Improved accessibility to the metaverse has paved the way for exciting new possibilities in luxury. But, the popularization and proliferation of the metaverse has also been met with intrigue if not skepticism, prompting many adopters to step back and reassess the metaverse’s real-world value.
Speaking at the ‘Jing Meta X Geeiq: Is the metaverse enough? Exploring mixed reality, phygital and luxury in Web3’ webinar on May 22, D-Cave founder, CEO of BVX, OTB Group and Aura Blockchain Consortium board member Stefano Rosso, and founder of metaverse data platform Geeiq, Charles Hambro, addressed these issues, including multi-format strategies, the role of phygital experiences and how they can enhance brand engagement, and why brands should be tapping mixed reality’s snowballing success.
Metaverse isn’t dead, it’s just maturing
Hype surrounding the metaverse has dropped this year. The dip in attention across the NFT market led to numerous media publications heralding the metaverse’s demise.
Hambro disagrees, instead pointing to how the digital space has simply evolved from hype into a maturing ecosystem whose development is being propelled by physical assets.
Today, the digital world’s evolution is at a tipping point – one the physical realm is playing a large role in shaping.
Phygital experiences have become a key integration tool used to enhance the consumer journey. They provide a convenient entrypoint to Web3 and its social spaces.
“Lots of brands went in with a public relations objective, to look innovative. But what the value is beyond that, is the big question,” Hambro says. Founded in 2018, Geeiq aims to equip brands and companies with the data needed to effectively navigate the metaverse, and create enriching consumer experiences. “What we’re now seeing is a lot of phygital NFTs driving this value, with a lot of value connected to the physical goods themselves. The question is: Are people buying these connected NFTs to access the physical product, or are they buying them to become part of a community?”
Hambro notes that Nike is able to sell a single pair of phygital sneakers for an average of $1,135 through its collaboration with RTFKT, thanks to the product’s multi-format appeal. The tie-up’s Cryptokicks project enabled Nike to sell almost 15,000 pairs of shoes for $16.8 million, with the most expensive pair selling for $70,000.
Not only do these numbers demonstrate the metaverse’s potential, they also signal the next phase of the attention economy’s development. This is particularly evident in the world of gaming, an industry that’s rapidly overtaking Web2’s social platforms as a communication platform for consumers.
“The metaverse is a huge communication vertical that has previously been ignored and is now starting to be understood,” Hambro says. “There are areas in the metaverse that remain unscalable, but there are elements like gaming platforms where for years people have, and still are, spending time, attention, and money on digital goods, which can’t be ignored.”
Adapt, or perish
The potential of phygital products spans multiple areas, including digital twins, token-gated experiences and near-field communication (NFC) technologies. While physical counterparts took the limelight last year, this year brands are more focused on delivering greater value through technologies like the blockchain and the metaverse thanks to consumers’ calls for better transparency.
“NFC is the easiest to use technology available today that digitally provides access to information,” Rosso says. “This technology may seem kind of banal, but it’s actually huge because a lot of consumers can’t be 100 percent sure whether their product is original or not as companies are scared to authenticate a fake product.”
The Aura Blockchain Consortium is committed to exploring the transparency and value of the second hand market in the metaverse.
“The Aura platform provides access to the technology, but it’s up to each brand how they present the information on it. You can add information across the entire production process, or use the tech to provide access to events and product recommendations,” Rosso says.
There are, inevitably, still some issues to overcome. “Where there’s money to be made, there’s going to be fraud. For example, if someone swaps out the NFC chip, now suddenly they can copy that chip and the whole system falls apart,” Hambro says, though he believes these challenges will be resolved as the virtual landscape matures.
“I do think technology will get better and better – eventually we’ll get to a stage where we can authenticate properly,” he adds.
The wrong metric?
For brands striving to create sell-out collections and achieve virality in the metaverse, Rosso has a word of advice. The best measure of success is, he says, the ability to foster an authentic and active community. But a brand’s commitment to its fanbase needs to be more than performative.
“Communities can smell fakeness a mile off. You can’t trick them or try to sell them something you’re not 100 percent sure of, because they will know,” Rosso says.
To maintain a loyal following in Web3, openly admitting to mistakes is a must.
“Nobody’s perfect. Communities value someone who is okay admitting when they have screwed up or made an honest mistake, rather than someone who is trying to persist regardless. The fact that everybody was initially just trying to flip and make an extra dollar selling NFTs has hurt the space quite a lot,” Rosso says.
Phygital and mixed-reality experiences enable brands to work in new ways with consumers through co-creation, ultimately cultivating a stronger brand-to-audience bond.
For example, Diesel’s phygital NFT collection last year (which Rosso orchestrated) invited consumers to participate in the design process through votes, allowing them to choose the final version of the product before it was sold and shipped out.
One foot in reality
Before the popularization of digital goods, brands relied on their physical products to sell. Geeiq founder Hambro believes that, even with the rise of virtual assets and the metaverse, brands shouldn’t forget about the importance of a real-world presence.
“We cannot forget that these brands create physical products, and there’s a lot of value in that. It’s why a lot of people follow these brands, so when you remove that element of it, you really need to think about how you’re adding value,” he says. “The best collaborations are those that aren’t purely digital, or aren’t purely physical.”