Businesses’ and consumers’ annual global spending related to the metaverse could reach $5 trillion by 2030, according to a new report from consulting firm McKinsey & Co.
E-commerce in the metaverse will comprise some $2 trillion to $2.6 trillion of the total, while virtual advertising endeavors will make up another $144 billion to $206 billion, McKinsey said.
By comparison, spending around artificial intelligence totaled $93 billion last year, McKinsey said.
McKinsey released its new estimates for the metaverse in a study on the subject that also included the results of a survey of 3,104 consumers in 11 countries and a poll of C-level executives at 448 companies in 15 industries and 10 countries.
Some notions of the metaverse envision not only immersive digital platforms where visitors can interact, shop and play but interoperability between those worlds, meaning consumers can bring their avatars more or less intact from one platform to another.
For the purposes of its study, however, McKinsey defined the metaverse as primarily online platforms and experiences that don’t solely occur in virtual reality or require interoperability between virtual worlds.
The metaverse will encompass five types of daily activities, McKinsey’s report predicts: gaming, socializing, fitness, commerce and remote learning. “People are signaling that connection is probably their number one interest,” said Lareina Yee, senior partner at McKinsey.
Seventy-nine percent of respondents said they have already made a purchase in the metaverse as it exists today, with 47% of those people saying they had made in-game purchases, 37% reporting buying virtual cosmetic items and 33% saying they purchased real-world items that were offered through virtual platforms.
Brands’ experiments in virtual worlds so far offer signals about how marketing and advertising to consumers in the metaverse might look down the road, McKinsey researchers said.
“There is a need for very different marketing skills, which are much closer to videogames and movies, TV series and so on,” said Eric Hazan, senior partner at McKinsey.
Chipotle Mexican Grill Inc. has run two metaverse campaigns in collaboration with Roblox, the online gaming platform popular with children, including a 2021 Halloween-themed project called Boorito in which users who visited a virtual store received a code for a free real-world burrito, and an April event that let consumers roll virtual burritos to earn in-game currency that could also be traded for real food.
Chipotle Chief Marketing Officer Chris Brandt said the potential benefits of exploring the metaverse outweigh the risks.
“The metaverse is confusing. It gets a lot of publicity, but there aren’t a lot of people there,” Mr. Brandt said. “But many of our consumers have kids on Roblox. Hey, we’re taking a risk. Let’s not jump in and spend $5 million on this burrito [game]; let’s spend $100,000 and see what happens.”
The two games attracted six million unique users, many of whom also signed up for Chipotle’s rewards program, and “Boorito” daily sales totals surpassed those associated with past years’ Halloween campaigns in the physical world, he said.
Chipotle has been encouraged enough to begin allocating a small portion of its marketing budget to the metaverse, Mr. Brandt said, noting that he expects a larger commitment in the years to come.
Ninety-five percent of executives in McKinsey’s study said they believe the metaverse will have a positive impact on their respective industries in five to 10 years, and 25% said they expect it to drive 15% of their organization’s total margin growth in five years.
Authentic Brands Group LLC’S Forever 21 has leaned into the idea of “twinning,” a concept that entails people wearing the same clothes as their digital avatars. Forever 21 sold a black beanie in its store after it became popular on Roblox, for example, the company said.
“The metaverse is all about self-expression, so being able to wear identical outfits in the physical and virtual worlds is a trend that we believe will continue to grow,” said Jacob Hawkins, chief omni, marketing and commerce officer at Forever 21.
Some executives remain skeptical, however, with 31% uncertain about the return on investment of metaverse experiences, according to McKinsey.
Brands should temper expectations and investments in the metaverse, as it will take time before mass consumer adoption happens, said Mike Proulx, vice president and research director at Forrester Research Inc.
“The linchpin in this entire metaverse calculus has to be about convincing everyday people how the metaverse will complement their daily lives,” he added. “And until that happens, the user base of immersive media will continue to be niche.”
Write to Ann-Marie Alcántara at [email protected]
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