The metaverse is having its moment internationally, accelerated by COVID-19’s impact on digitalbased economies and disruptions to offline business models. The rise of blockchain, digital assets, and Non-fungible Tokens (NFTs) further fuels the demand for the metaverse. Defined as a virtual-reality space in which users can interact, the metaverse is evolving into an increasingly vast and rich ecosystem that comprises metaverse gateways, platforms, and infrastructures, as well as a variety of service providers to enhance the customers experience with identity, social, gaming, and economic services.

As we enter 2023 and beyond, here are our reflections on the impact of the metaverse in the real world in the next five years for retail and consumer goods.

Retail and Consumer Brands

In the era of digital consumption, brands continue to evolve their approach to establishing direct communication channels with consumers. From the early days of building a website, to embracing e-commerce, opening social media accounts, and even live broadcasting, the metaverse now offers a new concept for brands to experiment with.

The prevalence and growing importance of virtual characters or avatars have in recent times presents various business opportunities in the retail sector. Many consumers now expect a combination of instore and digital experiences, and the metaverse offers the ability to engage with brands and products using a personalized avatar. Whether it’s trying out clothes, daily necessities, test-driving vehicles, or just elevating the browsing experience in a virtual store, the possibilities are endless.

The well-known simulation game “The Sims 4” already gives us an insight into the metaverse. Consumer brands are actively collaborating with game developers to embed their products in all aspects of the game. Since its launch in 2014, consumer brands have launched item expansion packs for gamers to interact with the brands in the virtual world to raise brand awareness and cultivate brand love.

Beyond marketing products, brands have also organized or participated in interactive activities with consumers. The metaverse has become the new playground especially for luxury fashion brands, with some launching their new collection in the virtual world, and others partnering up with developers to create their own bespoke game.

In the near future, we anticipate more brands stepping in to break the boundaries between virtual and reality to create more innovative, meaningful interactions with consumers.