Consumer research and behaviour in the Metaverse
Martin Petkov
Writing & Marketing @ Cyfrin: World-class web3 education, tools, and security audits | "Metaverse AI" trilogy author
“While many existing academic theories and findings are likely to hold in the Metaverse, it still represents a novel context that is likely to challenge the traditional understanding of consumer behaviour.” Rhonda Hadi, Sa?d Business School, University of Oxford [1]
Despite much knowledge and best practice, vital questions and considerations about the Metaverse’s impact on consumer research and behaviour remain.
Why it matters
The Metaverse holds transformative potential for consumer behaviour, decision-making, and experiences. However, challenges like inclusivity, ethical data use, and balancing rewarding experiences require careful consideration.
Overview
From this article, you will learn:
- The Metaverse’s influence on consumer behaviour.
- The Metaverse’s role in the future of consumer research and practice.
- How to effectively drive consumer behaviour towards purchase.
- How to build amazing Metaverse experiences, including relevant examples.
- The future of the consumer journey in the Metaverse.
Introduction
The Metaverse will transform consumer behaviour with its multifaceted implications for authenticity, identity, social influence, digital ownership, and consumer research and practice. It challenges traditional consumer behaviour concepts and opens up many new opportunities for marketers and businesses while raising critical questions about user well-being, equity, and ethics.
We will examine the role of avatars and social AI in shaping online and offline identities and the effect of immersive technologies, such as augmented reality, virtual reality, and neuro-enhanced reality, on the consumer journey. We will also discuss the role of cryptocurrencies, blockchains, and non-fungible tokens (NFTs) in redefining digital ownership and consumer behaviour, as well as the importance of understanding consumer consciousness and sensory acceptance within the Metaverse.
Moreover, we will explore the potential impact of the Metaverse on consumer memory, learning, and information processing and the challenges and opportunities it presents for businesses seeking to revolutionise customer experiences. Finally, we will also touch upon the ethical considerations surrounding the Metaverse, such as data privacy, discrimination, and the digital divide, to ensure the development of an inclusive and equitable virtual environment.
The Metaverse’s influence on consumer behaviour
The central question of consumer behaviour in the Metaverse is whether our existing understanding can be generalised to this novel environment. Despite solid parallels to the physical world, such as acquiring products and real-time interactions, the Metaverse differs significantly due to its digital mediation and virtual nature. So let us explore the implications of this new environment in three key areas: consumer identity, social influence, and ownership [1].
Consumer identity
Identity has long been acknowledged as a key factor influencing consumer behaviour, impacting social affiliations, brand preferences, advertising responsiveness, and propensity to engage in prosocial acts [1]. In the Metaverse, individuals can adopt avatar representations unconstrained by their physical forms, potentially leading to profound implications for observed behaviour [2]. Additionally, recent research has explored how individuals represent their identities in virtual worlds [3]. A common finding is that avatar representations are often idealised versions of one’s offline self, sharing gender, appearance, and personality traits, but modified to present the desired image to others [2], [4]. Therefore, we have a solid base of valuable insight to explore the implications of digital self-representation on consumer behaviour.
First, let us explore the relationship between users’ offline and online identities. Early work focusing on World of Warcraft and Second Life suggested that avatars could serve as a means for users to explore different identities, with significant differences between offline and online personas [2], [5], [6]. However, empirical evidence has provided mixed support for this idea [1]. Instead, the physical appearance of the avatars tends to approximate their creators, with shared gender, age, ethnicity, and body shape [3]. When differences occur, they often represent idealised versions of users, such as younger, slimmer or more muscular avatars [7].
Interestingly, we can find the most significant differences between avatars and offline identities in users’ personalities. Avatars are typically more confident and outgoing than their creators and exhibit more desirable personality traits [3]. The psychological process behind avatar creation seems to be influenced by the social and immersive nature of virtual worlds and the desire for self-enhancement [1]. Essentially, users view avatars as virtual manifestations of themselves, discouraging the creation of representations that deviate too much from their offline selves [8]. As a result, they strive to present the best version of themselves when creating avatars [2]. Therefore, a key implication for consumer identity in the Metaverse is that the digital nature of virtual worlds allows for self-enhancement in ways that are impossible offline.
