Opportunity In the Metaverse Isn’t Just About NFTs — It’s About Interactions
NFTs shattered monthly trading records last week, generating $4 billion in sales on the OpenSea NFT marketplace. But as brands continue their exploration into the metaverse, it’s becoming clearer that the real value will be in creating deeper connections with consumers that extend across mediums and channels.
While there is certainly opportunity for brands to sell additional product in the metaverse—fashion retailers like Nike and Gucci are already working on developing pricing strategies for digital goods and services—branding experts believe the greatest long-term gains will be won through marketing approaches that focus on quality interactions and engagement.
“The metaverse is much more than a new, albeit virtual, market for brands to expand into. The opportunity for brands is beyond just selling an additional product — rather, it is about creating a new world of connection, cultural relevance, and clout,” says Anne Olderog, a branding strategist with more than 20 years of experience working with Fortune 500 companies.
As a senior partner at Vivaldi, a consulting firm and digital agency, Olderog points to the high number of brands with metaverse pricing points that are much lower than in their real-world pricing points. For example, Balenciaga’s collaboration with Fortnite, which sells skins (virtual clothing and accessories for avatars) that cost less than $10. When executed correctly, sales and trades in the metaverse generate more than just monetary gains. They lead to fresh relevance and a sense of community for global brands.
“The metaverse is not simply about imitating real life — fundamentally, the collision of new customer demands with the new possibilities of technology is about helping us solve new problems that have previously gone unsolved,” Olderog says.
One brand that’s taken a forward-thinking approach to the metaverse is Adidas. Adidas’ metaverse strategy encompasses limited-edition drops and scarcity. NFTs grant access to physical products, while zeitgeisty collaborations tap into existing communities with built-in hype. The concept of exclusivity is an important one for Adidas, as a growing number of experiences are only available within the metaverse. In an interview, Adidas senior director of digital growth Tareq Nazlawy said the company’s approach is to make people feel like they’re not just buying a product, but that they’re actually becoming a part of a larger community.
That sense of community will come to play a big role in how brands fare in the metaverse in the coming years. Lauren Fishbane of January Digital sees opportunity for brands to build deeper relationships with consumers, with virtual and immersive experiences allowing marketers to access the entire customer journey.
Overcoming Privacy Limitations
Even though the metaverse may eventually have walled gardens, Fishbane says NFTs will allow brands to continue owning and controlling their digital assets. With privacy restrictions now limiting how brands can engage across the internet, Fishbane says it will be worth watching how interoperability within metaverse spaces evolves as the landscape matures and brands find more effective ways to entertain consumers using VR and AR technology.
“The metaverse will follow a similar pathway to social media marketing, which also started as a community-driven, online space for social interactions with users,” Fishbane says. “And now that social media has become a force in advertising and commerce, it is easier to show that the revenue generation will eventually come as well.”
Brands that value creativity in marketing will find unparalleled opportunities within the metaverse as they develop new ways to connect advertising and experience. Fishbane sees marketing in the metaverse as the next evolution of brand storytelling — providing opportunities to reach all potential and current consumers with VR experiences.
Succeeding at connecting advertising with experience will require more than just creativity, though. Olderog believes that to succeed in the metaverse, marketers must be clear on what problems they are trying to solve. She says creating more NFTs without an answer to that question is simply the wrong approach.
“Creating cultural clout and fostering self-expression are problems that are far from simple, and far from being solved — despite being as old as humanity itself,” Olderog says. “As Nike’s recent acquisition of virtual sneaker creator RTFKT shows, the metaverse has plenty to contribute there. Every brand manager worth their salt knows that they are not selling pieces of textile or plastic stitched together but answers — or angles — to fundamental questions such as: Who am I? Where do I belong? Am I valued?”
Stephanie Miles is a senior editor at Street Fight.