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Virtually Tinted Glasses: Is the Metaverse Harming Consumers?

Published January 22, 2023
Published January 22, 2023

According to McKinsey & Company, the metaverse is estimated to generate $5 trillion in value by 2030. The data shows that e-commerce is the metaverse's largest economic force ($2.6 trillion), followed by virtual learning ($270 billion), advertising ($206 billion), and gaming ($125 billion). Given the numbers, it is no surprise that the immersive world is at the forefront of several conversations since gaining popularity in recent years.

Many beauty companies, including L'Oréal and NYX Professional Makeup, have pioneered metaverse initiatives, making Web3-related campaigns a standard component for branding success. Most recently, NARS announced the next evolution for beauty in the metaverse, revealing their online ambassadors―Sissi, Maxine, and Chelsea―created to "unlock new opportunities as consumer behavior evolves in emerging digital environments."

The new way of engaging with consumers has become so well adopted that almost 60% admit they prefer participating in activities in the metaverse compared to real life. However, while credit should be given where it's due for successful brand activations, the rising infatuation with marketing in this subcategory of cyberspace raises the question: Will the metaverse result in tainted expectations and a disconnect from the real world?

The Damaging Disconnect

Early versions of virtual reality (VR) were first put forward in the late '80s, with the innovation gaining its official title of "the metaverse" in Neal Stephenson's 1992 novel, Snow Crash. Ahead of his time, Stephenson wrote the book unaware that similar technology would gain such popularity in years to come. The book focuses on a corrupt social hierarchy where avatars are idolized based on their image resolution; the higher the quality, the more respected the character becomes. As the story progresses, those with a strong interest in the technological world are described by Stephenson as "gargoyles," more concerned about their simulated self than their off-screen person, "adrift in a laser-drawn world."

Snow Crash can be interpreted as a preemptive warning of the dangers a VR can cause. The text encourages careful navigation of the metaverse and reminds consumers that heavy submersion into such worlds can create increased personal insecurities and a disconnect from physical reality. The book's message also furthers the ongoing debate surrounding the positive and negative implications of people presenting alternative versions of themselves online.

An Influx of Insecurity

The rise of internet users masking reality and emphasizing the best parts of their lives online is nothing new. The narrative has become so heavily discussed that even social media giants are investigating their platforms' impact on self-esteem. But, what makes the conversation even more concerning is how the metaverse will factor into this equation, encouraging people to completely disregard any fundamental aspects of their lives and show up as an avatar.

Jarno Duursma, trend analyst and TEDx speaker, comments on this issue: "The risk of spending time daily as an avatar in the digital world is that we would focus our attention even more outside the physical body than is already the case. To what extent will this increase the distance between the body and head even more? Will it reduce the ability to feel how we are doing? What will it do to the perception of our own bodies? And to the way in which we perceive others?"

Duursma's questioning of the impact the metaverse will have on how we perceive ourselves has infinite answers. While examples such as brands marketing with virtual avatars are fun and currentoffering something new and exciting for consumersbeing exposed to levels of perfectionism crafted by artists can eventually become damaging. Insecurities in real life are sure to be exacerbated by the inability to reach the beauty standards of computerized characters. A human will never be able to obtain the exaggerated ideals of an avatar created to look perfect. Of course, it benefits brands (especially cosmetics companies) to offer avatars that adhere to society's appearance of ideals that use their products. However, this leaves little room for showcasing the human element of individuality and the beauty of imperfections. 

Infrequent Levels of Inclusivity

The Digital Ownership Report 2022 emphasizes that 63% of American millennials expect the metaverse to help them reinvent themselves. Also, 37% of US adults believe the metaverse is more appealing than real life to an extent. While it is disheartening that consumers feel they have to play a characterized version of themselves to have a better quality of life, this is just the surface of the problem.

For those who wish to escape in such ways, there is an ongoing inclusivity struggle because skin tones, hairstyles, genders, and disability-minded metaverse options are limited. A survey of 6,000 respondents by the Digital Institute of Fashion found that 60% feel a lack of inclusivity in virtual worlds. Many companies are trying to tackle this issue. For example, NYX Professional Makeup's partner company, People of Crypto Labs. The initiative creates collections of avatars representing LGBTQ+ and colored communities to ensure there is a character for all. NARS’ avatars also champion cultural diversity, with each character representing a different race.

Although some are expanding the conversation surrounding inclusivity with their avatars and characters, there is still room for improvement. While presenting racial inclusivity, big name brands are missing opportunities to further excel and engage all consumers by providing items beyond the standard. A rare, notable example of this is Clinique's Metaverse Like Us campaign, which includes avatars created by Daz3D, a company recognized for its dedication to creating comprehensive characters.

Clinique launched the campaign to allow consumers to feel seen and featured a diverse group of female avatarsincluding one in a wheelchair, one sporting a religious headdress, and one with vitiligo. Also, Idorua soon-to-be-launched start-up with a similar messagecreated an avatar app that "enables people to be their fullest self." The innovation promotes gender acceptance and allows users to select undergarments instead of asking about their biological sex. The app also renders the ability for consumers to explore hairstyles typically ignored in the metaverse, adding specific options for baby hair and textures.

Creating a larger impact through advertising and offering avatars with differences should be a requirement of today’s leading businesses. The metaverse offers an excellent opportunity to do better when it comes to diversity. Because this innovation is relatively new, there is room for brands to explore the space and present characters and NFTs that bridge the gap between marginalized consumers and Web3 activations.