“The juxtaposition of social presence and malleable identity may give rise to unique impression management strategies and signalling behaviours in the Metaverse.” Rhonda Hadi, Sa?d Business School, University of Oxford [1]
Second, it is essential to realise that avatars can influence the offline self as well. Fundamentally, three characteristics influence the creation and selection of avatars in the Metaverse: its digitally mediated nature, shared property, and immersive quality [9]. Additionally, the proteus effect suggests avatars can impact users’ offline identities [10]. In some contexts, this can lead to positive outcomes, such as healthier food choices, reduced racial bias, and alleviated fears during the COVID-19 pandemic [1].
However, the proteus effect can also have negative implications. For instance, taller avatars may lead to more selfish real-world behaviours [11]. Additionally, heavier avatars can reduce physical effort in exercise games, and avatar designs may reinforce gender stereotypes [12]. Therefore, we have robust evidence that the influence between the user and the avatar is bidirectional. Consequently, it seems logical that marketing to avatars could potentially affect the consumer behaviour of the real people behind them.
Third, the evolving meaning of identity in the Metaverse presents challenges and opportunities. For example, where the platform functionality is limited, users may experience less diversity in appearances, personalities, and social structures than in the offline world, which could negatively affect one’s identity [1]. However, in most cases, the Metaverse allows for virtually infinite identities, which could expose users to more diversity and creativity than offline [13]. Because of the bidirectional relationship we discussed, this may impact identities formed both in the Metaverse and offline.
Additionally, the concept of authenticity, the belief in behaving congruently with one’s true self [14], might be questioned in the Metaverse. For instance, since avatars are idealised versions of users, they may be considered inauthentic. Conversely, an existentialist perspective suggests self-expression and active creation are central to the “true self” [15]. In support of this assertion, many users feel their avatars represent their true identities better than their offline selves [16]. All this suggests that the Metaverse could fundamentally redefine the concept of identity with consequences for consumer behaviour.
Social influence
In the Metaverse, users share virtual spaces. So their experiences are subject to social influence, which is a crucial determinant of consumer behaviour [17]. Moreover, social sway affects our emotions, opinions, and behaviours [18] and how we decide [19]. This phenomenon occurs both through active engagement and passive situations, such as mere presence effects [20]. Previously, this research was limited to offline environments due to the prerequisite of physical presence [21]. However, the Metaverse’s immersive nature creates perceptions of social presence and the illusion of co-location, suggesting that the mere presence of avatars may influence consumer behaviour [1]. Thus, social influence in the Metaverse may differ from traditional online settings (e.g., Web2 social media platforms). Therefore, we will critically examine existing social influence theories to understand their applicability to the Metaverse and to identify unique aspects in this new context.
Social distance in the Metaverse is a critical consideration. Social density in the Metaverse has implications for consumer behaviour, with research indicating that physical proximity can result in both positive [22] and negative outcomes [23]. Similarly, crowdedness, while sometimes signalling quality through “social proof” [24], can also negatively affect user experiences and satisfaction [25]. However, users often apply offline norms in virtual environments, feeling threatened when someone invades their private virtual space [26].
The Metaverse, however, presents unique opportunities to digitally manage social distance and density. For instance, Meta’s “safe zone” feature helps protect users from uncomfortable proximity or unwelcome advances [27]. Additionally, platforms can control negative sensory artefacts associated with high social density through coding and infrastructural design, such as limiting auditory chaos or visually rendering fewer users in a given space [28]. Therefore, even if the Metaverse may encounter similar personal space challenges as the offline world, its digital nature allows architects to optimise settings that fulfil social needs and minimise undesirable consequences. In turn, these capabilities could create more desirable environments, favourably affecting consumer behaviour.
