Despite the first “true” metaverse not actually existing just yet, the concept is causing quite a stir. While there’s still a lot we don’t yet know about it, what we do know is that it has the potential to completely transform how people behave online.
Whether we’ll see consumers splashing the cash, however, is still up for debate.
Few could have predicted the enormous monetization of the internet in its early conception, so with the metaverse, only time will tell.
What exactly is the metaverse?
The metaverse is effectively a solar system of virtual worlds: an immersive environment that combines VR technology, avatars and digital assets in one persistent space. When the first-of-its-kind metaverse arrives, its users are expected to play games, socialize, shop, explore, invest – pretty much anything you can imagine.
When it comes to who is expected to participate, it’s more than likely to be younger individuals, with 42% of Gen Z & millennials keen on taking part.
Not only do these generations spend more time online, but 61% actually prefer spending time online than in the real world. What’s more, as avid gamers, Gen Z and millennials are already familiar with proto-metaverses like Roblox, Minecraft and Fortnite, making them prime candidates for the metaverse.
That isn’t to say that older generations won’t participate. After all, over 1 in 5 say they’re interested, and they’ve had more than enough time to get familiar with things like gaming – over two-thirds of baby boomers play games as of Q1 2022. In addition, they’re likely to be high-earners, so brands could be missing a trick if they fail to cater for older audiences in the metaverse.
Will people spend more in the metaverse?
While we can’t look into a crystal ball (or VR headset) to predict whether consumers will spend more in the metaverse, we do have our platform which offers some pretty telling evidence why they might:
- Consumers already prefer shopping online
- Consumers expect to shop in the metaverse
- People are already spending money on virtual experiences
- Early-adopters are big on premium brands
Let’s dive into the data on each point.
1. People already spend more time online
We’ve already seen online shopping become the norm – 59% of consumers prefer to shop online than in store. This is more or less the case for all consumers, except baby boomers where shopping in-store pips online by just three percentage-points.
But it’s not just shopping that consumers are choosing to do online. Many have also moved online to complete tasks that were traditionally done in person, such as working, banking, or even fitness classes. These are all things that could very easily transition into a virtual setting.
The same goes for how people research products and services as part of the purchase journey. Many shoppers head online to read reviews, watch product videos or ask for recommendations, which again is a habit that would lend itself to a virtual setting.
Another aspect that may affect how consumers spend in the metaverse is changing attitudes towards product ownership. Subscription services such as Netflix, Spotify and Fiit have made this the norm, contributing to a “pay for access” culture. 37% of Gen Z/millennials say they prefer paying to access a product or service than buying it outright while 51% say they would rather pay for experiences than products. These generations are the most likely to participate in the metaverse, so it’s very revealing about how younger consumers might spend their money there.
What we can learn from the dramatic shift from in-person to online experiences is that consumers are keen to embrace new ways of doing everyday activities. Virtual concerts from fan favorites like Travis Scott via Fortnite and immersive exercise classes from Trib3 via The Sandbox have shown us how just some of these activities are possible in a metaverse setting. If the appetite of consumers to digitize more aspects of their daily lives continues to grow, the metaverse could have huge potential.
2. Consumers expect to shop in the metaverse
The biggest indication that consumers will spend money in the metaverse?
They’ve told us.
43% of metaverse-potentials say they’re interested in browsing products while 41% say they want to shop. Out of 11 possible options, browsing products and shopping ranked 4th and 5th respectively, above meeting new people, exercising and making investments, so it’s clear that shopping is important to consumers.
Plenty of high-profile brands like Nike, Balenciaga and Gucci are already vying for a slice of the pie by experimenting with their own shopping experience on proto-metaverse platforms. Nike launched Nikeland on Roblox, Balenciaga collaborated with Fortnite, and Gucci have started listing virtual items for sale, including a virtual bag and sneakers, also via Roblox.
However, shopping is merely the tip of the iceberg. It’s important to remember that while buying products is a priority for potential metaverse users, it’s not the only thing they want from it.
Aside from browsing and buying products, there are a number of other potentially lucrative activities that metaverse-potentials want to participate in, including attending live events/concerts (41%), taking part in exercise (32%), and making investments (22%). 27% simply want to explore what these spaces have to offer.
With this in mind, brands need to consider new and creative ways of accommodating different activities in a virtual setting.
Consumers are curious and want to buy into experiences; the opportunities for consumers and brands in the metaverse are endless.
