The future is out of this world
Growing up, my favourite cartoon was The Jetsons. For context, it was the first prime-time show that the ABC network broadcast in colour. That’s how long ago it first aired. The Jetsons was an animated series about a family, living 100 years in the future in the year 2062.
The thing that made the show so compelling was its focus on ways that technology would likely change our daily lives. Very many of the machines and tech-devices depicted on the show have already become commonplace: video calling, iPad tablets, smart watches, automatic sliding doors, moving sidewalks and drones. Other predictions like holograms, 3D printed food, robot dogs, jetpacks and flying cars have been realized, but have yet to become adopted widely.
Today’s sci-fi imaginings are grounded in technologies that either already exist, or the synthesis/extension of those that are foreseeable.
Typically, organizations are intentionally late to the party when it comes to the news. There’s a reluctance to avoid investing in something that may not enjoy enduring popularity. The instinct is to rely on familiar and known processes—belief being that the safer strategy is to introduce incremental changes driven by articulated customer needs. The development company M3Design refers to this as the “Voice of the Customer'' (VOC) fallacy. In the real world, game-changing opportunities are generally not revealed to you by asking your customers what they want. According to M3Design, your customers “may not realize they have a problem, let alone (be able to) articulate a solution. Your customers don’t know what they don’t know.”
Habits start young
Your youngest customers are an important part of the present. They’re the ones who visit c-stores more than once-a-week. Gen Z also embodies the future. Your success down the road will hinge on two endeavours:
- Successfully keeping younger customers brand/location loyal as they age.
- Engaging with generation Alpha, children born in 2010 and later.
What do these two cohorts have in common? They’re both digital natives. They’ve only ever known a world of connectivity. Gen Alpha grew up with iPads like I grew up with rotary phones. They respond to technology intuitively. They may not know how to mail a letter, but being connected is something they get instinctually. Georgia Stafford, research analyst at Mintel, says that gen Z has “always known a different life online where (they’re) very immersed in the digital (life), and maybe less so in real life.”
What is the metaverse?
Why is it a significant insight that, for many younger consumers, life online is more real than their day-to-day interactions offline? It’s the lynchpin behind the metaverse. Getting a clear definition for this term is tricky. It tends to mean different things to different people—like the early understanding of the World Wide Web.
Perhaps the easiest way to think of it is through the example of online gaming. Originally, games were played alone, interacting with videogame software via a gaming console. Eventually, most games started to offer an “online” version to bring gamers from around the world into an interactive space to game, text and communicate with each other, adding a community dimension into the experience. More recently, updated and original games are becoming available exclusively on the metaverse. There are millions of user interactions and crypto transactions taking place on these games. Epic Games, the creator of the massively popular Fortnite game, has “evolved into a digital events place where users can attend dance parties and virtual music concerts.”
In the real world, game-changing opportunities are generally not revealed to you by asking your customers what they want
This change is not a small tweak. Transitioning gaming to the metaverse is like offering techno-crack to a group already addicted to videogames. According to McKinsey & Company, the essence of the metaverse is the use of “virtual reality, augmented reality, and other advanced internet and semiconductor technology to allow people to have lifelike personal and business experiences online.” The implications are potentially staggering. Think of what smartphones did to personal communications devices. The metaverse could disrupt in ways we can’t yet imagine—a process McKinsey refers to as the “evolution of today’s internet.” It could converge multiple digital platforms, including cryptocurrency and artificial intelligence, to immerse consumers. This could make moot conventional wisdom re: ‘owning the customer’ or ‘location is key’. The metaverse will own the space between the ears of your clients. By extension, the enterprise metaverse is already being developed in parallel to mine commercial opportunities by layering consumer product/service preferences into metaverse experiences.
Breaking ground
In the early days of Netflix, in the year 2000 when the company was still mailing DVDs out to subscribers, the founders approached Blockbuster Video with a proposal to sell the business to them for a price of $50M. Blockbuster execs balked, and laughed at the valuation. Blockbuster is now a punchline, and the poster child for businesses not anticipating the ground shifting under their feet.
The first step when considering radical changes to your business model is to be open to seeing things through a different lens. As M3Design notes, “It is critical to assess the opportunities objectively so your teams can transition from a ‘we’re not in that business / we’ve never done that before’ mindset to one focused on providing a product offering that more closely aligns with evolving customer needs.”
There are few guarantees when it comes to the metaverse. The space will surely produce winners and losers. Its existence serves as a reminder that, more and more, boundaries that have defined ways of doing business are fluid.
- WHO'S GETTING ON BOARD?
According to Business Insider magazine, several food manufacturers and foodservice organizations are looking to capitalize on consumers not wanting to have to leave the metaverse to purchase food. C-stores are also getting in on the action.
- McDonald’s has “filed 10 trademark applications to the US Patent and Trademark Office (in 2022) covering both McDonald's and McCafe…(in order to) protect the idea of a McDonald's restaurant in the metaverse that can sell both virtual and real-world food.”
- In 2022, Wawa, a U.S. c-chain with nearly 1,000 locations, made its first foray into the digital world with Hoagiefest NFT Sweepstakes. The promotion featured digital prizes, like one-of-a-kind digital artwork, digital collectables and special Hoagiefest swag
- Coca-Cola launched Coca-Cola Zero Sugar Byte (a limited-edition sparkling beverage) within the Fortnite game, marking the first-ever Coca-Cola flavour “born in the metaverse.” The LTO gave consumers a chance to try “what pixels might taste like.”
- 7-Eleven opened a virtual c-store in the metaverse by partnering with Korean mobile game developer HAEGIN to incorporate a 7-Eleven to the social networking-based IP Play Together: “(Virtual) players will be able to see and consume many things that are also offered in store… (and can even) try out 7-Eleven Korea’s many services, such as the interactive floor, kiosk, and parcel delivery service.”
- CU (BGF Retail) is the largest c-store operator in South Korea, with 15,000 locations. Since 2021, CU has invested in building out a virtual ecosystem to reach customers in the metaverse. Virtual CU stores and a supporting infrastructure have been set up to facilitate the purchase of items online and the delivery of physical ones offline. Proprietary CU NFTs for sale on the metaverse are in development.
- MORE THAN A FAD
Revenue projections: McKinsey estimates that the metaverse may generate up to $5 trillion by 2030 across consumer and enterprise use cases.
Attracting investment: In 2020, metaverse-related companies reportedly raised nearly $5 billion from capital markets. In 2021 it more than doubled to $10 billion and in 2022, investment soared, with more than $120 billion flowing into the metaverse.
Moore’s law: A rapid, large-scale expansion of a virtual world is only possible if most people have the computer capacity to support it. For the last 50 years, computer processor speed and memory size have approximately doubled every year or two, even as costs have decreased, making computers faster and cheaper.
Gaming and online commerce are entrenched: More than 80% of Canadian consumers currently make online purchases and that number is even higher for younger consumers.
Gen Z coming of age: The youngest members of this cohort will soon be age-of-majority. Oldest gen Zers are already in their mid-20s. Gen Z is excited by the prospect of transacting in virtual worlds and in the next five years, this group will further leverage their purchasing power to influence the market.
(Source: McKinsey & Company, What is the Metaverse?)