“While social influence in the Metaverse will continue to manifest in both passive and interactive forms, the platform’s combined characteristics will arguably alter how we are influenced and whom we are influenced by.” Rhonda Hadi, Sa?d Business School, University of Oxford [1]
Impression management in the Metaverse is another crucial consideration. For instance, in public settings, consumers tend to modify their behaviour due to impression management concerns, aiming to convey a favourable image to others [21]. In the Metaverse, co-location with other avatars heightens social presence, leading to impression management influencing consumer behaviour, particularly for digital goods that hold value only within this virtual environment [1]. In addition, the Metaverse allows users to notice other avatars’ physiological traits and possessions [29], potentially impacting digital goods purchasing decisions based on the meaning conveyed to other users.
However, this may only apply when users are identifiable by their avatars, and the Metaverse enables adopting multiple avatars, some of which may be transient or relatively anonymous. This flexibility could, in theory, reduce the need for consistent image management in line with societal norms [30] in specific virtual settings. This means that consumers’ impression management concerns and signalling behaviours may change depending on the avatar they assume. For example, they might curate distinct digital goods collections for each persona, giving rise to unique impression management strategies and signalling behaviours in the Metaverse [1]. Therefore, the intersection of social presence and malleable identity presents an intriguing area for further exploration, as it could reveal how consumers navigate this complex virtual space and adapt their behaviours to manage their image effectively.
Word of mouth (WOM) dynamics in the Metaverse are another related concept with significance. Existing research has explored the impact of social influence and word-of-mouth (WOM) on consumer behaviour in traditional online settings and offline interactions [31]. However, unlike other environments, where WOM occurs in a one-to-many fashion through social media content or online reviews[32], the Metaverse’s spatial and synchronous nature restricts social exchanges to co-located individuals in a digital space at a given time. Consequently, metaversal WOM exchanges may differ from offline interactions as consumers worry more about being misunderstood when using voice technologies, leading them to think more carefully about phrasing [33].
On the other hand, the Metaverse’s spatial and real-time characteristics might enable more dynamic and conversational exchanges resembling in-person interactions [1]. This is because platforms support spontaneous encounters [34] and allows users to co-experience events and participate in activities together [35]. Therefore, in contrast with traditional social media platforms’ static, curated, and impersonal nature, the Metaverse could foster greater dynamism, spontaneity, and more personal connections.
Additionally, avatar use in the Metaverse could shift the focus from visual self-presentation to substance and content [36]. Although avatars’ visual appearance still matters, the knowledge that they are synthetic representations might lead consumers to place more value on the quality of interactions. This, in turn, could mean that marketing efforts to affect consumer behaviour may need to focus on optimising content and experience rather than obsessing over avatar customisation.
Finally, let us discuss the role of social artificial intelligence (AI) in the Metaverse and how it may influence consumer behaviour. Social AI, such as social bots and AI influencers are gaining popularity across social media platforms [37]. In the Metaverse, the embodiment of AI agents as avatars may make them more integrated, less detectable, and potentially more persuasive [38].
Thus, consumers might be more willing to engage with known AI agents in the Metaverse for two reasons. Firstly, users often strongly identify with their avatars [2], making them feel more similar to AI agents as the distinction between artificial and human entities becomes blurred. Secondly, the experiential nature of the Metaverse, with users seeking real-time experiences [39], may make consumers more open to interactions with non-human entities, particularly in fantasy-like environments where disbelief is already suspended.
In conclusion, social influence in the Metaverse, derived from both human and non-human entities, will likely differ from traditional settings due to the platform’s unique characteristics. The Metaverse’s immersive nature and the use of AI agent avatars may lead to more willingness to engage with social AI and alter how consumers are influenced. Understanding these differences is crucial for predicting and managing consumer behaviour in the Metaverse.
Digital ownership
In the virtual age, possession is evolving as researchers focus on the “digital ownership” of non-material goods [1]. The Metaverse, a virtually mediated realm, brings unique characteristics that alter the nature of digital ownership and its influence on consumer behaviour. So, now we’ll discuss the mechanics of establishing ownership in the Metaverse, the implications of coin expenditure and non-fungible tokens (NFTs) on consumer behaviour, and the role of NFTs as possessions.
