In this exclusive Q&A, Phil Rowley, head of futures at Omnicom Media Group, talks to ExchangeWire about how the metaverse has developed over the past two years, how it intersects with e-commerce, and the opportunities the metaverse could offer to brands and retailers in the near future.
To what extent do you think the last two years have galvanised interest in the metaverse?
To really answer this, it’s important to define what we mean by ‘the metaverse’; presently, there are many differing definitions of what the metaverse is, many of them incorrect or way too narrow. For me, the metaverse is, ultimately, a dimensionalised or virtualised internet. It isn't just games which consist of interior worlds. And that means that you could consider alternative reality (AR) the metaverse as well, because ultimately, AR is a layer over the real world and digitisation, acting as a bridge between the two.
The last two years have certainly galvanised our interest in the metaverse. Because COVID forced everyone to adopt an interior lifestyle spent on certain forms of entertainment, gaming became a legitimate pastime, versus its status as a niche hobby some 20 or 30 years ago. However, this was already happening before the COVID pandemic: over the last 10 years, gaming has hit the mainstream, with games like Call of Duty and Fortnite becoming multi-million dollar franchises. There’s something about gaming, as it morphs into the metaverse, which has captured the imagination of media planners, advertisers, and creative types, meaning the technology behind the metaverse, and the development of it as a media form, had already gathered pace before the first case of COVID was even recorded.
How has e-commerce been shaped by the events of the past two years?
About 18 months ago, Omnicom did some research into how the pandemic has affected e-commerce and retail. Before the pandemic, online sales were about 20% of retail, but this rose to 30% during lockdown. While this figure isn’t guaranteed to stay at 30%, I think that there will be people who have availed themselves to online services who wouldn’t have had the pandemic not occurred. While it isn’t likely that everybody will turn to e-commerce 100% of the time, many will have new options that they’ve learnt to use for the first time.
So, we're dealing with a retrained population. We know that 63% of consumers - many aged 65 and above - said the way that they considered or the way that they obtained their goods and services had been “transformed” during 2020. Does this mean that everything will just move to being 100% online from now on? Absolutely not; there are certain goods and services which must be encountered in the physical world. There's still something about the tactile quality of certain products or services that cannot as yet be replaced by a digitised metaverse equivalent. So, what I foresee is that when goods and services can be made frictionless and there is no loss of experience as a result of buying online, then it's more likely that these will be available through e-commerce. When certain objects and physical processes require presence, however, it will be more likely that digitisation will augment and support physical interaction rather than replace it.
How has the metaverse intersected with e-commerce? Do you think they'll continue to intersect?
At the moment, there seems to be this idea that the metaverse will create a wholly virtual shopping experience, where we can explore digitised versions of stores and interact with objects. I think that, currently, this idea is overstated; the idea of a virtual shopping mall is not something that will have much reach and frequency in the short term. However, there is also the idea that the metaverse will allow e-commerce to become much more sophisticated, which I think we are more likely to see as brands move towards using dimensionalised media.
More subtle interactions and integrations of the metaverse, such as 3D digitalisations of objects, appear to me as the most natural points of intersection between the metaverse and e-commerce. Through AR, this is already happening in the real world; brands like IKEA and Amazon allow you to position furniture in your room through a phone lens before you purchase it. Augmentations like these are where intersections are most likely to be found, as opposed to a completely virtual reality shopping experience.
What marketing opportunities does the metaverse offer to brands and retailers?
Generally, I believe that the metaverse offers two opportunities for retailers and brands. The first of these is that the metaverse is a place where any brand can advertise in the same way it would advertise in the real world. Television, radio, and outdoor advertising all exist in the metaverse, meaning a brand can transfer all its existing assets directly into the metaverse and start advertising immediately.
The second opportunity is for retailers to dimensionalise their media, allowing customers to see and experience their products in greater detail before making a purchase. This is something that isn’t quite mature yet, though, in time, it could allow brands to elevate their advertising from 2D TV adverts and billboards to 3D volumetric scans of products. By allowing products to be rendered in three dimensions for the first time, the metaverse will contribute to the establishment of a new visual language for creative processes.
Do NFTs, and their prominence in the metaverse, have a role to play in the future of retail?
NFTs have come to prominence because they've been associated with artwork, with some of this artwork selling for millions of dollars. Media agencies right across the industry are receiving inquiries from their clients, whether they be in retail, FMCG, autos, travel, or finance, about the prospect of using NFTs in their advertising activity going forward, because they could be potentially a revenue stream. While that potential is there, it’s important that brands don’t get too carried away - the main reason why NFTs are garnering so much attention is because the artwork they’re attached to is selling for such insanely high price tags.
It’s true, the concept of an NFT does have some value in that it confers a protected status for certain virtual assets that can be used within the metaverse. However, the idea that any asset a brand could produce and mint could and should be turned into an NFT is perhaps misguided; a brand would have to create an NFT for sale and use in the metaverse for it to contribute to their e-commerce streams.