The key learning for brands? Think beyond virtual stores. Yes, some consumers want to shop, but it’s not enough. If brands want to make money in the metaverse, they should consider how they can create unique gamified experiences for their consumers that they’ll actually want to buy into.
3. People are already spending money in virtual experiences
As it stands, consumers are already spending a lot of money online. Plenty of brands are starting to think about how they can take advantage of this in the metaverse, with some already scoring great opportunities in existing virtual spaces.
There’s a lot brands can learn from proto-metaverses, like Roblox and Minecraft, about what the metaverse might be like, and more importantly, about the consumers who are likely to spend money there. One such audience are gamers, of which nearly 1 in 5 purchased an in-game item in the last month, according to our most recent data. They’re already buying things in a virtual environment, so it’s not hard to imagine them continuing this in the metaverse too.
Gaming will undoubtedly form a major part of the metaverse, so it’s a good place for brands to start if they want to learn more about how it might work. The relationship between gaming and the creator economy, which shows no sign of weakening, is a particularly important area that brands should take inspiration from. Partnering with influencers and content creators in these virtual spaces could help brands unlock new audiences that might otherwise be hard to reach.
Consumers are already creating, buying and selling virtual assets, and paying for virtual experiences in the metaverse.
But the metaverse could push this a lot further, offering new ways for brands and consumers to get involved in financial opportunities that couldn’t have been possible before.
A good example is Upland, a virtual real estate app that allows users to explore and purchase virtual real estate that’s linked to real towns and cities. While on the surface, it may appear a fun Sims-like toy, the earning potential is significant. For context, the NYSE sold for $23,000 in 2020, which goes to show the size of the opportunity for brands and consumers alike.
Another way that consumers can have more meaningful interactions in metaverse-like environments is participating in virtual travel tours. Westgro has launched a series of immersive games and tours that allow users to explore Cape Town without leaving their living room. It’s designed to educate and inspire children, and ultimately influence families to choose Cape Town as their next holiday destination.
Wesgro’s chief marketing and communications officer, Jean Scheltema says, “We want to use the potential of the metaverse as an immersive, 3D, online learning space, accessible to a large audience and leverage new ways to connect the physical world with the online one”.
The variety of virtual experiences already available in these early metaverse-style environments tells us that there’s no limit to what the metaverse might be able to do and who it will appeal to. The challenge for brands will be understanding how to create virtual spaces that really resonate with their potential customers, and making them commercially viable.
4. Early adopters are big on premium brands
Understanding how early adopters are spending and what influences their purchasing decisions is crucial for brands if they want to succeed in the metaverse.
So what can we learn? According to our data, over 1 in 3 early metaverse adopters say standing out in a crowd is important, and 38% more likely to say that brands should help them improve their reputation. Status is important to this audience and they’re not afraid to spend big on premium brands to get it (34% say they do).
For younger consumers in general, the importance of exclusivity and status is not a new thing. We’ve seen it used as a tactic time and time again in gaming: exclusive in-game cosmetics, limited edition gaming devices, and collector’s edition games are all very common today.
The same principle applies in the metaverse. Whether it’s owning an NFT, unlocking a hidden level in a game, or accessing a one-off virtual event, the exclusivity of it makes it very appealing. And, for some, spending money in the metaverse to buy virtual property or assets (that they would not be able to afford in the ‘real world’), can help them affirm a sense of status.
If brands want in on the action here, they should consider how they can distill this sense of exclusivity from early-adoption and bake it into their ongoing metaverse strategy.
The bottom line: our metaverse spending prediction
So while we can’t say with any certainty that consumers will spend more in the metaverse, there’s good evidence to suggest why they might. It may still feel like a way off, but now is the time for brands to work on honing their strategy if they want to succeed in this new territory.
One thing’s for sure, brands need to know exactly who their audience is and what they want from the metaverse before they do anything else. With GWI, brands can make better decisions with deeper insight into their target audiences with data across 2.7bn internet users and 4k+ brands.
Key things to take away:
- Consumers have already shifted many aspects of their lives online for many different reasons. If the metaverse can enhance their experience further, we could see a high level of adoption.
- The metaverse isn’t just about shopping. Gamification will play a huge part in every aspect of the metaverse, but creating unique experiences are key.
- Consumers value authenticity and exclusivity. But this means something different for everyone. The brands that will succeed in this will be the ones that research their audience to understand what this means for them and create experiences that they can buy into.