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The Metaverse

From hype to a new business model

Approaches
What Is the Metaverse?
Glossar
Wait and see or – seize the opportunity?
FAQ

The “metaverse” is breathing life into a virtual world that has the potential of becoming the digital equivalent of the real world. It enables an entirely new digital experience that allows retailers, the consumer goods industries, manufacturing companies, banks and insurance companies, the healthcare sector, and the public sector to communicate with their target groups. The big question on everyone’s minds is: should we seize the opportunity now or just wait and see? We’ll provide you with background information and our advice here.

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Metaverse Fashion Week


A fashion week is always a big deal for the fashion industry and fashionistas from all over the world, no matter whether it’s in New York, Milan, Paris, or Berlin.

But a very special fashion week took place for the first time running from 24 to 27 March 2022. The “location” was the famous metaverse. Around 60 designers and fashion companies, including well-known brands such as Dolce & Gabbana, DKNY, Tommy Hilfiger, and Elie Saab, showcased their collections in this virtual world.

Nearly 108,000 visitors navigated this fashion week as avatars and enjoyed the creations in over 70 shows and 36 cyberstores. The individual pieces could be purchased directly from the companies or from the virtual department store of the British retailer Selfridges as digital versions; in some cases these could later be exchanged for physical products.

Early Adopters in the Metaverse

There is still a fair amount of hype surrounding the metaverse, but quite several early adopters are already making their first moves and gaining experience. It would seem that the fashion industry is also forging ahead. The German Association for the Digital Economy (BVDW) came to this conclusion according to its recent study. It found out that 82 percent of respondents see the fashion sector in this role, followed by the media and entertainment sector (74 percent). The study explains that “The fashion and entertainment industries have been moving forward in tandem for some time. This is borne out by numerous collaborations entered into at an early stage – from fashion shows in the metaverse to virtual brand clothing in games. Such combinations of real and virtual worlds will lead to new developments in many areas.”

In the Wake of the Fashion Industry, Metaverse Applications Are Currently Emerging in a Variety of Other Industries. Here Are a Few Examples:

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Retail and consumer goods

Retailers are creating their own virtual shopping worlds and interweaving the metaverse into customer loyalty programs or the topic of sustainability, as Kaufland is doing with the virtual island Kaufisland (a blending of Kaufland + island). The new Starbucks Odyssey experience allows members to earn and purchase non-fungible tokens (NFTs) that unlock access to new, intriguing coffee experiences.

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Media and entertainment

The metaverse offers new possibilities for the media sector to incorporate their stories. It can authentically integrate the different brands into the virtual world of the metaverse and, in turn, appeal to young target groups, in particular. New sources of revenue can be tapped by selling products. In addition, they can become the meeting place for a new generation of creators.

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Healthcare

The metaverse will take telemedicine as we know it today to a new level. This applies to collaborative interventions involving external specialists worldwide, as well as to robot-assisted surgery, remote monitoring of patients, and remote consultation with specialized physicians. New levels of efficiency can be tapped by integrating all players in global healthcare.

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Energy and utilities

The metaverse also offers a wide range of opportunities for utilities. It enables grid operators to collaborate with other infrastructures in municipalities in entirely new ways. The metaverse can decisively simplify remote maintenance for energy-producing facilities such as offshore wind farms. The metaverse also provides benefits in terms of communication with customers, such as via virtual energy consulting.

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Public sector

The key areas in which city and municipal governments can benefit from the metaverse include marketing activities, business development, and digital services for citizens. This redefines the concept of the smart city. Seoul, the capital of South Korea, is considered the blueprint for municipal governments' use of the metaverse. A pilot project was started there in May 2022.

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Manufacturing industries

The metaverse opens a whole new dimension to the industrial sector in conjunction with the Internet of Things. For example, installation maintenance work can be offered originally via digital twins and avatars. Augmented reality (AR) and virtual reality (VR) devices can be implemented to assist in troubleshooting the process. With the regular involvement of all stakeholders, entire design and manufacturing processes can also run more efficiently in the metaverse.

What Is the Metaverse?


The term “metaverse” is not new. It originated 30 years ago in Neal Stephenson’s novel Snow Crash. This novel describes a virtual world called the Metaverse in which humanity could escape the “meat space,” becoming increasingly dystopian.

And virtual worlds in which visitors can move around as avatars, interact with each other, and purchase virtual products are not new either. The best-known example is Second Life, launched by the developer LindenLab in 2003. Often ridiculed for its slow success, the platform still generates remarkable revenues by selling virtual properties and products (exact revenue figures are not available, mostly figures between $75 and $100 million are mentioned). However, the metaverse differs from Second Life in significant ways. For example, the metaverse is not driven by a single developer but by various companies – most notably Microsoft and Meta.

Unlike Second Life, the metaverse is decentralized in philosophy and technology. In addition, it creates a link between the physical world and the digital, virtual world. It is always “up and running,” and there is no limit to the number of users. And there is one more advantage. Digital objects can be freely exchanged in the metaverse.

Your Guide Through the Maze of Terms

When dealing with the metaverse, you will repeatedly come across several terms, and their meanings are often not entirely clear. We explain the most important ones for you.

