The concept of the metaverse has been known since the 1990s mostly to fans of Neal Stephenson’s science fiction literature. And then Facebook changed its name to Meta. Suddenly, the entire world has started searching for information on the meaning of the term. The scale of growth is shown by a graph of searches for the word “metaverse” on Google.
What is the metaverse
What is the metaverse? Zuckerberg leads us to believe that, in the near future, we will be bored with social media as we know it today, video games and 2D streaming portals, and the future will belong to creators of 3D digital platforms, virtual reality (VR) games, and movies that we ourselves will be a part of, all thanks to the metaverse. Or maybe not “thanks to” but “in” the metaverse?
Digital technology, the benefits of which we have been enjoying for years, despite its ubiquity, has so far been used piecemeal for purposes that are designed to meet needs or improve real-world processes. The metaverse changes this approach, as it makes the application of technology fully holistic. So, what is the Metaverse? Wikipedia defines the term in a way that is, shall we say, to put it mildly … gibberish: In futurism and science fiction, the metaverse is a hypothetical iteration of the Internet as a single, universal and immersive virtual world that is facilitated through the use of virtual reality and augmented reality headsets (Source in link). That’s right. So, what is the metaverse?
What speaks best to me is a description I found on Advertising Week, which I am quoting in the original in order not to change the meaning:
With a growing millennial population where half of them have grown up with video games, e-sports, and social media, many of them see the emerging metaverse as a modern day mall; a connected world where they can hang out, shop and socialize.
And also this one from a study by J.P. Morgan:
The metaverse is a seamless convergence of our physical and digital lives, creating a unified, virtual community where we can work, play, relax, transact and socialize.
(Sources in links)
Interpenetration of the virtual world and the metaverse
In order to understand the phenomenon of the popularity of such undertakings as Gucci Gardens, Vans World, Nikeland, Onyx lounge by J.P. Morgan and other examples of first attempts at the appropriation of virtual space, one should first explain what Roblox, Decentraland, The Sandbox, Somnuim Space and Cryptovexels are and understand the reasons for their popularity. However, in order not to get off topic, I wanted to focus on discussing a few examples of promotional and loyalty implementations, leaving the issue of branding aside. Here are a few of them.
Examples of loyalty and promotional activities in the metaverse
Qatar Airways has created Qverse, a mapping of the passenger experience at Qatar’s capital city Doha Hamad Airport and its various cabin categories in Economy, Business and First Class by providing a metaverse representation of the airport infrastructure, lounge and aircraft interior before passengers even begin the ticketing process. The current photo-based functionality, familiar to anyone who has ever purchased an airline ticket and accessible at one of the final stages of the ticket booking process, will be replaced by a completely new approach to enhance the passenger experience. It is not difficult to imagine that the use of this technology will also change our approach to making decisions about choosing a hotel room.
Usually, sooner or later, when discussing the metaverse, the term NFT (non-fungible token) comes up in conversation. Here at least, Wikipedia is able to help, as it provides a comprehensible definition. According to it, a non-fungible token (NFT) is:
a unique digital unit of data based on blockchain architecture that protocol users can trade among themselves, representing a wide range of tangible and intangible objects, such as collectible sports cards, virtual real estate, or virtual artwork. NFT is a type of cryptographic token. Unlike other tokens and cryptocurrencies, all NFT tokens are characterized by indivisibility and non-convertibility. No two NFT tokens represent the same string of data. NFTs have their roots in the Ethereum ecosystem, where they first appeared. Owning a given token does not entitle us to copyright the object it represents. For that, you need a proper legal contract. An artist can sell an NFT token representing their work, but not transfer the rights associated with the change of ownership to the buyer. In this sense, NFT tokens are separate from copyright.
An interesting application of NFTs in promotional activities comes from the Australian market. The organizers of the Australian Open prepared (and sold out within 4 hours of the launch) NFTs within the framework of The AO Art Ball action in which 6776 digital tennis balls were designed (each in a unique design) divided into 3 categories, including those referring to the history of the tournament or designed by famous artists. The tennis court was divided into 6776 sections and each ball was assigned to one of these. Each time the ball hit the section of the tennis court to which the participant’s NFT was assigned during the tournament, he or she received points and a number of privileges related to the cheering experience itself. The winners were awarded 11 original balls used in the final matches of the competition.
As the above case study shows, the use of NFTs can be expected in the form of paid membership (a ticket?) to the world available to fans of a given project (in addition, with a collector’s streak), invitations to events prepared for a closed group of all kinds of VIPs or as a pass to virtual events such as webinars, training courses, etc. Examples? Here you go. Long before the opening in New York, the owners of the Flyfish Club restaurant sold memberships in the form of NFTs, whose value on the secondary market have reached amounts of over 25,000 USD. Why the interest? Flyfish Club is no ordinary restaurant. It’s a venture described as “the world’s first member’s only [sic] private dining club” behind which Gary Vaunerchuk, among others, is an entrepreneur and author of several bestsellers such as “Crush it!” and “The Thank You Economy.” And the privilege of dining at this restaurant is contingent on the purchase of a specific NFT. So the question arises, “How much is this membership worth?” There are two levels. Basic (Flyfish at 2.5 ETH and Flyfish Omakase at 4.25 ETH) – you’d think the price would be in dollars, but I guess not. But making it easier – the ETH exchange rate on the day of writing this is just under $2,000. So, 4.25 ETH is equivalent to $8500. What’s more, the number of NFTs – and thus future visitors – is limited to just over 3000 units. That’s why the aftermarket markup on the NFT price was 3.5 times. It’s hard to find a better example of NFTs accelerating popularity.
For the world of loyalty programs and the metaverse to begin to intertwine, it’s essential that e-commerce first assimilates into the metaverse. Only then will anyone seriously start to think about how to transfer the two fundamental pillars of loyalty, i.e. value and experience, to the new reality I’m trying to briefly discuss in this text. As an aside – an interesting issue is whether e-commerce in the metaverse will sell real or virtual products. In other words – will we be buying shoes there for us or… for our avatars? However, this is a topic for a separate text.
Interestingly, the most serious studies on the metaverse are prepared by investment banks. Both J.P. Morgan and Morgan Stanley, to give but two examples, have prepared in-depth studies dedicated to this issue. Why? The statistics provided in the study “Opportunities in the metaverse. How businesses can explore the metaverse and navigate the hype vs. reality” speaks for itself. The annual market value of virtual items (which can only be used in the metaverse – like clothing for an avatar) already exceeds $54 billion, and the capitalization of all NFTs issued is $41 billion.
While I don’t believe that Poles will follow the example of the U.S. in spending time in virtual spaces derived from the worlds of games, putting on bulky virtual glasses or headphones after work, I am convinced that whoever proposes the first commercial implementation of promotional or loyalty activities in the real world, in which Polish consumers live, will enjoy the right of first refusal.
Would you like to learn about i360’s experience in metaverse implementations of loyalty programs, loyalty programs in the metaverse and find out what solutions we can prepare for your brands? Feel free to contact us.