As the metaverse grows in opportunity for companies and consumers alike, new research out of the University of Stirling has discovered that it doesn’t always translate to extra sales for brands.

With brands looking to augment their sales via new revenue streams, many are turning to the metaverse—the internet-driven, 3D virtual space where users, operating as avatars, can have immersive experiences.

In the metaverse, brand owners are launching Unique Digital Assets (UDAs) in the form of digital apparel and accessories, collectible cards, art, and more, which consumers interact with using virtual and augmented reality.

Well-known companies like clothing company Nike and auction house Christie’s have already successfully engaged with consumers in the metaverse through games, limited edition collections, virtual auctions, and other experiences.

However, if a physical version of a brand item also exists, shoppers are less likely to purchase the UDA—therefore suggesting that the mere coexistence of a physical product with a digital one devalues the digital asset.

While previous research has shown that, in isolation, physical products are typically more valued by consumers because they’re tangible and tactile, these new findings point to a devaluation of the digital asset if a physical version of the product already exists in the “real” world.

Researchers at the University of Stirling Management School, University of Edinburgh Business School, Zhongnan University of Economics and Law in China, and Léonard de Vinci Pôle Universitaire in France conducted six online experiments involving over 1,500 consumers to analyse their purchasing patterns and interactions in this area.

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Commenting on the findings, Rob Angell, who serves as Professor of Marketing at the University of Stirling Management School, said: “When brand owners and retailers take a dual-format approach with products – pairing UDAs with physical versions – consumer perceptions of the UDA will diminish.

“So when, for example, a Gucci handbag is available in the metaverse and also in stores, shoppers feel that the digital equivalent is less unique and special. They see other consumers can potentially own physical versions so they have less psychological ownership of it.

“This has implications for how brand owners and retailers manage their products. For many of them, taking tentative steps into the metaverse often means extending their products from the physical to the virtual world.

“Our research suggests that would have limited success as the UDA will always be undermined by its physical counterpart. Our advice would be to offer a digital-only asset or, if a physical version is also to be released, that marketers and retailers are cautious.”

While the study offers what it calls a “practical playbook” for marketers and retailers, the authors say future research should replicate this study across other international markets. UDA adoption rates and familiarity with digital ownership vary widely globally, according to the study.

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