Metaverse: what does it really mean for organizations? Interview with Professor Bernadett Koles
06/10/2022
5 min
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While the term metaverse – referring to a network of virtual worlds – still doesn’t feature officially in some dictionaries, it has been described as one of the key economic trends for organizations to consider. Though many of its functionalities – like virtual and augmented reality, or cryptocurrency transactions, have existed for many years, the metaverse has created much interest for its potential in a wide range of domains including the way we work, socialize, learn and even buy or market products. We spoke to professor Bernadett Koles, a Professor of Marketing at IÉSEG who has been following and studying the development of these worlds and their potential to revolutionize our lives.
Firstly, could you please clarify what we mean when we speak about the metaverse?
The metaverse is an immersive computer-generated virtual 3D universe that integrates various online spaces. We might think of the metaverse as a complex and expanded future version of the internet with an added three-dimensional immersive layer that enables users to interact with one another as well as with the environment, whether for purposes of work, entertainment, gaming, socialization or while consuming products and services. The core building blocks are already there, but further developments are needed to leverage the immersive opportunities that come from the integration of physical and digital realities.
What do you think the metaverse will look like in 10 years time?
The basic concepts behind the metaverse are not new. It is more like an evolution that transforms the former Web 2.0-based virtual environments like Second Life and World of Warcraft to a more decentralized, accessible and integrated form. Second Life, one of the pioneers in virtual worlds, has been around for almost 20 years with its own virtual economy. This has enabled users to essentially live parallel lives, having jobs, missions, unique forms of entertainment and social interactions. By creating their personalized avatars, users could belong to communities, enjoy live concerts, attend college courses, or even exchange marriage vows with other residents and establish families. In the early years, user access could be rather cumbersome due to technical constraints. However, with emergence of more advanced, accessible and user-friendly technologies, the arrival of cryptocurrencies and blockchain technology and more tech savvy users, these virtual universes are no longer restricted to a ‘special niche’ audience. Undoubtedly, COVID has also played an important role in normalizing digital communication, interactions and engagements for the mainstream public, and ultimately demonstrated how some of our (formerly) physical activities can be carried out digitally. Consequently, as more interesting opportunities emerge, I anticipate metaverse will continue to evolve, with more companies pursuing creative ways to offer meaningful experiences for their customers.
How should companies and brands be thinking about the metaverse?
The metaverse presents a great way for brands to build relationships with their customers that enable deeper and long-term engagement. Viewing a new luxury fashion line, test-driving a new car, or visiting an art gallery or an exotic tourist destination; the options are limitless. What is particularly interesting is the possibility to tailor activities/services to people’s personal taste and preferences, moving even further away from the ‘one size fits all’ approach. And that is not a trivial matter, as it requires a diverse and multidisciplinary set of skills. For the moment, ‘outsourcing’ might offer a quick solution to companies. However, in the long run, companies might want to think about recruiting in-house talent that can collaborate across different levels and functions throughout the organization to ensure customer experiences that are not only seamless but are also relevant. Virtual influencers offer a good example here. Thanks to their social media posts and storylines, these computer-generated avatars attract a significant follower base (some are even in the millions). Yet, for the most part they continue to be created and managed by digital agencies who collaborate with select brand names, as opposed to being fully ’owned’ by the brand. This leaves a lot of untapped potential. In 2019, for example, KFC introduced their own branded virtual influencer ‘Colonel Sanders’ for a limited period of two-weeks that inspired a strong boost in follower engagement on social media platforms. While it was for a short period, the project generated a lot of hype and seemed to be a success. Perhaps other firms might use such examples to venture into creating their own branded avatars. Brand-owned virtual influencers might also represent a good way for firms to help their customers navigate their way, and transition, into the metaverse.
With more potential for collaborative and user-generated input, companies might need to cope with the increasingly limited control they may have over their content and brand narratives. This might pose some challenges for some organizations, particularly the more traditional ones with a ‘top-down’ structure. Part of the appeal of virtual worlds comes from the flexibility they provide users to run wild with their imagination. Companies will need to find the right balance between taking a lead in launching relevant innovations, while letting their customers participate in co-creating their content and storylines.
What are the potential impacts of the metaverse for the physical world?
What we know based on previous research on virtual worlds and online games is that instead of treating their ‘physical’ and ‘digital’ realities as distinct entities, users often treat them as a continuum. For example, individuals who are immersed in virtual worlds may look for experiences that enrich their offline existence and vice versa. Therefore, I think a mindset shift is required. Digital things – objects, possessions, identities – are often perceived to represent lesser value compared to their offline and more tangible counterparts. We find this not to be the case in our own work. Instead, there is a great potential for learning – as a person, as a community or as an organization – by leveraging virtual experiences and benefitting from their ‘spillovers’ to various aspects of our lives.
Much has been written about the potential of the metaverse, but do you have any words of caution for organizations?
The hype and excitement around the metaverse presents opportunities as well as risks. Although many managers might feel the need to get on board driven by a fear of missing out, perhaps not all of them might be ready to dive in right away. They may prefer to take it slowly, learning from best practices and helpful cases and this might be a wise approach for some. Customers’ time and attention are scarce resources, and just because you create something, it doesn’t mean they will come. Many businesses in Second Life didn’t make it; they were following the initial hype but didn’t have a clear purpose or reason for being there.
I would like to mention that I have seen some interesting collaborations between pioneering brands like Gucci or Balenciaga and gaming platforms. Gucci teamed up with Roblox in 2021 to launch an art installation ‘the Gucci Garden’ that could be visited by curious customers through their avatars. They could dress their avatars in Gucci products upon entering the garden.
Similarly, Balenciaga introduced a special line of digital outfits for their fans in Fortnite that was inspired by real-life items and could be purchased in their virtual boutique. The two examples provide a good illustration for how to leverage the continuum between digital and physical spaces. But perhaps even more importantly, these initiatives were successful not only because they were enjoyable from the user perspective, but were also relevant and authentic. It’s important for companies to embrace these values and to critically assess whether a particular project represents a fit with their overall identity, and contributes – rather than questions or hinders – their narratives.
When considering the risks associated with the metaverse on a more global level, I believe a wide range of concerns emerge, including privacy, the environment, social inclusion and customer well-being. It will be critical to sort out these matters sooner rather than later, and this will require careful consideration, regulatory leadership and multi-stakeholder collaboration and cooperation.
