There’s been a lot of buzz about the metaverse, along with related innovations like cryptocurrency, non-fungible tokens (NFTs) and Web3. Business leaders are trying to make sense of it all — wondering what kind of strategy they need and how risk and trust change in a virtual world.
How to focus on building out metaverse elements you can benefit from immediately.
GettyWhile the metaverse still confuses many consumers, some signs of opportunity for businesses are emerging. In fact, 66% of executives recently surveyed in PwC’s inaugural US Metaverse Survey say their companies are actively engaged with the metaverse strategy. New trends for the metaverse’s economy, governance, user experience and more are top of mind and may require rethinking how your company builds and fosters trust.
What is the metaverse, really?
It’s not really new; the metaverse vision has been evolving for some time. We see it as the ultimate convergence of a number of trends and technologies that have been taking shape, such as virtual reality (VR), digital identity and digital assets adoption.
With the metaverse you could, for example, put on a VR headset and visit a factory on the other side of the world. You could see and touch its machines, shake hands with the local supervisor, and inspect its operations without leaving your desk.
How relevant is it to my business?
It is important to consider the outcome you want to achieve when developing your metaverse strategy. Determine if your objective is to: build for brand and initially leverage it as only a marketing and advertising channel,) build to engage with your target audience in new and relevant ways, create new offerings to generate revenue by selling digital or physical products and services, or leverage it for process optimization and as a workforce transformation solution that leverages immersive environments for onboarding, training and collaboration.
What risks does it bring?
In PwC’s survey of over 5,000 US consumers and 1,000 US business leaders, three risks stood out: cybersecurity, privacy and technology costs/restraints. The metaverse and its existing building blocks offer new challenges for cybersecurity, privacy, regulatory compliance, brand reputation and anti-fraud efforts that must be addressed. For example, companies must consider security at the services level, so that no matter where your digital asset goes, security is maintained. Long-term expectations and worries are high — highlighting the need to build a trusted metaverse.
New technologies can help. Blockchain combined with artificial intelligence, for example, can in some cases automate the authentication of identity, assets, transactions and contracts — helping establish trust in ongoing metaverse activities. Consider independent teams as well, both internal and external, to audit both smart contracts’ code and the underlying hardware and software infrastructure.
Four actions that can help your business today
Focus on building out metaverse elements within your business now to benefit from immediately, while positioning yourself to capitalize on the full potential of the metaverse down the road. Here are four ways to get started:
1. Build metaverse foundations: Set people and tech priorities
Companies are prioritizing metaverse hiring, customer research and upskilling as much or even more than their investments in metaverse-related technology. That’s wise, because tech is primarily an enabler. You need the right people, processes and skills to wring out the most value.
Consumer uptake for many metaverse-related technologies is on the rise. Twelve percent have bought a VR headset in the last two years, and VR is just one way to enter the metaverse. Apps can also enable metaverse experiences on a portable device. The speedy advance of VR, Web3, blockchain, crypto, NFTs and other technologies that enhance metaverse activities point to potential for the metaverse to grow and scale quickly — so your employees and processes must be ready.
PwC recommends:
- Get payback today as you look to the future. As you focus on the elements of the metaverse that can provide immediate benefits — for example, brand building, e-commerce, data gathering or enhancing the work environment — make sure you’re also building capabilities you can use in a fully immersive metaverse that’s expected to cross a range of interoperable platforms.
- Invest in tech with multiple uses. The metaverse requires some specialized technologies, but it doesn’t need every single one available, and many metaverse technologies have broader applications. Cryptocurrencies, for example, are used outside the metaverse — and some metaverse transactions require only a credit card. The right organizational approach to metaverse technologies can enable flexibility and offer both near- and long-term benefits.
- Design unique, expandable metaverse experiences. You can experiment and learn more about what stakeholders want if you use the metaverse as an additional dimension of your corporate and brand expression and a chance to rethink ways of working. Think of it as the ultimate way to engage customers and strengthen your brand and workforce experience by taking full advantage of a new, immersive digital world. Make sure there is baseline consistency among your channels and digital presences to reinforce your brand voice and maintain differentiation.
