How brands are using the metaverse to solve business challenges

Metaverse attracts the attention of both retailers and consumers. However, many brands are still calibrating their strategies and approaches to this nascent virtual ecosystem in its early days.

While some companies watch the evolution of the metaverse from the sidelines with anticipation and curiosity, recent research shows that consumers are ready to engage with brands in new virtual environments.

According to Sitecore’s ‘Perceptions of the Metaverse’ report, 42% of US consumers identify as metaverse enthusiasts. Nearly 9 in 10 (87%) also expect the metaverse to play a significant role in how they shop and interact with brands in the future. The report is based on a survey of 1,000 US consumers, as well as a survey of 310 US brand name retailers.

“Consumer enthusiasm for technology means one thing – the time has come for marketers to start planning and building metaverse-like experiences,” said Paige O’Neill, director of marketing at Sitecore. “Understanding who to target and how your customers want to engage with you in these environments will be critical to success.”

Although the technology is still evolving, smart brands are using this time to start exploring virtual environments as another way to reach consumers. According to a Sitecore report, one in three (31%) marketers say metaverse is already part of their current marketing programs, and 55% plan to use it in the future. Marketers who are willing to experiment and dive into the metaverse envision these virtual environments as a way to increase brand awareness (68%), customer engagement (59%) and the creation of new products or categories (55%).

To support these lofty goals, 57% of marketers use or plan to use the metaverse as a novelty to excite customers, and 55% as a way to test products. Half of brands use or plan to use the metaverse as a gamification function to engage customers, while 40% see the metaverse as a customer experience tool.

Consumers, for their part, want to use the metaverse to expand life experiences such as “experiencing things they wouldn’t otherwise experience” (57%), “getting away from reality” (51%) and “meeting new friends” (79%).

The research also shows that Millennials and Generation Z are the ones most likely to want to engage with brands in the metaverse. With this in mind, 91% of organizations are targeting millennials with their metaverse strategies, followed by Generation Z (55%) and Generation X (52%).

O’Neill suggests that it’s crucial for brands to know how to target these different audiences in the metaverse.

“Our research shows that millennials and Gen Z value having access to exclusive content, ensuring diverse representation in these environments and being part of a community,” she said. “Taking advantage of these preferences will be key to providing targeted groups of consumers with the experiences they want.”

Looking ahead, 67% of marketers believe the metaverse will become the dominant platform for interacting with consumers, and 79% of consumers believe they will spend more time on the metaverse in the future than on popular social media platforms such as Facebook and Instagram.

“To meet customers today, brands must embrace this shift in behavior and target consumers with the right content on the platform where they prefer to spend their time,” said O’Neill.

Brands approach the metaverse from a consumer engagement perspective

Augmented and virtual reality are allowing brands to create experiences that will reinvent everything from shopping to customer support and employee engagement. Nearly three-quarters of organizations have thought about the types of experiences they would create in the metaverse.

The most commonly planned metaverse features are focused on personalized and interactive shopping experiences. Certain tactics may include inspiring users with personalized suggestions based on past preferences or allowing customers to try or test an item using an avatar.

To further drive engagement with consumers, marketers plan to use new offerings such as creating community settings or forums for users with similar interests (57%), developing inclusive experiences that represent a diverse group of users (55%), and gaming experiences allowing users to earn rewards for activities (51%).

“The concept of community excites marketers and consumers alike,” said O’Neill. “Nearly two in five consumers (38%) said they would be more encouraged to participate in a brand experience if they could join and connect with a community of ‘like-minded’ people. So it’s clear that creating a sense of community, connection and belonging is key to attracting consumer interest in brands that build experiences in the metaverse.”

Measuring brand success in the metaverse

As marketers focus on metaverse initiatives that support brand building and other upstream efforts, they will need to determine how success will be measured—not just within the metaverse, but as part of a brand’s overall marketing mix and brand marketing investment.

So far, the most important ways marketers measure the ROI of their metaverse activations are bringing new customers to the brand (54%), gaining new followers (51%) and increasing direct sales revenue (50%).

According to O’Neill, one of the most effective ways to measure success in the metaverse is to show how it solves a particular business problem.

“If we look at retailers, they’ve experienced increased return rates and that’s had a significant impact on their bottom line,” O’Neill explained. “But what if they could give consumers the ability to see themselves in the item they want to buy before they buy it, without ever having to set foot in a store? This will be a game changer for both retailers and consumers as it helps consumers make smarter choices while limiting items that are returned to the brand.”

As we enter 2023, it is clear that virtual environments will become a significant part of marketing strategies and budgets. In fact, nearly 7 in 10 companies (69%) have current or future plans to build metaverse experiences in 2023, and 48% of those planning to invest in 2023 are devoting 10-25% of their marketing budgets to the metaverse.

Over the next 5 years, 42% of all marketers — including those surveyed who are not yet working with metaverse — estimate that they will invest 10-25% of their budgets in metaverse experiences. Respondents also expect metaverse spending to surpass advertising channels such as social media, digital and mobile.

“Overall, the study’s findings reveal that the metaverse already has broad appeal among consumers and marketers,” O’Neill said. “This is proof of the enormous potential of technology. Virtual environments present intriguing new opportunities to connect with customers, and brands brave enough to explore and experiment with this new frontier now will reap the benefits in the future.”

Sponsored by Sitecore

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