By Justin Banon, Co-Founder of Boson Protocol — Web3’s Commerce Layer
When we look back, 2022 will undoubtedly be a year that we’ll immediately associate with monumental shifts in attitudes toward regulation, security, and sustainability within Web3. While developments in those areas have been important, the industry as a whole must remain cognizant of the lessons learned over the past twelve months, particularly in the realm of the metaverse, which hasn’t yet experienced the same voracious uptake, and yet provides a wealth of untapped opportunities and potential. A recent McKinsey report forecasted that the revenue opportunities of e-commerce within the metaverse could reach a potential $2.6 trillion by 2030.
While Meta’s own metaverse has encountered skepticism, certain analysts expect Meta to rebound and become the top-performing stock in 2023, with the company steadfast in its determination to make the metaverse happen, devoting 20% of costs to the technology this year. Still, the metaverse doesn’t hinge on one company’s success. Now that we are past the peak of inflated expectations, a slope of enlightenment is very much on the way — and other major brands are already succeeding in this area. Walmart, Coca-Cola, and Gucci have all recorded sizeable numbers of sales in the metaverse to kick-start 2023, clearly illustrating the market opportunity.
Despite 2022’s cause for a dip in Web3 confidence, as we enter a new year, there’s a significant cause for optimism — and we still very much see the metaverse as the next logical step in the future of technology and the internet, just as smartphones were in the noughties, and so on and so forth. We are doubling down on our efforts and, like many others, are targeting commerce as the area where we see the most potential for the long-term growth of the technology.
While the markets might be discouraged, brands have not been deterred from setting up shop in the metaverse. Huge deals across technology, fashion, and sport continue to be penned in this space, with retailers and many of the world’s biggest B2C names continuing to incorporate this technology into their marketing strategies for 2023. The sheer volume of household names that continue to enter the space is a vote of confidence in the huge potential that the metaverse has when it comes to the future of commerce. We’ve experienced this first-hand with the likes of fashion giant Tommy Hilfiger as part of last year’s Metaverse Fashion Week and will continue to engage again this year, helping even more incredible brands to sell physical products as NFTs.
Continuing to build on foundational successes
In September, Ethereum-based virtual world Decentraland witnessed the sale of close to 6,500 wearables, highlighting continued engagement when it comes to commerce in the metaverse. This was in addition to the many engaged users that dropped into the metaverse for live events, music concerts, and to utilize other applications of the technology. These kinds of events continue to generate significant attention and opportunity in the virtual world, particularly for commerce. We see loyalty NFTs as having the power to drive the next bull run and believe that they are the key to creating a decentralized alternative to e-commerce in the metaverse. Leading brands are already implementing token-gated commerce to build new relationships with customers by offering unique loyalty programs and exclusive experiences in the metaverse — it’s no longer hype but reality. Ultimately, what we are seeing is the laying of the foundations for a ‘programmable economy,’ which will see the tokenization of real-life assets, and allow individuals to transition seamlessly between their physical and digital lives.
Needless to say, the untapped potential here is considerable — and one of the biggest endorsements for the metaverse comes from a company yet to fully embrace it, Apple. The tech giant has been infamous for letting its rivals try to get things right the first time while it ideates in the background, ready to deliver a ‘new’ product that makes the whole world sit up and suddenly everything finally makes sense. That ‘something new’, which will likely see the metaverse go mainstream, could arrive as early as April of this year with Apple set to announce its rumored ‘Reality Pro’ VR headset, most likely a metaverse offering along with it, and no doubt a commerce element to help fund it.
With all of this in mind, there is one thing that metaverse evangelists and cynics alike can agree on: the metaverse is not yet a fully populated ecosystem. And that’s just fine. After all, Rome wasn’t built in a day and neither will the metaverse be. It’s a technology that’s brimming with untapped potential, and this is what the biggest brands around the world have come to realize. Governments and regulators recognize this too and are working in anticipation of the technology taking off. At the World Economic Forum in Davos, the EU’s financial services commissioner Mairead McGuinness alluded to a new metaverse policy, containing a strategy for virtual worlds, which could arrive as early as May.
A commercial opportunity remains
Through my work in the metaverse and the world of fashion, I sincerely believe that as the space continues to grow and evolve, we’ll reach a stage where there will not be one fashion house or luxury goods brand that will choose to ignore the metaverse and its potential for commerce. And that’s just the one sector — the possibilities for the metaverse are truly global.
The adoption of any revolutionary technology has never been instantaneous. Progress in any capacity has always begun with skepticism, before achieving ubiquity. In commerce especially, the move to the metaverse will eventually be a shift as significant as what we’ve witnessed over the past two decades in retail, as people have moved away from brick-and-mortar to embrace online shopping. And we’ve only just begun to scratch the surface of the potential use cases. Applications in the area of Web3 loyalty may be the deciding factor for the average consumer.
Using tokenization and Web3 technologies, membership and loyalty cards have been replaced with NFTs. Loyalty points are being replaced with crypto — even widely-used personal finance apps such as Revolut are offering users crypto in exchange for engagement. This will ultimately benefit the consumer too. In Web2, the goal was to lock in customers and extract maximum value. Due to the core values of Web3, this will not be the case and brands are starting to realize this. While the dot-com era of social media and tech giants has been somewhat disingenuous towards consumer trust, Web3 industrializes it. Part of this shift from Web2 has seen Web3 loyalty programs altering the focus from value extraction to value co-creation and sharing. Centrally controlled, inflationary loyalty points will be replaced with a loyalty currency that better suits the needs of end-users, issued as immutably sound money on decentralized ledgers.
My expertise obviously covers the areas of commerce and loyalty, primarily, but that’s just my point — there is so much happening in this sector, my sector, that every industry should consider the commercial opportunity presented by this interoperable technology — as it could be the next big gamechanger for them. The metaverse won’t become mainstream overnight but by taking a long-term view, remaining growth-orientated, and acknowledging the shifting societal paradigm that’s playing out in front of us, any organization should be getting a clear indicator that now is the time to realize the potential of the metaverse.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
