The set of emerging technologies known as the metaverse promises to change, or at least enhance, almost everything about how we live and do business. However, these Web3 technologies remain marginal in most Americans’ life and work. Does it make sense for small businesses to invest time and money in the metaverse, or are conventional marketing channels more effective for generating a return on investment?
In 2021, Facebook renamed itself Meta and announced that its future lay in the metaverse. It’s a hard term to define, but “metaverse” generally refers to a new spectrum of technologies that blur the line between the physical and digital worlds. This includes everything from virtual reality and augmented reality to digital economies complete with real estate and their own blockchain-based currencies.
The metaverse also represents a new tech trend for marketing strategies. Imagine touring digitized versions of ancient civilizations and stopping by a merchant stall to purchase virtual products, and you’ve got an idea of the experience the metaverse offers.
Within the tech world, many expect the metaverse will eventually be as disruptive as the internet. But thus far, the metaverse and related technologies are in the earliest stages of consumer development. Cryptocurrencies, for example, are widely traded but don’t have the practical value of traditional money. Whether it makes sense for small and midsize businesses to get involved in the metaverse depends a great deal on what they hope to achieve there.
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So much of consumer technology is still limited to our screens. Fully realized, the metaverse promises to be a world every bit as immersive as our analog one. It will have its own economies with independent currencies, companies, products, services and real estate. As such, the potential for business is virtually limitless.
“While it is still in its early days, it is clear that the metaverse will revolutionize all aspects of daily life and work in the next decade,” said Jing Sun, CIO and co-founder of IoTeX, a provider of technology that connects devices to the blockchain. “It will transform the interaction between business and consumers, and will create brand-new opportunities for small and [midsize] businesses to thrive.”
For some small businesses, the metaverse may seem out of reach, but its potential could still be enticing. Web3 technologies, like the metaverse and blockchain, are still in their early days, offering businesses small and large the opportunity to experiment and try new things.
“The metaverse sounds intimidating at first, but in reality, it is easier to grasp when you think of it as virtual experiences brought via the internet. Many small businesses already use the internet to bring an experience to prospects or customers,” said Scott Guttenberger, VP of marketing at blockchain Topl, which aims to support sustainable innovation.
These kinds of experiences already include NFT giveaways and virtual storefronts far richer and more customizable than e-commerce apps. Big brands especially are using their considerable resources to test out the metaverse and other Web3 technologies, which could pave the way for small businesses to follow in their footsteps.
“Brands like Adidas and H&M have already started building their virtual stores and will also be working on creating Meta avatars for their salespersons so they can start selling in the virtual world,” said K.S. Shah, CEO of consultancy for World Consulting Group. Shah advises SMBs to “make attractive collectibles for children, as their buying behavior will surely decide your brand’s future in the metaverse.”
Last year, streetwear brand Vans opened a virtual skatepark to the 48 million daily users of the Roblox metaverse. Video games like Roblox are certainly a big part of the metaverse, but commercial activity in this new digital realm is not limited to brands associated with young people. Luxury brands like Gucci, which has a virtual shoe store; Balenciaga; and Burberry have all gotten involved. But is there a near-term opportunity in the metaverse for small businesses?
Global luxury, fashion and technology brands have spent millions on splashy metaverse debuts. However, it’s likely that they did it as much for media coverage as driving business. Most of the technologies expected to comprise the metaverse are not yet accessible enough, for businesses or consumers, to deliver direct return on investment for SMBs. In most cases, it probably makes more sense to take a small step toward the metaverse by accepting cryptocurrency or developing a smartphone app to test the waters.
Gates Little, CEO of altLINE Sobanco, which provides working capital loans to SMBs, said the metaverse offers potential value to small businesses, but added it is not yet a top priority for his clients.
“Unless you are a tech startup, I feel it makes no sense for smaller businesses who seek a local audience to adapt the metaverse,” Little said. “While I love the potential for virtual storefronts, interactive experiences and customer service, most SMBs aren’t going to see the benefit until metaverse is more widely available and understood.”
There are exceptions: Platforms such as Roblox encourage small businesses to grow within their ecosystem. But most will likely still find familiar digital channels more effective for reaching revenue goals. Tried-and-true methods, like using top email marketing software or a leading text message marketing service to reach target audiences, are more likely to generate a meaningful return on investment in the short term. Certainly before venturing into a metaverse, small businesses should at least have a very good understanding of how to find their customers there.
The metaverse promises to be a virtual world that is dynamic and inhabitable. It’s not hard to see why many businesses are excited to get involved. However, thus far the technologies that make up the metaverse have not yet reached maturity. Surely there are ways for many SMBs to profit from this opportunity, but venturing in remains a choice, unlike the online world almost all of us use. As with all business decisions, it helps to be informed and have a plan.