How CPG Companies can Engage with Gen Z in the Metaverse

What is the metaverse?

What if everything you wanted to do on the internet and in the physical world could be done in the metaverse? From virtual showrooms, parties, digital museums to immersive experiences, and more. The metaverse is a place where you can socialise, learn, work, shop and play, enabling the integration of different technologies, virtual worlds, AR/VR/XR, Non-Fungible Tokens (NFTs), gaming, and blockchain (often referred to as Web3) into all aspects of our lives.

For brands, the metaverse represents a new way of engaging with consumers’ needs, that can be tapped into in different ways. It facilitates interactions where consumers are the owners and creators, rather than passive receivers or viewers. According to McKinsey, the top 5 activities consumers are excited about are socialising, entertainment, gaming, travel and shopping.

Roblox is the most popular metaverse platform, with more than 200 million active users and over $1 billion spent just on their in-game currency called Robux.

However, there is a huge gap between the potential of the metaverse and its reality: 94 percent of marketing decision-makers believe the metaverse represents a new way to reach their audiences, yet just 15 percent of consumers are actually using metaverse channels. Some even say the metaverse “has been a consistent supplier of notoriously cringe moments”.

Is it really important for brands to craft a marketing strategy that allows them to be active in the metaverse? And who are the current users? It seems like the most engaged generation is Gen Alpha, and the youngest Gen Zers: 51% of the metaverse user base is 13 or younger, and all the users aged 18 or less add up to a whopping 83.5% of the total metaverse userbase count. How well do brands understand this young audience? Looking at the Martha Stewart debut in the metaverse, it seems like marketers need help understanding how to use this new channel – how many young users would know who Martha Stewart is? Does this partnership tap into genuine interest for these users? Both consumers and brands are still figuring out how to navigate the metaverse. Needless to say, the integration of virtual and physical is the future, and brands will need to adapt to this new reality.

At TRFF, we have identified four key needs that the metaverse can tap into to engage users:

  1. Sense of belonging and community
  2. Mixing offline and virtual experiences
  3. Access and ownership
  4. Identity and self-expression

Let’s look together at how CPG brands are entering the metaverse, and what we can learn from them to build brand loyalty.

How can CPG brands effectively enter the metaverse?

1. Sense of belonging and community

Research by the creative agency Impero found out that 70% of Gen Z joined a community for a feeling of ‘belonging’, followed by ‘voice’ (66%). It is therefore important for brands to foster the sense of belonging that young generations are craving. These brands demonstrate how the metaverse can tap into this need in new cool ways:

Hellmann’s created an Animal Crossing island that allows players to make change in the real world by converting their virtual food waste into real food for those in need. The initiative is part of the brand’s mission to help people be more resourceful with food and waste less and responds to the Gen Z imperative for sustainability and purposeful brands.

Chobani partnered with Roblox to promote one of its products. They created the first Chobani’s VR game experience called The Chobani Oat milk Cosmic Race. By playing the game, users can accrue points that go toward a charity chart. Once Chobani’s point goal is reached, the company has promised to donate $75,000 to Hunger Free America.

Another great example of fostering a sense of belonging while helping people make a change is gmgn supply company, which is building a DAO (Decentralised Autonomous Organisation) of 100 community-based CPG brands. Here members will be able to participate in and vote on decisions for product selection, branding, pricing, product development, and more. In their manifesto they claim: “The largest Consumer Packaged Goods companies are no longer a fit for today’s evolved society.” Also, “A DAO promises a focus on community ownership, rather than just profit, on fairness and equality, rather than hierarchy, and provides a more socially-conscious and transparent structure with aligned incentives.”

2. Mixing offline and virtual Experiences

One key difference that makes the metaverse stand out for marketers used to operating in the physical world is the possibility of creating unique immersive virtual experiences, ones that have both the benefits of traditional brick-and-mortar and of the digital online experience. Virtual spaces make the brand come to life and allow it to connect with Gen Z in new ways. 74% of Americans now value experiences over products or things. Here are some examples of how CPG brands are crafting them:

Together with BeautySPHERE  – a standalone virtual world engaging consumers through simulated and gamified content – P&G lets users interact with articles, pop-ups, and experiences to learn more about products’ ingredients. It also includes an explanation of Head and Shoulders from Bill Nye.

Absolut.Land, is a collaboration that involves the 2022 Coachella festival, Absolut and Decentraland to create a three-story Absolut bottle where users could get branded clothing and wearables, browse through former Absolut advertisements and get rewards for sharing on social media.

Coca-Cola tapped into the realm of sound to create a truly immersive experience that merges the virtual and the real world: they released an NFT including a ‘Sound Visualizer,’ which replicated the unmistakable sounds of a Coke bottle opening and being poured over ice. The winning bidder would also receive a Smeg refrigerator fully stocked with Coca-Cola to share with friends.

Charlotte Tilbury lets you shop in their virtual store with your friends via video call: “Buy in Metaverse, Ship to Consumer.” Subway also lets you shop virtual food and beverages in the metaverse and receive delivery to your home. This is the next level ecommerce, where direct-to-consumer (DTC) arrives in the metaverse.

3. Access and Ownership

We are shifting away from ownership of physical consumer products (see the surge in subscription services), while adopting ownership in the digital sphere as a mean for exclusivity. NFTs are digital tokens that feed our crave for exclusivity and sense of belonging.

Brands like Clinique, Coca-Cola and Bud Light are launching their own NFTs, offering exclusive benefits to its users. Clinique lets you own unique pieces of their brand’s story, Coca-Cola teamed up with Decentraland and created a range of branded jackets for your avatar, and Bud Light gives you exclusive rights to vote on future branding and rewards.

4. Identity and Self-expression

Needless to say, we like to express ourselves in the digital realm, from crafting our feeds on Instagram and TikTok to customising our avatars in video games. 65% of Gen Z have spent money on virtual items within a game, and 55% Gen Z say that they find the internet a more creative space than anything they experience offline. So how can brands nurture the creative side of Gen Z and our need for expressing our unique identity?

Take Coca-Cola for example, as part of their Friendship Box supporting the Special Olympics purchasers of the NFTs received a “custom-designed Coca-Cola Bubble Jacket wearable, illuminated with effervescent fizz, purposely featuring a futuristic look with subtle nods to Coke’s nostalgic delivery uniforms”. The initiative fetched a total of $575,883.61.

Of course, the most successful initiatives tap into multiple needs, feeding our crave for exclusive experiences that allow us to express ourselves, while feeling part of a community of like-minded people.

Despite the potential for brand loyalty and exciting new consumer products in the metaverse, we at TRFF we cannot help but wonder if the metaverse is worth the hype or if it is already one of many other tech fails. Interactions with the metaverse generally require a virtual reality headset, which can cause motion sickness and are very bulky. Established gamers might be on board, but are more people willing to wear them for several hours to experience what the metaverse has to offer?

Moreover, it seems like the Meta’s immersive virtual world features are not living up to the hype:

Will the Metaverse be the future? Only time will tell. What is certain, is that we are living in an increasingly phygital world and marketers need to keep up. How?

  1. Look at what others are doing, and learn from their failures (remember Martha Stewart?)
  2. Experiment, experiment, experiment!

Whichever way you decide to do it, make sure you are crafting a brand strategy that allows you to top into those needs, offering unique products and experiences that are relevant and purposeful.

Beatrice Soncina Beatrice Soncina