Meta (formerly Facebook) has partnered with Israeli digital marketing company Yellowhead to establish the Meta Startup Hub. The company provides a metaverse (virtual reality space) platform and supports the human resources development and business development of companies in order to utilize the platform.
In the midst of these movements, Israeli companies are also developing their own solutions that utilize Metaverse technology. We spoke with ByondXR CEO and co-founder Noam Levavi about the reality of such technology development and commercialization.
Providing a customer experience for Generation Z and promoting “goodness” and “correctness”
What is the status of Metaverse technology development in Israel?
When it comes to high-tech technologies in Israel, cyber security and fintech are well known worldwide. For that reason, you may have the impression that technological development related to augmented reality (AR) and virtual reality (VR) is not so relevant. However, in reality, AR and VR are extensively used in elemental technologies in fields such as computer vision, artificial intelligence (AI), and machine learning. Therefore, it is not surprising that Israel, which has an abundant accumulation of such technological development, will come out with companies with AR and VR technologies like ours. In addition to our company, multiple companies are developing technologies in different fields.
What is the impact of Metaverse technology on the market?
In recent years, especially in the e-commerce and game markets, young people called Generation Z have begun to attract attention as promising customers in the future. This is true globally, especially in the Middle East market, where the younger generation is growing in population. Israel is a prime example.
Generation Z consumers are said to value a rich “customer experience” when making purchases. In addition to the conventional factors such as the products themselves and prices, the products and services such as “environmental load and consideration for human rights” in the production and distribution process are “good” and “correct” in light of their own value standards. It is said that there is a tendency to add whether or not it is a condition for purchasing decisions.
Therefore, in e-commerce, it is necessary to provide a rich customer experience. In addition to the conventional display on a two-dimensional (planar) website, it is required to utilize the 3D metaverse technology that we develop. It would also be useful to make efforts to reduce the environmental burden in the production and distribution process and appeal it to customers. In recent years, these related technologies have made great progress. Therefore, it is already in commercial use, not just in the demonstration stage.
What are the specific examples of commercial use?
Our e-commerce solutions that leverage Metaverse technology are already being used on well-known apparel brand sites. For example, multiple cosmetics brands such as Lancome and L’Oreal, and Armani.
At Lancome, it is used on national sites in 22 countries, including Japan. It is a specification that the online shop is developed on the 3D screen.
However, the screen and suggested content can be completely customized according to the individual taste of the customer. Specifically, it provides a screen configuration that is targeted and customized for each user. In addition, a simple game function of about 10 to 30 seconds is added, and an incentive is given so that discount tickets and samples can be obtained. By adding these functions, we have succeeded in increasing the engagement (connection) with customers by 50%, especially in the Japanese market, compared to other countries’ markets. In other words, the percentage of customers who play repeated games was 50% higher than in other countries’ markets. The incentive to participate in the game is set only for the first time, even though the benefits will disappear after the second time.
Cosmetics are said to be products with high transfer costs. In other words, it has the characteristic that it is difficult to easily move from a brand that you have started using to another brand. Therefore, it is necessary to have a mechanism to build a strong connection with the brand so that it can be used for a long time while utilizing the online shop. It can be said that it is effective for the customer group such as Generation Z, where online purchase is commonplace and the brand to be used is decided and used from now on. By the way, it was the actual stores that once played this role. Face-to-face sales by skilled sales staff were effective. However, with the new waves of Covid, the transition to an online shop has progressed.
How to build a successful online store? One answer is the use of 3D Metaverse solutions. Another example is sample confirmation work between apparel brands and suppliers. Our 3D Metaverse technology is also used for such work. In the past, samples of each part of clothing produced by suppliers were airlifted to the brand each time for confirmation. With this method, first of all, distribution costs are incurred. In addition, there are issues such as the need for greenhouse gas reduction efforts in the distribution process and the disposal of unnecessary sample fabrics. But with our solution, you only need to send a tiny 1-inch square fabric swatch to your brand. The entire essential part can be confirmed by the brand by utilizing the 3D Metaverse solution. MAS Holdings (developing a women’s underwear brand based in India) has already started that type of commercial use.
In the future, there are also concerns about the user’s metaverse “immersion”
What are the future challenges in utilizing the Metaverse technology solutions?
There are many challenges. One can point out the ethical side. Specifically, it is necessary to prevent the situation where the user is “immersed” in the Metaverse and cannot get out of it. It is not desirable that the metaverse and the real space become indistinguishable.
At this point, in order to use the Metaverse, you must wear a special headset that is used only for that purpose, or switch on devices such as smartphones and personal computers. Thus, there is still some “switching” of action. Therefore, the boundary between virtual reality and reality is easily recognized. But in the future, wearable devices may replace what you naturally wear like regular eyeglasses. Alternatively, it may be an environment that automatically connects to the Metaverse on the screen of a normal computer. If so, there is concern that this boundary will be difficult to recognize. We believe that the industry should establish some unified regulations and standards.
It is said that Metaverse technology solutions are being increasingly used in online games and conference systems. There is also technology developed by an Israeli company, which has already been put into practical use in several fields. Such movements are attracting attention. At the same time, the challenges of using Metaverse technology have come to be recognized. Therefore, in the future, it will be required to develop and commercialize technology that takes these aspects into consideration, as well as to improve the understanding of users.
Original Japanese version of the interview was with Noburu Yoshida and Alisa Noskin for JETRO Tel Aviv. This is a translated version created by ByondXR.