2. Drive metaverse outcomes: Meet business needs and consumer desires
Most consumers already express interest in the experiences and services the metaverse could give them. Many are also willing to look to the metaverse to discover new brands and buy or sell physical products. But most businesses aren’t yet planning to provide what consumers most want — for example, the excitement of virtual travel or the convenience of interacting in the metaverse with health providers, customer service agents and familiar brands. It’s understandable that business leaders tend to be more focused on internal activities such as training, collaboration and onboarding. But playing it too safe also carries risks. If your customers are excited about the metaverse, it may be time to start giving them what they want with some customer-facing proofs of concept.
PwC recommends:
- Stay on brand. When you’re entering the metaverse, the highest-return way to start is often to build on your existing brand presence. You may wish, for example, to enhance current marketing and loyalty programs with personalized metaverse storefronts, token-gated communities and immersive experiences, including education and discovery of your products, services or brands.
- Use metaverse data, but be mindful of security and privacy. Decentralization, 3D experiences and new solutions create troves of data. The right metaverse data strategy can help identify and anticipate customer desires and their preferred channels, so long as you address consumer privacy, security and control concerns.
- Be smart about pricing. New metaverse-specific pricing strategies can help increase revenue, whether it is from virtual goods and services, experiences or channels where consumers can buy physical goods and services. Craft your pricing so it creates revenue while encouraging customers to give your virtual offerings a try.
3. Address metaverse risks: Build and spread trust
Most consumers worry about the societal implications of the metaverse (such as online hate, discrimination, sexual predators) and think it’s mainly for younger people. Still, roughly half also say that it’s exciting and will accelerate the use of digital assets. Only two-fifths call it a fad and only one-third express skepticism that a true metaverse will be achieved. This cautiously optimistic vision may reflect experience with the internet, which advanced quickly, but often at a cost. For the metaverse, it stands to reason that companies that attain lasting success will get two things right: using the metaverse and its component technologies to create products, services and experiences that truly transform the brand-consumer relationship and acting early to inspire trust.
PwC recommends:
- Embed trust from the start. Rather than first building an application, then identifying and mitigating risks, design your approach to metaverse data, transactions, experiences and more with trust built in — that is, by addressing data security and privacy risks head-on. This should help drive long-term cost efficiencies in addition to mitigating risks upfront.
- Categorize risks. Many new metaverse risks are common to most companies, but you should create your own risk taxonomy. Assess your metaverse risk-mitigation needs with a focus on these key areas: user identification and authentication, security and data privacy, commercialization, user experience, community guidelines and monitoring, governance, controls, and reporting.
- Give key players a seat at the table. As with any digital transformation, tax, security, privacy, risk and compliance specialists should be involved with metaverse initiatives from the outset. Their early participation is critical since it may not be clear how existing and potential rules fit into the multi-component metaverse. To take just one example, digital assets, common in metaverse platforms, also implicate novel characterization, indirect tax, transfer pricing and reporting considerations that your tax experts should address early, both to decrease risks and potentially find new value.
4. Define your metaverse strategy: Get ready for a new digital world
Business leaders are leaning into the metaverse. More than half say it will either be the next incarnation of the internet or revolutionize businesses. As we see it, this revolution will be more of an evolution, taking place over several years with different components maturing on different timelines. That’s why strategies should contain both a long-term vision, with designs for the future Web3, and a practical path to invest in technologies, skills and use cases that can deliver specific business outcomes right away. As you gain experience with these building blocks, you can also figure out how best to anticipate your customers’ desires for when a fully immersive metaverse is established.
PwC recommends:
- Be relevant. Even though it’s wise to start by extending current activities into the metaverse, lasting success is more likely to come from offering brand-new products and experiences that can only exist in the metaverse and that truly change how people live their lives.
- Be useful. Consider developing products and services that offer lasting utility — ones that people, communities, or companies will turn to again and again for information, services, entertainment and convenience.
- Be purposeful. Customers are likely to trust you more if you can integrate a corporate purpose that reflects their values into your metaverse offerings. The metaverse could, for example, help reduce your carbon footprint (by making physical activities virtual) or help verify and present ESG data.
Taking your vision from plan to reality
Think big and, as your company builds out the metaverse building blocks that can generate benefits today, position yourself for the metaverse’s full potential tomorrow.
Similar to how the internet developed, there may be several cycles of speculation and disillusionment before disruption spreads and the true value appears. It will be important not to fall for hype and misallocate capital.
Learn more about PwC cloud transformation services and the companies we work with to help companies unlock the most value and reinvent themselves.
