The metaverse is here to stay. Though it will remain nascent in the near future, interest among consumers and forward-thinking businesses is already high, and investment continues into making the metaverse a reality. Discover how enterprise leaders can make the right decisions in applying this disruptive tech.
In the first half of this year, over $120 billion in metaverse-related investments was committed– over twice the $57 billion invested in the whole of 2021. And that investment is finding an audience. According to our latest research, 60 percent of the large number of consumers already familiar with online worlds are excited about transitioning parts of their everyday activities to the metaverse.
Though there is no consensus definition yet, the metaverse represents a fundamental shift in the way we use the internet, evolving from something we primarily observe to something in which we are more deeply immersed. That would imply a future internet that is more open, immersive, and engaging than the mobile, mostly 2D, scrolling-based model today.
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Assessing the Potential Scale of Disruption
McKinsey & Company’s latest research indicated the scale of disruption that the metaverse could drive. The average internet user is set to spend up to six hours a day in online experiences by 2030, and the way they interact with companies, brands and products will be very different – particularly across broad ecommerce and consumer engagement/service use-cases, but also more industry-specific use-cases including immersive digital entertainment, digital twins in manufacturing sectors, and more immersive virtual learning and team collaboration.
95% of the global executives surveyed said they expect the metaverse to have a positive impact on their industry within five to 10 years. A further 31% expect the metaverse to fundamentally change the way their industry operates. And, more significantly, a quarter expect metaverse-related tech to impact a sizable share (~15%) of their total revenue in five years.
Considerations for CEOs Today
For many CEOs today, the key question needs to be less ‘what can we do in the metaverse?’ and more ‘how can the metaverse help deliver on our growth ambition?’.
Despite the high interest, we are still in the very early days of the metaverse and will be for some time still. It is only natural that many businesses have yet to fully grasp the scale of the opportunities (and challenges) ahead. Here are some potential actions at this stage.
Businesses with a digital presence, and particularly those with strong digital customer interactions, may benefit from starting to lay the foundations of a metaverse strategy now.
Hamza Khan
Partner and Co-leader of McKinsey’s Growth, Marketing & Sales Practice in UK, Ireland, and Israel
Acquire More First-Hand Experience of What Could Become the Metaverse
Before considering any significant actions, get some first-hand experience with metaverse technologies. Consider creating an account and avatar and trying out some multiplayer online gaming experiences – across Roblox, Fortnite or Minecraft, or web3 variants including TheSandbox.
The metaverse isn’t constrained to gaming: there are a growing number of mobile AR apps like IKEA Place, Snapchat, Google Lens. Or perhaps strap on a VR headset to try virtual experiences at your nearest VR venue. Or explore immersive commerce like the experiences AnamXR develops for fashion brands, which can be accessed directly in your web browser. Deeper and wider personal experiences may provide helpful insights to underpin business decisions.
Determine how the metaverse fits in your business strategy
Businesses with a digital presence, and particularly those with strong digital customer interactions, may benefit from starting to lay the foundations of a metaverse strategy now. This could include defining key metaverse goals, such as why you want to be part of the metaverse; whether you’re looking to meet existing consumers there or attract new audiences; and what the metaverse can contribute to your growth strategy.
This automatically gets into more operational questions: Should you focus on consumer-facing domains like brand marketing or customer engagement, or explore the potential in operational domains like manufacturing and logistics? Should you engage with the popular online worlds that brands are already active in today – or consider developing a proprietary experience for your brands’ fans?
Assess the Capabilities Your Organisation May Require in the Future
With first adopters like Gucci, Nike, and Snoop Dogg already creating immersive, virtual experiences and products, and scaling the capabilities to do more in the future – companies need to assess the skills they may need to compete in this future – including AI, experience design, XR development, use of IOT in manufacturing and operations.
Many organisations will need to source those skills externally. There is already a vast and (at this point) fragmented partner landscape to explore, from immersive commerce and general XR platforms to metaverse development agencies (developing for popular online worlds as well as for standalone experiences and assets). There is also the vast community of independent creators and developers that already been partnering with brands on influencer marketing and social commerce, who are shifting focus to virtual environments and assets as well. The demand for high quality creators will likely increase, so identifying, prioritizing and initiating these partner relationships now is already prudent.
Launch Initial Experimentation in the Most Promising Areas
Having addressed these points, a potential next step is to adopt a ‘fail-fast’ approach and invest in initial experiments. This may provide the opportunity to gauge the consumer response and potential impact, assess the capabilities of potential partners, and enhance your own internal capabilities in relevant areas like XR development.
Many brands are already offering their own uniquely compelling experiences, incorporating interactivity, social features, game mechanics, virtual-plus-physical tie-ins, and new content to keep the experience fresh. Trying out different approaches and taking a data-led approach to determining what connects most effectively could help develop a longer-term metaverse strategy.
These initial experiments will also help business leaders think through the guardrails they would want in place to make sure their organisation’s and customers’ experiences in the metaverse are ethical, safe, and inclusive; and that their business goals are being met.
Closing Thoughts
Whichever way the metaverse evolves in the future, it seems likely to play a significant role in businesses and consumers’ lives. CEOs have an opportunity at this point to plan and encourage initial experimentation in their organisations with new content types, customer experiences, and platforms– setting themselves up well for a vastly different future.
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Hamza Khan
Partner and Co-leader of McKinsey’s Growth, Marketing & Sales Practice in UK, Ireland, and Israel
Hamza is the coleader of McKinsey’s Marketing & Sales Practice in the UK and Ireland. He advises leading organizations on delivering digital and growth transformations. Hamza focuses primarily on e-commerce, digital ecosystems, sales and channel topics, and serves organizations across multiple sectors in Europe and the Middle East.
