How sports teams can harness digital technology.

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How businesses view the online domain is changing as advances in digital technology have opened up new ways to interact with customers. The dawn of Web3 is upon us, and this iteration of the internet has the potential to change the way brands function both in the real and virtual worlds. Emerging technologies like non fungible tokens (NFTs), blockchain gaming, and digital fashion are becoming increasingly intriguing to consumers interested in exploring the metaverse.

Sports teams are beginning to explore this new space for consumer interactions, and are devising creative ways to deepen fan engagement. For example, the advent of digitally wearable merchandise that can be adorned by metaverse avatars, is a particularly exciting innovation. Using unique digital IDs, it’s now possible to produce a digital twin of physical garments purchased by customers in the real world, enabling them to also be worn online.

The metaverse, while still young, is already redefining the idea of identity as people can recreate or develop entirely new versions of themselves online. When we consider team sports, a sense of belonging and community is powerful and something many fans have come to rely on. Now sports brands are keen to take this one step further and amplify those same principles in the metaverse too.

Aside from digital fashion, sports brands are also embracing gamification by teaming up with game developers to offer new ways for fans to continue the immersive experience when the match action in the stadium pauses.

I’d like to explore some of the exciting changes we are seeing as sports brands start to embrace the metaverse. The growing pool of available technologies is already vast and it’s thrilling to think about what will come next.

What is The Metaverse and What Does it Mean For Apple

Some enthusiasts believe the metaverse is the next big thing – rivalling the birth of the internet.
It’s a new shiny toy for many industries and it’s predicted to grow in years to come. A report by McKinsey & Company3 estimates the metaverse could generate up to $5 trillion in impact by 2030. For some, it could be a virtual retail hub, while others see it as a portal to digital experiences.

What started as microtransactions in the gaming industry now allows people to enhance an online experience in an interconnected digital environment, sometimes for a small cost. For sports brands, this is an opportunity to build on the connectivity among fans and boost consumer excitement by providing additional ways to engage with sports.

Sports Brands are Capitalising on Metaverse Innovations

Particularly by using NFTs, the metaverse is opening up opportunities for sports teams to engage new and existing fans and create brand new revenue streams. We recently saw Fifa announce
its digital platform Fifa+ Collect4, where it will sell digital assets that depict notable moments, art and imagery. Reminiscent of sports trading cards, this digital treasure hunt provides a novel experience for football fans while boosting the football federation’s income.

Similarly, Zetly, a block-chain based sports platform, has partnered with Haste Arcade’s gaming platform to create new experiences where people can play games and earn additional rewards through micropayments in real-time. It doesn’t stop there. Metaverse use cases for sports brands also extend to apparel. For instance, people can visit ‘Nikeland’6 on Roblox, or the digital world of ZEPETO7, adorning avatars with stylish digital garments similar to real-world merchandise. It’s no secret people care about their online appearance, with social media profiles being an extension of users’ offline identities. Digital avatars are no exception. Digital apparel is a new concept that allows people to express themselves, establishing an online identity where they can also show admiration for their favourite sports teams and brands. From a commercial standpoint, the metaverse is not just an online game – it’s a space for brands to showcase their products and new experiences.

The Power of Customization

Tailoring apparel, like sports kits, to individuals takes the experience of purchasing and owning a garment to a deeper level. Sports fans are imbued with a sense of identity when wearing custom apparel, using the opportunity to celebrate their chosen team, and they are willing to pay. Bayern Munich topped the football kit sales charts in 2021, with 3.25 million 8 shirts sold, showing how much customer support there is for football teams. Looking at the bigger picture, the global sportswear market is predicted to reach $261 billion by 20289.

If this market is integrated into the budding metaverse, sports brands and teams could see a real boost in revenue. Avery Dennison’s external embellishments division, Embelex, is playing a leading role in this transition by embedding digital triggers into Premier League football shirts that can lead fans to exclusive online content. We have also recently partnered with the San Francisco 49ers to introduce digital connectivity to their merchandise.

What’s Next for Sports Brands?

The evolution of the metaverse is challenging brands to think differently about how they market products and what opportunities are available to further consumer engagement. It has also opened up questions about how to monetise these activities online. Selling digitally-wearable shorts for £2 is very different to a £20 pair in the real world, and the commercial applications are still being assessed. The metaverse is changing how fashion is viewed, and the shifting paradigm will bring new challenges to the sports apparel industry.

As we travel further into the metaverse, and the lines between the real and digital world become increasingly blurred, we could see people putting increasing value on digital assets such as NFTs. Sports brands will need to be aware of the different opportunities at their disposal to keep up in this quickly-changing landscape. It’s early days for the metaverse, as the finite definition of what it is and means for consumers is clarified, but brands are experimenting, and certainly, for sports teams, there will be plenty of opportunities to integrate technology in the future.

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Steve Mason

Commercial VP GM, at Embelex.

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