variety of devices in parallel to a 3D metaverse concert. In addition to increasing participation, the streaming concert can serve as an entry point to transition consumers to future metaverse concerts.
Data Privacy Concerns
Privacy concerns are top of mind for consumers operating digitally — and the metaverse is no exception. Given the nascency of the metaverse concept, it’s not surprising that 46 percent of respondents said one of their main concerns for entering the metaverse is uncertainty over how brands will use their data. However, many consumers also said they’re comfortable sharing their email addresses (50 percent), names (43 percent) and gender (39 percent) in exchange for an exclusive experience with a brand in the metaverse.
While every brand wants to collect valuable zero-party data — i.e., data that a consumer intentionally and proactively shares with a brand — data requests can also create barriers to metaverse participation. That means it’s important to consider consumers’ security concerns and preferences about how you collect their data. Ensure your data collection strategy is transparent and flexible so customers feel confident their personal information is safe when engaging in the metaverse. Showing consumers how you use data to better personalize their experience can also help make customers feel more comfortable sharing.
The metaverse also presents many unique opportunities to observationally collect data. For example, customer participation in virtual activities (e.g., using a metaverse avatar to try on a brand’s clothing or accessories) can provide valuable insight into a consumer’s passions and interests.
The Role of NFTs
Non-fungible tokens (NFTs) — digital assets that show ownership of a digital or physical item — are the new buzzword in the retail metaverse and beyond. But are they worthwhile investments? When it comes to customer loyalty programs, shoppers could purchase or earn NFTs to unlock VIP perks, deals and rewards. Or consumers could collect NFTs as branded digital collectibles with intrinsic value from their favorite brands. For example, Gap recently launched a gamified collectible NFT experience allowing customers to purchase a limited-edition Gap hoodie. The experience was designed to further engage and expand Gap’s community of brand evangelists.
With more traditional rewards, the more customers redeem them, the more it can cost your brand. But if you offer digital rewards like NFTs, it’s a fixed cost. NFTs are an easily scalable incentive that can create urgency with only a one-time investment. Consider AMC, which offered NFTs to its loyalty program members that purchased advanced tickets to a showing of “Spider-Man: No Way Home.” The promotion was designed to drive consumers back to the movie theater, rather than wait for them to stream the film at home.
Even though the NFT market has cooled off from its peak, consumers are still excited about the offering. In fact, 17 percent of respondents said NFTs are a fun collectible and it doesn’t matter if their value fluctuates, and 14 percent said they're a good long-term investment. Because NFTs aren't widely accepted by consumers yet, it’s important to pilot and test NFTs to gauge your customers’ interest level and participation. This principle also applies to all of your metaverse offerings — testing and making improvements are critical for successful engagement with any emerging technology.
Unlock the Metaverse’s Value
The metaverse presents a significant opportunity, but many brands are wondering if customers are ready and willing to engage with them in this new space. Before you enter this market, consider how you can help customers easily access your brand in the metaverse. And with data privacy concerns continuing to rise, transparency around how you collect and use data is more important than ever.
At the end of the day, the metaverse is still very new — you need to test your engagement strategies and learn and improve as you go. Taking the time to understand how to best engage consumers in the metaverse will enable you to unlock its full value and encourage long-lasting customer loyalty.
Matt Kates is the senior vice president of strategy at Clarus Commerce, a leading customer engagement company specializing in loyalty programs and promotions.
Matt Kates is senior vice president of marketing at AdAdapted, a leading advertising technology solution that increases the purchase intent of shoppers and gets brands onto shopping lists and into carts. He most recently served as CMO of PrizeLogic and has a rich history across CPG and retail, working for PepsiCo, Quaker Foods Division and the Kellogg Company.
He has been recognized as an expert in the space, quoted in numerous publications including Adweek, Chief Marketer and Forbes. Kates earned his Bachelor of Science in economics from Northwestern University and his MBA from Indiana University’s Kelley School of Business.