This article is part of a VB special issue. Read the full series here: The CIO agenda: The 2023 roadmap for IT leaders.
As the hype around the coming metaverse continues, CIOs find themselves tasked with understanding the reality of the technology and its business potential.
Not long ago, many CIOs viewed it as a futuristic, far-off idea without practical enterprise application. But as the technology advances, and use cases begin to appear, the metaverse has fitfully begun to take shape.
New, fully immersive ways of collaborating and communicating digitally are already impacting business, giving enterprises that embrace it a competitive edge.
Traditional, ecommerce, and multichannel retailers are especially likely to bring metaverse concepts into their strategic retail market planning. These retailers are honing their customers’ brand experiences, and are gaining heightened awareness of the metaverse’s evolution.
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Take the example of Lowe’s, which is providing virtual tours of their stores and allowing customers to use metaverse assets — including free downloads of hundreds of digitized 3D products, such as patio furniture and rugs — to visualize building projects. These virtual experiences are based on real-world locations and products, giving customers a unique and immersive shopping experience.
Similarly, fashion brands are now creating digital clothing collections, offering their customers a new way to shop. With such implementations in the metaverse, brands can test new products and processes in a virtual setting, which can significantly reduce the need for expensive physical prototypes and testing.
What’s clear is that the metaverse is not just a place for gaming and entertainment, as some skeptics would argue. It has the potential to revolutionize industries such as education, healthcare and retail. Trainers can connect with and instruct line-level employees by communicating with them directly via video through augmented reality-enhanced glasses.
Metaverse technology has the potential to create new revenue streams. Gartner predicts that by 2027, more than 40% of large organizations worldwide will be using a combination of Web3, spatial computing and digital twins in metaverse-based projects aimed at increasing revenue. For its part, McKinsey has estimated metaverse-oriented value creation in ecommerce alone could represent $2.6 trillion by 2030.
CIOs can now use the metaverse to facilitate novel forms of interactions, business models and ways to monetize the physical world, reaching a potentially massive audience. This includes use cases such as the capability for automobile dealerships to maintain a limited inventory of specific vehicles while utilizing spatial computing to digitally alter their interior and exterior features in real time. Importantly, companies are now bundling metaverse services into the products such as metaverse-oriented simulations and training, which provides increased value to customers.
Additionally, digital assets can be utilized in various metaverse settings, such as leveraging NFTs that augment physical products, creating enhanced virtual experiences on platforms, and enabling new forms of loyalty marketing.
Although progress has been halting, some viewers see virtual worlds within the metaverse will eventually evolve into virtual parcels of land that can be bought, sold and developed, creating new opportunities for businesses to generate revenue through property development and management, enabled through Web3-based models.
Another implication of the metaverse for businesses is the potential for increased efficiency and cost savings. The metaverse allows for remote collaboration and communication, reducing the need for travel and in-person meetings, and it’s changing how businesses interact with their customers. It allows for more immersive and personal interactions, leading to stronger connections between businesses and their end users.
While metaverse technology is new to many businesses, its antecedents have been pursued in industrial and manufacturing settings for many years. There, product-design simulation and digital-twin implementation continues to gain adherents. Often described as part of a new industrial metaverse, this space features advanced software and hardware designed to simulate real-world industrial environments. This allows companies to innovate on a spectrum of capabilities that ranges from virtual meetings and conferences to employee training and equipment testing.
Thought-leader Nathan Robinson, CEO of VR workspace training company Gemba, said customers such as Kohler, Caterpillar, Pfizer, Coca-Cola European Partners and Johnson & Johnson have identified that training expectations of new hires and existing talent have shifted in a way that favors a virtual-reality imbued, metaverse-oriented path.
“There is much empirical and anecdotal evidence to show that we are in a deep crisis of progress and productivity in the workforce,” Robinson told VentureBeat. “That is where the metaverse can have a profound impact.”
All work can be made more meaningful and fulfilling through better learning experiences, he said, as he predicted a future where factory-based training is elevated to include simulated and gamified VR experiences.
“Execs have a better way to upskill large and distributed workforces while appealing to younger generations coming through,” he added. “And the metaverse is hybrid, sustainable, accessible and engaging by design — hitting all the trends important to a younger future workforce and customers — and the earliest version is here right now.”
Robinson cautions that, when developing their brand’s metaverse strategy, CIOs should also keep in mind that the technology is still in its early stages and not yet ready to support a fully immersive and shared space. Therefore, it’s essential to take a measured approach, focusing on innovation rather than trying to find a “killer app.”
It’s important to be careful because it’s too early to determine which investments are viable for business in the long term.
“The intelligent approach is to invest in meaningful pilots to deliver transformative results — ensuring that you define what success looks like, set the right metrics, and create a controlled rollout plan. Then, testing and iterating until [you’re] confident of the benefits,” said Robinson.
In 2023, Robinson expects that there will be extensive adoption among businesses that are testing, learning and working out how to get the most out of what’s being described as extended reality (XR) technologies.
Likewise, Dijam Panigrahi, cofounder of metaverse enterprise solutions company GridRaster, believes that the metaverse will be pivotal in upskilling and reskilling workforces by providing opportunities to train in an immersive environment simulating various real-world scenarios.
“Some of the current industrial use cases include rapid prototyping with multi-user collaboration, employee/operator training and remote expert access. By applying data analytics, those insights can be further implemented in the physical world,” Panigrahi told VentureBeat.
CIOs should pursue a metaverse strategy anchored to the business outcomes that brands aim to achieve, he said. That is essential for brands to be able to continuously monitor and assess their metaverse strategy throughout its implementation, and to make necessary adjustments as required. He cites Boeing, BMW and Hitachi as industry leaders that see the metaverse as central to their digital transformation journey.