Cryptocurrencies, blockchains, and non-fungible tokens (NFTs)enable ownership in the Metaverse. In this digital realm, coins (fungible tokens) are used for transactions, and NFTs signify unique ownership of products, acting as certificates of product-specific data [29]. Coins are often specific to platforms, and you must exchange them to use them elsewhere. These transactions generally precede ownership in the Metaverse.
Notably, the method of acquiring products can influence consumer behaviour. For example, in the Metaverse, coin expenditure might resemble credit card spending due to its intangible nature and decreased transparency in usage [40]. However, coin nomenclature and display settings across platforms may affect the pain of payment in various ways, either exaggerating or attenuating it. Some platforms utilise these considerations by offering credit lines to reduce the immediate pain of payment [41].
“Although ownership is likely to remain a relevant and fundamental concept in the Metaverse, the concept of ownership in this context will change, as will its precursors and consequences.” Rhonda Hadi, Sa?d Business School, University of Oxford [1]
We know that consumers account for their money mentally, creating categorical buckets for specific uses [42]. This concept may apply to coin expenditure in the Metaverse, influencing users’ propensity to purchase certain products based on platform associations. Additionally, users’ mental accounting could be influenced by the various avatars and identities they adopt within the digital environment. Altogether, the evolving concept and means of establishing ownership in the Metaverse would likely affect consumer behaviour.
Additionally, coins in the Metaverse have often been considered investment vehicles due to their high volatility [43], introducing an intertemporal component to their use. The uncertain future value of coins may deter transactions and product acquisition as consumers weigh potential increases or decreases in value [44]. Therefore, the complexity of decision-making and consumer behaviour in the Metaverse is influenced by factors such as pain of payment, mental accounting, and the intertemporal nature of coin values.
Finally, NFTs in the Metaverse certify digital goods ownership, potentially increasing consumers’ confidence and psychological ownership [45]. Although products in the Metaverse are visual replicas of material goods, their literal material functions often become irrelevant. However, impression management, identity signalling, and conspicuous consumption may become dominant motives for ownership in the Metaverse [1]. Still, brand and product associations will likely remain crucial drivers of consumer purchases, as evidenced by luxury purveyors being the first movers in the NFT space [46]. Furthermore, the ability to signal status through luxury good ownership is supported by NFTs, which certify ownership and authenticity publicly, addressing issues with grey markets and counterfeit goods [29].
NFTs can contain information, such as provenance, previous owners, and prices paid, which may influence ownership desires [47]. However, the permanence of this information may deter some users due to privacy concerns and potential embarrassment from previous ownership [1].
Altogether, the limitless possibilities of Metaversal products provide new consumption practices and marketing strategies but may also be daunting for users. For example, the vast number of goods and atypical product categories could generate disfluency and cognitive paralysis, suggesting choice overload [48]. Additionally, negative consequences, such as lower satisfaction and post-decision regret, may also occur [49]. Thus, users in the Metaverse may rely heavily on heuristics when making purchasing decisions and engaging in peripheral processing [50].
In conclusion, the Metaverse presents a novel context that challenges the traditional understanding of consumer behaviour. While existing academic theories and findings may still apply, the Metaverse distinctly affects consumer identity, social influence, and ownership.
With the context of this preliminary understanding, let us explore some of the more future-oriented possibilities that the Metaverse can unlock.
The Metaverse’s role in the future of consumer research and practice
This section will explore the implications and potential of the Metaverse across consumer research and behaviour factors such as insights, flow, well-being, consciousness and sensory acceptance, and Neuro-Enhanced reality (NeR).
“The marketing implications from the widespread adoption of the Metaverse are transformational, offering new levels of interaction with consumers and a huge potential to position brands within XR customer journeys.” Yogesh K. Dwivedi, Digital Futures for Sustainable Business & Society Research Group, Swansea University [51]
Customer insights in the Metaverse
With its immersive AR and VR applications, the Metaverse promises to revolutionise marketing by offering new opportunities for customer interaction, advertising, branding, and product development [52]. Emerging technologies, such as AI and machine learning, will likely contribute significantly to the Metaverse’s cultural impact and potential marketing implications [51]:
- The Metaverse enables the generation of vast volumes of customer data through connected devices, providing valuable marketing insights and the potential for tracking consumer behaviour [51]. This information can, in turn, help predict product sales, visualise consumer actions, and analyse customer perceptions.