  • The terms Web3 and Metaverse are often mistakenly equated. The term Web3 describes a set of technologies that support the development of decentralized web applications (see below, for example, peer-to-peer and blockchain). In short, then, Web3 is a technological foundation for the metaverse, not "the metaverse" itself. Moreover, there are metaverse applications that use Web3 technologies only partially or not at all.

  • The terms Web3 and Web 3.0 are also very confusing. While Web3 describes the technological basis for the metaverse as well (see item "Web3 in this glossary), Web 3.0, often also referred to as the "Semantic Web," stands for a further development of the World Wide Web. It is based on standards defined by the World Wide Web Consortium (W3C). This is intended to enable the Internet to process information more "intelligently" using artificial intelligence. To this end, websites are to be linked to each other and be able to interact.

  • Communication in P2P networks occurs between individual computers – an aspect of decentralization – and not via servers. Participants are directly linked and have equal rights.

  • Blockchain technology enables the transmission of information in a highly secure manner. This allows digital transactions to be documented reliably and traceable for all users. It creates the trust and transparency necessary for interaction in the metaverse.

  • The abbreviation stands for a non-fungible token, which describes the digital proof of ownership of intangible assets. NFTs have become known through the hype surrounding digital artworks, for example. They are also common in computer games so that users can acquire objects. Ownership can be clearly proven via the blockchain.

  • This is an umbrella term for technologies such as augmented reality (AR) and virtual reality (VR), which merge the physical and virtual worlds.

The Digital Presence in the Metaverse

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© Kaufland | “Kauf Island” and “Phil Leita”: How Kaufland “tests the waters” of the metaverse with its own island on Animal Crossing

Companies that want to show up on the metaverse typically purchase a digital property or building on a metaverse platform and design it to their liking. Examples of such platforms include DecentralandHorizonWorlds on Meta’s Oculus platform, Animal Crossing from Nintendo, RecRoomRoblox, or even The Sandbox. It is not without reason that their roots often lie in the gaming sector, because in network games, 3D worlds and the interaction of users with each other have long been established.

Three-dimensional content elements are necessary for the design of digital presences in the metaverse (digital assets). These can be clothes, accessories, furniture, everyday products, devices, and machines – basically everything we know from the physical world. 

A New Discipline of Applications Is Developing for the Creation of These Elements


We already offer such a solution today. Here is an overview of the functions:

  • Cost-efficient, automated, data-based production of visual 3D content of the highest quality.
  • Support for Universal Scene Description (USD) files – each asset can be used for AR and VR as well as for offline rendering
  • Delivery of content through our Content Delivery Network (CDN) to all applications worldwide
  • Marketplace and exchange for 3D assets
  • Provision of NFTs for digital twins of real-world models such as furniture, clothing, and more 

The Importance of the Metaverse

Without a doubt, there is still much hype surrounding the metaverse today. There is a lot of talk about it, and the early adopters are making their first moves, but it is not yet possible to gauge how things will develop. However, this makes the metaverse no different from many other technologies; people even doubted the Internet initially.

Nevertheless, confidence in the future viability of the metaverse already appears to be high. For example, market research company Gartner predicts that by the year 2026 people will spend up to an hour a day on the metaverse. Experts then predict that the hype surrounding the metaverse will turn into new business models.

This view seems to be gaining ground among companies, as well. According to a study by the German Association for the Digital Economy, 35 percent of the companies surveyed plan to invest in metaverse projects in the next two years. And according to a German study by the EHI Retail Institute in Cologne, Germany, 60 percent of the retail companies surveyed think the metaverse is not just hype and will catch on.

Seize the Opportunity Now or Just Wait, and See?

The metaverse offers companies, municipal governments, and institutions a variety of benefits. Here are a few of them:


Development of new target groups and business areas

Companies can leverage their presence in the metaverse to tap into previously inaccessible target groups, such as consumers with a particular affinity for digital media or those who did not find the desired consulting experience in two-dimensional eCommerce. 

New products or product ranges

Digital versions of real products open new sales opportunities; for example, experience in the fashion industry shows that customers are willing to pay for them. 

New shopping experience for customers

The fusion of the physical and virtual worlds and the highly personalized digital interaction with customers enable a new kind of customer experience.

New channel for marketing and PR

Metaverse users immerse themselves as avatars in branded brand worlds. They can experience companies and products more authentically than possible with websites, online stores, or social media.

New brand image

Early presence in the metaverse positions companies, municipal governments, and institutions as open-minded and innovative.

New possibilities for market research

The metaverse offers a wide range of possibilities for market research. Products can first be tested in digital form in the metaverse before they are manufactured in real life. 

Saving resources

Companies can achieve significant savings thanks to the new possibilities of digital interaction, such as virtual, highly personalized customer advice or virtual collaboration with partners. 

New ways of working

The metaverse opens new ways of collaboration between companies and their partners. It also redefines remote working because it enables interactivity and team-based work in the virtual space. 

New policy regarding a company’s location

A company’s virtual presence in the metaverse means that it will have scope to rethink the company strategy for its presence in the real world.

These arguments are convincing enough to get involved with the metaverse today. Companies need to determine whether and how they can benefit from the metaverse and formulate their metaverse strategy.

We have built a dedicated team that constantly monitors the further development of the metaverse. We rank opportunities, determine their current relevance, and identify short and medium-term potential at an early stage.

Your Contacts for Metaverse

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Nicolas Ley
Expert around the Metaverse
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Eduard Kopilevich
Expert for trend topics in retail