What Exactly Is the Metaverse?
No, it’s not an expansion of a superhero universe… The metaverse was created through Web3 technology, an evolutional improvement of the Web2, the technology driving the internet as we know it. Web3 tech indoctrinates blockchain tech, decentralization, and token-based economics into the foundation of the internet set by Web2. Outside of giving users the ability to travel to space, swim with sharks, and travel the world, the metaverse is a relatively untapped revenue generator.
Essentially, the metaverse is a blockchain-based virtual reality platform where one can access virtual worlds that contain digital assets and continue to exist in perpetuity, colloquially known years ago as the “cyberspace.” An easier way to grasp the concept, the metaverse is “an open world where users can roam, build, talk, and interact with one another as well as structures within it”.
The “metaverse” is not one sole platform – being “in the metaverse” solely means you are within one of the hundreds of “created” platforms such as Decentraland, who has close to 575,000 active members and averages 50,000 and growing daily users.
Can You Make Money in the Metaverse?
Interestingly enough, there have been hundreds of companies that have thrown out projections for what they believe the metaverse will be worth by 2030. The consensus is that it will be around an $800 – $1,500-billion-dollar industry. Some like Citi have made more aggressive and optimistic statements, projecting the Metaverse market could be worth anywhere from $8T to $12T by 2030. It is widely speculated that in the eight years of progress made from now until 2030 will represent over 100 years of innovation.
For auto dealers, the real revenue driving aspect here is in the form of advertising, your personal brand, and your marketing outreach. Brian Kramer (who at that point was the General Manager for Germain Toyota of Naples, FL) conducted the sale of the metaverse’s first vehicle, Sandbox, or one that your kids may be familiar with, Roblox. The goal of these different platforms is to expose you to a different form of reality in which you can immerse yourself and go wherever you want to go, be whoever you want to be, and bridge the thin line of reality by bringing digital assets to perform in-platform actions that provide real-world benefits.
What Have Other OEM’s (Original Equipment Manufacturers) Done?
- Hyundai – Arguably the largest “pioneer” in the virtual reality and metaverse investments through their new “Metamobility” concept, where they plan to “go beyond physical movements through robotics and the metaverse to affect change in the real world” through large investments in AI and the acquisition of famed robotics company, Boston Dynamics in 2020. The company has also launched “Hyundai Mobility Adventure” to join the 43.2 million users on Roblox. Users who join this space can learn more about Hyundai’s future mobility plans, and even test drive vehicles.
- Mercedes-Benz – Mercedes has partnered with the “Aura Blockchain Consortium” along with other luxury brands such as, Prada, Louis Vuitton, and Cartier to develop blockchain technology and pioneer and promote luxury in a digital world.
- Toyota – Created a virtual workspace for employees so avatars can engage in corporate events and company meetings.
- Nissan – Nissan took advantage of “Pre-release marketing” The yet to be released Nissan Sakura, can be test driven on the “Nissan Sakura Driving Island” within the metaverse. Other OEM’s can use this technology to have users interact with their futuristic concept vehicles.
- Jaguar Land Rover – Gives customers a “360-degree experience” of their Velar vehicle, where users have the option to click on specific “hotspots” and learn more about each particular feature of the vehicle.
- BMW – Through their “BMW iVisualiser” platform, customers can configure vehicles through interacting with a full-size model. This platform also gives access to see smaller features, like turning on the radio, activating turn signals and turning on lights.
- Acura – Launched “Acura of Decentraland” and created a virtual showroom to display their new 2023 Acura Integra. Acura is focused on brand awareness and made strategic decisions to buy digital land within Decentraland’s “fashion district” for their showroom.
Where Do Auto Dealerships Tie In?
In 2017, the Washington Post reported that “53% of U.S. consumers would be either extremely likely or very likely to buy a car entirely online.” Of course, during the COVID-19 pandemic, auto dealers saw a huge influx in this. Fast forward to 2022, Progressive Car Insurance produced a recent article discussing online car buying trends. Post pandemic, car buyers are still choosing to shop online vs at the dealership. “For in-person buyers, the ability to test drive was ranked the number one reason for choosing to shop at a dealership by 34% of respondents. For 18%, having shopped at a dealership before — “it’s what I’m used to” — was the number one reason they chose shopping in person. Another top reason, ranked number one by 13%, was the ability to compare vehicle options easily. The automotive industry is also very aware of the shift to online shopping — industry executives expect most sales will happen online by 2030. As dealerships and manufacturers increase online options and car-buying websites improve their processes, consumers can expect a more seamless digital experience with more options — not less” (Progressive, 2022). Auto dealers now is your time to strike while the iron is hot and incorporate the metaverse into your dealership to increase numbers online and the satisfaction of your online customers while maintaining your in-person customer service support. Some other benefits for incorporating the metaverse:
- Dealers can use VR Technology to seamlessly communicate and transact with customers that feel more comfortable buying vehicles from the comfort of their homes.
- Cross-Country Consumer Reach – Which elevates your brand’s footprint as the metaverse has no real geographic location. Dealers would need to implement means of cross-country vehicle transportation and can facilitate delivery of vehicles across the country, creating competition for Lithia’s newest program, Driveway.
- Virtual Showrooms – Where customers can virtually walk through a dealerships’ lot and see the range of vehicles, they have available, with an additional option to get inside and go for a “hands-off” test drive.
- In-store VR/AR – Want to test drive a brand-new Mercedes in the middle of Manhattan? No need to fear about not getting the full, open-road experience. VR technology allows for “Test-Drive Simulators” complete with Haptic Feedback, to get a great understanding of how well the car drives!
- Education – VR/AR Technology can help visually educate car owners on proper maintenance, while some companies have experimented with VR/AR technicians performing virtual animations on changing tires, topping off fluids, and more.
Understand that the metaverse is not a means of replacement for your current dealership, it is a means of marketing and brand extension of your store, or a digital twin, for a different audience of car buyers, evaluate whether you are comfortable with marketing yourself towards a younger crowd like Generation Z.
It seems it will be years before the dealerships in the metaverse becomes a mainstream thing – continuous learning and baby steps through integration of some AR systems first might drive consumers to your store as you would be considered an “early pioneer” at this point.
Withum, the Metaverse, and How We Can Help!
With Withum’s dealership technology advisors, combined with our innovative digital solutions and emerging technology teams can help you stay ahead of the curve and advise you and your dealership on safeguards, ever-expanding regulations, and a general roadmap of how to prep your dealership for the inevitable future of automotive retail. Welcome to the future, Auto Dealers, Withum is here to help and guide you every step of the way!
Author: Joseph Polanco | [email protected]
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For more information on this topic, please contact a member of Withum’s Dealership Services Team.