Even if these brands respond to a wakeup call because of consumers' demands for diversity, there is further discrepancy and a clear divide in NFT priceswith lighter-skinned, able-bodied, and male characters selling for more money because they are perceived to be more desirable. Co-founder of Larva Labs John Watkinson, who creates crypto characters, shared how he intended to create a diverse range of avatars that would appeal to everyone; however, he now feels that inclusivity issues are out of his hands. "We are dismayed with the pricing discrepancies along racial and gender lines in the CryptoPunks," he said. "Unfortunately, as the market is purely decentralized, we have no levers at our disposal to directly affect it." With NFT creators needing help to control the price divide of various races and gendered characters, it may be some time before the metaverse reaches sustainable inclusion levels.

A Capitalist Approach Causing Corruption

Selling more desirable NFTs for a higher price can create problems around classism and capitalism. If the metaverse truly is all-inclusive and has been created to bring communities together, as countless platforms state, it has been set up to fail due to the unfair pricing divides of the collectibles that constitute the virtual hierarchy.

"To play in the metaverse today is expensive," comments Giles Crouch, who is a digital anthropologist. "You need high-speed internet access, a fairly powerful computer, and ideally, expensive VR goggles and a fairly decent knowledge of how this all works and the ability to afford the games and entertainment offered there. Lower-middle- to lower-income people cannot play in this space."

What's worse, by allowing NFTs representing marginalized groups to be priced down compared to their counterparts, the metaverse essentially allows these groups to be identified as less worthy. Unfortunately, the result is the transformation of a space created to champion self-acceptance and inclusion into one filled with prejudice and discrimination.

“The idea of being able to fictionalize your identity and receive very different feedback can mess with a teenager's identity."
By Mitch Prinstein, Chief Science Officer, American Psychological Association

Users Are Unanimously Unaware

While all these issues pose a significant threat to the metaverse and its users, the largest barrier may be consumers' lack of understanding of how the space works. Only 16% said they understood the metaverse—and with a lack of understanding comes an increase in risks. In 2022, the average NFT sold for $150. Given such high price tags and the seductive pull of buying into the hype to stay on top of trends, the metaverse could leave buyers in dangerous financial waters.

On top of the potentially harmful monetary prospects, users are also putting their digital footprints in the hands of a platform about which they know very little. Many spaces across the metaverse encourage consumers to share their personal information, gaming habits, preferences, location, etc. VR applications even go beyond this and track data directly from the user's face. "Strict compliance with notice and consent requirements to protect the use of personal data must be a given as the metaverse community expands," says Dhana Doobay, Head of Technology, Media, and Telecoms at law firm Spencer West LLP.

Because many platforms are new and upcoming, essential security measurements may not be as sophisticated when compared to other aspects of the internet that have had more time to equip themselves against data breaches. Contrary to this, the fact that other online platforms have already experienced data breaches should encourage brands engaging in the metaverse to include high-security measurements from the start. If misused, the metaverse can quickly become a data-hacking minefield. To ensure consumer trust, companies offering such experiences must better enforce security measures and make their platforms as safe as possible.

Security is a prevalent issue, as younger, more influential generations participate in the metaverse, with 60% of metaverse users fitting into the Gen Z age bracket. If only 16% of adults understand the metaverse, with a further 35% claiming they've never heard of it, parents are out of their depth when it comes to protecting their children against potential risks, such as the dangers of data breaches and hacking, as well as the broadly impactful words of online trolls.

"You are what other people think about you in adolescence," comments Mitch Prinstein, Chief Science Officer at the American Psychological Association. “The idea of being able to fictionalize your identity and receive very different feedback can mess with a teenager's identity." Prinstein’s claims hold an important message: Not only are teenagers going to feel pressured to look a certain way in real life due to what they see online, but they are also going to have to deal with what their peers and those they meet on such platforms think of them—opinions that many are likely to voice.

Prinstein continues, "There's a potency about being immersed in a world that is different from observing and interacting … through a flat-screen monitor. Once you're embodied in a space, even though you can't be physically touched, we can be exposed to things that take on a level of realism that could be psychologically assaulting."

Many young people are growing up with the metaverse playing an integral part in their lives, so much so that some Gen Z gamers admit to spending twice as much time with their friends in the metaverse compared to real life. This raises the idea that although we are in the beginning stages of metaverse development, it is concerning how much influence the metaverse already exerts on younger generations. If this is just the beginning of such a large-scale innovation, how many more generations will have a tainted view of themselves, their everyday activities, and life due to the metaverse and those they meet within it?

Growth Going Forward

Despite countless consumers spending an inordinate amount of time submerged in the metaverse, 77% believe it could cause serious harm to modern society. From issues of insecurity to inclusivity, financial threat, data breaches, and a lack of understanding, it is clear that the metaverse should be navigated with caution. Some have even argued that a form of higher authority is required to monitor this fast-paced world. Giles Crouch suggests that the metaverse be governed by an independent structure, such as the United Nations. Whether this idea is a viable one or not, the proposal of it alone confirms that a demand for infinite growth on a planet with finite resources could lead to outcomes beyond our control.

Those who work within the metaverse space feel similarly. “There needs to be guidelines and standards, and I hope they come soon. We have already seen the rise of social media and gaming and how the younger generations have taken to these like a fish to water. These generations will be the same that will adopt the metaverse. So, we need to ensure there are guides to moderation and usage to ensure they are not glued to their screens 24/7,” Rashid Ali, founder and CEO of British Web-3 Company Exarta, tells BeautyMatter.

Ultimately, it is up to brands and consumers alike to decipher if the metaverse is the correct space for them to engage in. Because each individual and every company is unique, everyone will have a different experience. While no single beauty brand has the power to slow down the rapid growth of Web3, each one can control the messages and campaigns they communicate. As long as businesses consciously create inclusive campaigns with positive messages and high levels of security, the metaverse space should continue to grow rapidly and present opportunities in a pragmatic direction.


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