What could the metaverse mean for the FMCG industry?

Dániel Kovács

Agile Transformation Specialist at OTP Bank

Published May 10, 2023

Metaverse has been one of the main buzzwords in business for the last two years, and for a good reason – many experts believe that it will be a significant part of the next generation of the internet. Although still lacking a clear and uniformly adopted / accepted definition, in our understanding the term “metaverse” refers to the convergence of the physical and the digital worlds, enabling new experiences where users are free to explore, work and spend their free time together. These experiences can be accessed through conventional devices (e.g. PCs, smartphones or tablets) and Extended Reality (XR) technologies, which enable new ways of interaction between businesses and customers.

Via the utilization of metaverse platforms, companies will have the ability to create closer engagement and stronger relationships with customers, which are especially valuable for FMCG brands. While there are still many open questions and dilemmas regarding the metaverse, in this article we intend to highlight some of the potential use cases applicable for future marketing or sales activities to be pursued within the metaverse.

Marketing and brand building

As people will spend more time with work and leisure in virtual worlds, brands need to prepare and integrate virtual advertising into their marketing strategies. However, these marketing activities might not resemble most of today’s ads as the reach and value of the virtual equivalents of traditional ad platforms are difficult to measure.

In the metaverse, longer-term experiences and community building should be the main driver of customer loyalty. In order to create memorable interactions with customers, brands should prioritize creating experiences that align with the brand’s values and the target customer segments’ needs.

● Sponsorship: through sponsoring virtual locations, events or even whole worlds, brands can reach and communicate to a wide audience. A successful example for this is Mountain Dew, who teamed up with Decentraland to organize an e-sports watch party, which had a Mountain Dew style location, live commentary, and free giveaway of wearable NFTs to boost attendance.

● Creating interactive games: Since the metaverse brings a lot of traits from the gaming industry, gamification could highly enhance user immersion and engagement. One of the most successful examples is Nikeland in Roblox, which has gained 21 million visitors since its launch (as of 2022 September). Through playable minigames, players can win different Nike branded wearables for their avatar, which gives another incentive for revisiting this world.

Using the metaverse as a sales channel for physical products

The metaverse is possibly the next step in the evolution of online shopping, since metaverse stores can replicate those crucial interactions between customers and products / services / sales personnel that traditional online shops lack. A more immersive online shopping experience makes it simple for customers to try before they buy, focuses their attention, and lets them interact with shop assistants. What’s more, the virtual world lets brands design stores which are not limited by the real world’s laws of physics, creating memorable shopping experiences that result in more time spent in stores and higher return rates.

● Product launches: creating attention grabbing experiences in the metaverse are great for accompanying the launch of new products. This is exactly what Heineken did with its new Heineken Silver: they created a virtual Heineken Silver item in Decentraland, which according to reports has generated around 2 billion impressions.

● Try before you buy: customers can virtually “try on” clothing through AR and VR solutions. One of the latest instances of this was by Christian Dior Couture, who used AR to enable customers to try on sneakers, which generated around 2.3 million views.

● Selling “phygital” products: today, buying virtual products is already mainstream in some industries which creates opportunities for brands to cross-sell: buying a physical product which comes with its digital pair could be widely spread in the age of the metaverse (the term “phygital” refers to blending physical and digital products or experiences). In 2021, Dolce & Gabbana already proved the feasibility of selling phygital products by auctioning a collection of real-world clothes with their NFT counterparts for around $5.7 million.

Creating virtual and virtualized products

In the last few years, spending on virtual products has been on the rise, especially among younger generations, for whom buying skins and items for their online avatars are perfectly natural and desirable. This spending is already considerable: for example, Fortnite has already made Epic Games one of the largest sellers of fashion, overtaking some traditional players in the industry.

Usability and self-expression are core selling points for virtual goods, and if the metaverse truly becomes a place where people spend lots of leisure and working hours, the demand for customization (e.g. avatar, location or vehicle) will increase. Therefore, creating a digital replica of a brand’s traditional catalog of assortment, or designing virtual-only goods could be essential for companies who wish to stay relevant in the age of the metaverse. These products will most likely be built upon NFT technology, which will also enable brands to create collections or limited-edition products, further enhancing community building, loyalty programs and cross-selling with physical products.

The coming age of the metaverse provides new platforms for brands to compete on, especially in highly competitive industries, where standing out is paramount. Although the “real metaverse” is not here yet, the opportunities the technology already provides today shouldn’t be ignored. To find out more about our views on the metaverse, please click here.