The future Metaverse and its disruptive impact
The past years there has been an increased importance of technological adoption, forcing companies to jump on the wagon and to develop and implement new technologies. Many of these technologies may disrupt our current way of working, further increasing the interest in the Metaverse. This Metaverse will allow to transform many sectors, of which also the logistics industry.
A new technology can emerge and influence the way we interact with the digital world. Remember when the first smartphones were introduced without a keyboard? Many wondered if these devices would be able to conquer the market, but the contrary has been proven. These smartphones introduced new business models in various areas, among others transportation, food delivery, social interaction, etc.
Technologies that change our way of interacting with the digital world are at the base of what we call the Metaverse. This Metaverse does not refer to a single technology or device, but the convergence of several separate technologies that can create an immersive, three-dimensional experience in which users interact with each other and their surroundings.
Six key characteristics
There are 6 key characteristics of a Metaverse:
- Realistic immersive experience provides precision of the senses, objects and environment and have driven Metaverse excitement.
- Complete structure of the real world
- Metaverse residents can create content and applications in their own virtual worlds in the User-Generated-Content (UGC)
- Metaverse could surpass the economic value of the real world since the it has less scarcity, creating a huge potential economic value.
- By paralleling the real world, new regulations apply
- There will be a lot of uncertainty regarding governance structures, who has the final say in the virtual world and who owns its economic benefits.
Even though there is not yet a full realization (and adoption) of the Metaverse, there are already some examples of its elements that exist today: immersive virtual worlds with avatars that interact with one another, digitally native trade and economic activity or digital overlays on the physical world that provide data or commentary on what the user sees. To realize the Metaverse, many technologies still need to be further developed to reach its full potential on a mass scale. Some of these key enabling technologies are: virtual, augmented and mixed reality devices, computing power (e.g. Cloud, edge), networks / connectivity (including 5G / 6G wireless), AI and machine learning, volumetric scanning and 3D modelling (allowing photo-realistic 3D rendering), blockchain / cryptocurrency / NFTs (which enable digital property and payments) and Internet of Things.
The evolution of the Metaverse will have the potential to influence many areas in the near future, including logistics. An example of such a Metaverse in the world of logistics is a digital twin. Digital twins enable companies to mimic logistics processes within the Metaverse and detect improvements and optimizations, for example lower-cost predictive planning and maintenance. On top, the Metaverse could not only help to design more detailed process simulations but also improve training in warehouses and manufacturing facilities by the creation of immersive virtual worlds.
Logistics is likely one of the industries that will benefit the most from the Metaverse by introducing new ways of managing and coordinating the movement of goods and resources. The Metaverse allows to optimize processes, eliminate cost overruns and connect various supply chain elements. The Metaverse is evolving at a rapid pace and it will soon become an indispensable aspect in the future logistics industry.
The Metaverse is still in its early days and a lot of development is still needed for the Metaverse to break through. As the Metaverse matures, there will be several bottlenecks that may delay its progress, of which the most prominent are:
- Portability of access to the virtual world: cumbersome equipment is still needed to enter and interact in the Metaverse. Innovative thinking is necessary to overcome the technical constraints and access the virtual world without using this equipment.
- Rules of governance in the virtual world: to create social, economic, cultural, tax, legal and governance rules in the virtual world there is a need for long term research, exploration and testing. It is of utmost importance that the rules in the virtual world to not intensify contradictions and threaten the real world.
- Industrial Metaverse applications: today, it is especially the consumer side that makes use of the Metaverse regarding entertainment, social networking games and NFT art. Nevertheless, the Metaverse also has application prospects for other areas such as manufacturing or logistics when looking at real-time sustainability, digital twins and integrated reality.
- Information security and privacy: there will be an exponential increase in the data hosted by the Metaverse highlighting the importance of balancing information security with the development of the Metaverse.
- Energy supply: the current energy supply mechanisms (e.g. 5G networks, IDC centers, high performance computing and AI) will not be sufficient to provide the infrastructure that will be needed for the complex mechanisms of the Metaverse. Considering the trend towards global carbon neutrality, the infrastructure will need to be built in a green way.
If and when the Metaverse will reach its full potential, will depend on customer response as well as the answer on several challenges; standardization (standards, protocols, platform interoperability), user interface (intuitive use, seamless integration), market fragmentation and governance (regulations, security) to name a few.
Taking actions already today
Even though the future of the Metaverse appears to be uncertain, there are already some actions executives can take today:
- Don’t underestimate the potential: a flexible strategy needs to be put together that can adapt to changes in technology and customer preferences. For the consumer facing and enterprise functions a test-and-learn approach could be adopted, to allow for improvements after each iteration.
- Develop a long term vision: as it will likely take at least 5-10 years for a fully immersive Metaverse to emerge, a long term view should be taken on investments and KPIs around employee engagement in addition to ROI.
- Focus on demand and what motivates users: in order to be competitive in this market, the focus should lie on how to create captivating content and engaging experiences (e.g. exclusive partnerships, user generated content tools, robust data and insights collection).
- Commit to a “responsible Metaverse”: consumer and employee trust should be maintained by managing complexities and risks (e.g. privacy/security, accessibility and sustainable energy consumption).