- The Metaverse also facilitates enhanced concept testing by allowing firms to deploy competing designs in a virtual environment, enabling faster and more accurate product development
- It also offers exciting opportunities for qualitative and quantitative market research, emulating and enhancing traditional face-to-face and online techniques.
However, as the Metaverse expands customer insights, ethical considerations, particularly regarding privacy, must be addressed [51]. The potential for misuse of metaverse data raises concerns about governments, corporations, and hackers exploiting this information for control, profit, or illicit purposes. Consequently, firms will face increased pressure to address consumer privacy concerns in the Metaverse compared to traditional online environments. In summary, the Metaverse holds enormous potential for marketing, but ethical considerations must be carefully managed to maintain consumer trust and privacy.
Consumer flow in the Metaverse
The Metaverse blends our digital and physical lives and utilises AR and VR technologies to foster deep user engagement [53]. This environment can transform how people and organisations interact, influencing social interaction, entertainment, e-marketing, virtual trading, and finance [54]. All this is conducive to experiencing flow, an optimal mental state characterised by full immersion in an activity [55].
As the Metaverse gains prominence, researchers must explore how to measure flow within this new context, identify features critical for generating flow experiences, and examine the underlying processes that lead to specific user behaviours [51]. Notably, flow consciousness may play a role in purchasing behaviour and user emotions, providing additional avenues for investigation [56].
Moreover, the Metaverse’s impact on customer experiences (CXs) and flow states should be examined in the context of touchpoints between companies and customers. Identifying the optimal combination of touchpoints, including the Metaverse, will be crucial for generating positive CXs and flow states. Finally, researchers should explore how the Metaverse can mix and enhance customer journey touchpoints to achieve this goal. Overall, the Metaverse presents a unique opportunity to explore the concept of flow, its measurement, and its influence on user behaviour and experiences [51].
Consumer well-being
The Metaverse presents an opportunity for marketers and consumers to create novel experiences and practices with the potential to deliver value and enhance well-being [51]. However, the challenge lies in utilising this technology to generate value for users and ensure its seamless and inclusive delivery across demographics. So researchers aim to address this, employing experimental methods, phenomenological interviews, and conceptual studies to gain psychological, sociocultural, and practical insights.
Inclusion is a key value that the Metaverse could enable, making scarce resources and services, such as healthcare and education, accessible to all populations by overcoming geographic distances and reducing costs. Additionally, the Metaverse could provide immersive experiences for both utilitarian and hedonic consumption, potentially reducing pollution, congestion, and damage to tourist areas by minimising physical travel [57].
Despite these opportunities, challenges remain in ensuring that companies prioritise consumers’ well-being over profit motives. Ethical use of data from the Metaverse is crucial in creating value and promoting well-being [58]. By directing technology towards serving humans better, the Metaverse has the potential to address significant societal and marketing challenges, such as healthcare, education, pollution, sustainability, and tourism, ultimately benefiting consumers and society as a whole.
Consciousness and sensory acceptance
As we know, the Metaverse offers marketers new avenues for retailing, branding, and advertising, potentially adding value to the customer purchase journey [53]. However, the psychological impact of consumer consciousness in the Metaverse remains unexplored. With numerous conscious diversions and stimuli, the Metaverse may cause consumers to experience incongruent or subconscious focus, affecting their decision-making processes [51].
Sensory inputs in the Metaverse, including visual, acoustic, and tactile stimuli, contribute to consumer consciousness, along with environmental factors and social interactions. These factors can influence consumer decision-making and experience[59]. Hence, marketers face the challenge of navigating the complex Metaverse ecosystem to create an optimal conscious journey for consumers.
