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Virtual Dining

Virtual Dining
The Food and Dining Industry Enters the Metaverse

What does the metaverse mean for restaurants, and how should they invest in this growing virtual space?

The metaverse as a concept is not new, but the buzz around the trend is, especially within the food service industry. Just the word “metaverse” itself still confuses many. In essence, the metaverse is used to describe online virtual worlds that already exist, like Sandbox, Roblox, and Decentraland, as well as an online future where society will spend more time operating a virtual character in an online universe.

The metaverse concept builds on existing tech like extended reality (XR)—which includes virtual reality (VR), augmented reality (AR) and mixed reality (MR)—and marries it with virtual avatar-based gaming simulations. Facebook’s rebrand to Meta has also led food service brands to ask whether this is a disruption they need to be concerned about or a fad that will fizzle out.

While some brands are jumping into the space by filing for trademarks or creating virtual experiences on different metaverse platforms, other brands are still hesitant to invest and waiting for more consumers to engage with the futuristic technology.

This pattern isn’t exactly new—technologies that are before their time often struggle with adoption and fail to make the leap from early adopters to mass markets. However, food service brands have a unique opportunity now to experiment in the metaverse, protect digital brand assets for the future and discover new potential for success.

The hard work will lie in deciphering which metaverse ideas will provide a higher chance for success and deciding the best way to implement and scale them.

Which food industry brands are experimenting in the metaverse?

Although customer adoption and awareness of the metaverse are still low, there’s a proliferation of virtual world platforms that already exist (Fortnite, Roblox, Decentraland, Sandbox and Horizon Worlds, to name a few). Many food and dining brands are already running tests in these different environments.

Here are some examples of what food service players have been trying.

Online metaverse gaming

One international fast food chain opened a virtual restaurant on Meta’s Horizon Worlds app, where customers can play virtual basketball and see promotions.

Roblox virtual food

Another American fast casual chain leveraged Roblox (a platform allowing users to create and share games) to let players earn in-experience currency for real-world items and prepare and serve virtual food. The brand also launched a real-world menu item inspired by the metaverse community.

Metaverse restaurants serving home delivery

Many global restaurant chains have filed metaverse trademark applications for various virtual items and business models, such as "operating a virtual restaurant online featuring home delivery.”

How should food service brands decide where to invest in the metaverse?

Despite the enthusiasm from brands within food and dining and other industries, mass customer adoption of the metaverse is still largely hypothetical. However, Generation Alpha, the generation born between 2010 and 2024, is currently the largest age demographic engaging in metaverse platforms. Two-thirds of Roblox users are under the age of 16, meaning that as this generation grows up, metaverse users will have the spending power to use in this online economy.

But whether brands are thinking long-term strategy or deciding what to invest in right now, there are several ways they can create value in the metaverse.

Building restaurant loyalty in the metaverse

For brands, loyalty programs have two main benefits: increasing transaction volume by improving guest count/guest frequency and building out first-party customer data. Loyalty program activations in the metaverse can do both very well. This is key for brands that are currently working through loyalty program (re)designs by reframing loyalty from a discount vehicle (transactional earn and burn) to a value proposition for customers.

New loyalty programs will grow brand affinity, relevance and connection in new, more integrated ways. It would be a huge miss for brands to limit their thinking about loyalty program design to the physical world.

Creating games in the metaverse for food service brands

There are great examples of quick-service restaurant (QSR) brands experimenting with analog gamification, but these often come with not insignificant overhead.

Gamification in the metaverse is far more natural and can leverage technology, such as blockchains and non-fungible tokens (NFTs), that specifically address some of the challenges of gamification in real life (IRL). Online brand activations can create additional ways for brands to learn more about their customers and increase signals, which can help to build toward more sophisticated personalization.

Hosting a digital brand event in the metaverse

Brands can struggle to find unique program benefits for “true” loyalty members, and online events serve as a unique way to create higher levels of customer engagement than would be practically possible IRL.
Brands already use celebrity partnerships to increase brand profile and relevance. Unique “members-only” access to events in the metaverse are a natural extension and amplify all of the benefits brands are already reaping from celebrity tie-ups.

Creating metaverse brand awareness with key audiences

Fast-food brands today can increase their relevance to a few key audiences to continue to promote growth and brand health, specifically young families and wealthier, more digitally savvy consumer segments.

While these audiences aren’t yet all adopters of metaverse technology, fast-food brands may have unique opportunities to help get them there. Because kids’ meal toys have long been both a blessing and a curse to parents, and COVID-19 has fundamentally shifted the prominence of the play area in creating a draw for kids, the metaverse can be used as a new tool to attract and engage parents and kids in feel-good ways that reduce waste, create fun, leverage existing license partnerships and possibly extend to quasi-educational programs that improve the brand’s reputation.

Investing in next-generation metaverse commerce

Fast-food companies are, in many ways, real estate experts, with a clear understanding of how to optimize store placement within markets to maximize revenue. Brands should absolutely start thinking now about how the metaverse should play into their real estate strategy when it comes to the facilitation of increased online and virtual ordering.

While there are still significant real estate and technology challenges connected to this effort—most notably real estate portfolio optimization, ghost kitchens and point of sale extensibility—some restaurant patents demonstrate that they are already thinking about how they can allow customers to purchase food in the metaverse that will show up via delivery IRL.

Four key metaverse considerations for food and dining brands
There are four main considerations that should be taken into account before investing in a long-term metaverse strategy:

  • 1. Experiment with activations

    through partnerships to begin to test and learn. Where are your customers? Which platforms and what types of activations draw them in?

    2. Consider the importance of earned media

    in decision-making. The metaverse is still splashy, but the novelty will wear off. How can brands benefit from immediate social buzz, and which audiences can be engaged?

    3. Consider extensibility for new digital channels in technology planning.

    While branded apps have been the focus and center of gravity, how can brands prepare to operate in a world that relies on other platforms? How can initiatives around point of sale, product catalog and natural language processing/voice ordering be planned to account for future integration points?

    4. Consider physical real estate in a virtually driven world.

    How much should brands consider factors like full-service versus pickup-only or ghost kitchens in their real estate strategy?

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