How Brands Are Using Metaverse to Solve Business Challenges

Virtual worlds are capturing the attention of marketers and consumers. However, many brands are still in the early stages of adapting their strategies and approaches for this emerging virtual ecosystem.

While some companies have watched the evolution of virtual worlds from the sidelines with anticipation and curiosity, recent research shows that consumers are ready to engage with brands in new virtual environments.

According to Sitecore’s “Metaverse Perception” report, 42% of US consumers identify as Metaverse enthusiasts. Nearly nine in 10 (87%) also expect virtual worlds to play an important role in how they shop and interact with brands in the future. The report is based on a survey of 1,000 US consumers and a survey of 310 US consumer brand marketers.

“Consumer enthusiasm for this technology means one thing—the time has come for marketers to start planning and building metaverse-like experiences,” said Paige O’Neill, Sitecore Chief Marketing Officer. “Know who you’re targeting and what your customers want How you engage with those environments is critical to success.”

While the technology is still evolving, savvy brands are using this time to start exploring virtual environments as another way to reach consumers. According to a Sitecore report, one-third (31%) of marketers say Metaverse is already part of their current marketing plan, and 55% plan to use it in the future. Marketers willing to experiment and delve into the metaverse envision these virtual environments as a way to address brand awareness (68%), customer engagement (59%) and new product or category creation (55%).

In support of these lofty goals, 57% of marketers are using or planning to use the Metaverse as a novelty item to pique buyer interest, and 55% use it as a way to test products. Half of brands are using or planning to use Metaverse as a gamification feature to engage buyers, while 40% see Metaverse as a customer experience tool.

As far as consumers are concerned, they want to use the Metaverse to expand their life experiences, such as “experiencing things they wouldn’t normally experience” (57%), “escaping reality” (51%) and “meeting new people” (79%) .

The survey also revealed that Millennials and Gen Z are the most likely to want to engage with brands in the Metaverse. With this in mind, 91% of organizations are targeting millennials with their metaverse strategies, followed by Gen Z (55%) and Gen X (52%).

O’Neill suggests that it’s crucial for brands to know how to target these different audiences in the Metaverse.

“Our survey shows that millennials and Gen Z value being able to access exclusive content, ensuring diverse representation in these environments, and being able to be part of a community,” she said. “Leveraging these preferences will be key to ensuring these consumer groups get the experience they want.”

Looking ahead, 67% of marketers believe that Metaverse will become the primary platform for interacting with consumers, and 79% of consumers believe that in the future they will spend more time on Metaverse than popular social media platforms such as Facebook and Instagram.

“To satisfy customers today, brands need to embrace this change in behavior and provide them with the right content on the platforms they prefer to spend their time,” O’Neill said.

Brands are Approaching the Metaverse From a Consumer Engagement Perspective

Augmented and virtual reality allow brands to create experiences that reinvent everything from shopping to customer support and employee engagement. Nearly three-quarters of organizations have considered the types of experiences they will create in the Metaverse.

The most frequently planned Metaverse features focus on personalization and interactive shopping experiences. Specific strategies might include incentivizing users with personalized recommendations based on past preferences, or allowing shoppers to use avatars to try or test products.

To further drive engagement with consumers, marketers plan to use emerging offerings such as creating community settings or forums for users with similar interests (57%), developing inclusive experiences that represent diverse user groups (55%), and by allowing Users receive event rewards (51%) for gamification experience.

“The concept of community has both marketers and consumers excited,” O’Neill said. “Nearly two in five (38%) consumers say they would be more willing to engage with a brand experience if they were able to join and connect with a community of ‘like-minded’ people. So it’s clear that capturing consumer Creating a sense of community, connection and belonging based on the interest of the reader is critical for brands building experiences in the metaverse.”

Measuring Brand Success in the Virtual Universe

As marketers focus on metaverse initiatives that support brand building and other upper-funnel efforts, they will need to determine how to measure success—not just in the metaverse, but as part of a brand’s overall marketing mix and brand marketing investments.

Currently, the most important ways marketers measure the ROI of metaverse activations are bringing new buyers to brands (54%), acquiring new fans (51%) and driving revenue from direct sales (50%).

According to O’Neill, one of the most effective ways to measure the success of the Metaverse is to demonstrate how it solves a specific business problem.

“If we look at retailers, their return rates have been going up, and that’s having a significant impact on their bottom line,” O’Neill explained. “But what if they could give consumers the option to see themselves in the item they want to buy before they buy it, without ever having to set foot in a store? That would be a game changer for retailers and consumers alike because it can help consumers make more informed choices while limiting returns to brands.”

Heading into 2023, it’s clear that virtual environments will be an important part of marketing strategies and budgets. In fact, nearly seven in 10 (69%) businesses currently or in the future plan to create metaverse experiences in 2023, and 48% of businesses planning to invest in 2023 spend 10-25% of their marketing budget on metaverse.

Over the next 5 years, 42% of marketers (including those who haven’t yet used Metaverse) estimate they will invest 10-25% of their budget in Metaverse experiences. Respondents also expect Metaverse spending to exceed advertising channels such as social media, digital and mobile.

“Overall, the findings suggest that the Metaverse already has broad appeal among consumers and marketers,” O’Neill said. “It’s a testament to the enormous potential of this technology. Virtual environments offer interesting new opportunities to connect with customers, and brands that are brave enough to explore and experiment with this new frontier now will reap the rewards in the future.”

Sponsored by Sitecore

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