From hype to a new business model
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.
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.”
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.
Extended Reality (XR)
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
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 Decentraland, HorizonWorlds on Meta’s Oculus platform, Animal Crossing from Nintendo, RecRoom, Roblox, 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.
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
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.
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.