Therefore, marketers should explore how to optimise sensory inputs in the Metaverse. The goal should be to gain consumer attention, examine the effect of inconsistent attention on the consumer purchase journey, and investigate the role of branding and advertising in sensory marketing efforts. Additionally, it is vital to establish whether sensory marketing strategies differ between traditional, digital, and Metaverse ecosystems. With such insight, marketers can integrate environmental, social, and technological functions to create a goal-oriented consumer journey in the Metaverse.
Exploring the experiential continuum
Consumer behaviour in the Metaverse spans a continuum from augmented reality (AR), an extension of the real world, to virtual reality (VR), which transports users to entirely different places and times. AR and VR contribute differently to the consumer journey, with AR supporting the purchasing process by providing confidence, while VR is characterised by immersion [60].
The neuromarketing literature has focused on neuro-enhanced reality (NeR), which interfaces directly with the human brain, bypassing sensory perception stages. Although currently limited to laboratory settings, NeR is expected to enter the wider market carrying significant ethical implications [61]. In addition, NeR can enrich CXs and create value but also poses risks that marketers must be aware of when transitioning to the Metaverse [62].
Using NeR, marketers may overstate the reality of their offerings or add sensorily deceptive information, nudging or directly influencing customers to buy products with limited value outside NeR. This could make customers invest disproportionately in the Metaverse [63]. Hence, marketers must understand when and how this virtually created ‘falsity’ can negatively affect consumers and businesses. Therefore, striving for a balance that makes rewarding consumer experiences and furthers the buyer journey fairly and objectively is vital.
Now we have a robust understanding of the existing and emerging implications of the Metaverse for consumer research and behaviour. It is time to explore best practices for designing a compelling experience that drives purchase based on existing research.
Driving consumer behaviour towards purchase
This section delves into the intricate aspects of virtual commerce, focusing on a conceptual framework that underpins purchase behaviour in the emerging virtual marketplace. We will examine the influential factors essential to designing virtual commerce platforms, highlighting their significance in driving consumer engagement and transactions. Additionally, we will explore how application design can promote purchases, illustrating the potential impact of well-considered user experience and interface elements in virtual commerce settings [64].
Furthermore, we will discuss the broader implications of virtual commerce application design on the digital economy, emphasising the importance of understanding and catering to evolving consumer behaviours and preferences. Lastly, we will discuss future research avenues, suggesting potential areas of exploration that can further advance our understanding of virtual commerce and its influence on consumers and businesses.
A conceptual framework for virtual purchases
The conceptual framework of user purchase in virtual commerce focuses on influential factors such as user satisfaction, user trust, enjoyment, product attitudes, attitudes towards innovative technology, and branding. Specifically, the framework is derived from various models reviewed in numerous papers, following a detailed scientific procedure [64]. While an in-depth discussion is beyond the scope of this work, what follows is a high-level overview.
- Purchase intention, although not necessarily leading to an actual purchase [65], is a suitable estimator of actual behaviour [66]. After extensive research, eight consumer outcomes were identified as directly related to purchase intention [64]:
- Attitudes toward technology: Feeling toward immersive technology. Concentrating on the effectiveness of augmented reality (AR) and the factors influencing consumers’ perceived usefulness of AR, such as perceived enjoyment and informativeness, tend to be beneficial for this outcome.
- Brand attitude: Feeling toward the products and services of a brand. Studies revealed the importance of flow, sense of presence, brand recall, return visit rate, virtual experience, interactivity, vividness, and involvement in nurturing consumer purchase intention.
- Endowment effect: Bias of a consumer’s evaluation of products they own was found to moderate consumer valuation
- Enjoyment experience: Joy of shopping stimulated by immersive technology. Factors contributing to enjoyment included discovering new products, interaction with people, telepresence, and perceived social presence.
- Product attitude: Evaluation of products presented with immersive technology. Focusing on modality richness, consumer involvement, cognitive elaboration, object interactivity, and consumer goals helps improve this outcome.
- Trust: Willingness to further interact with a virtual shopping environment. Shopping attitudes, perceived telepresence, and social presence help cultivate consumer trust.
- User satisfaction: Whether the virtual shopping environment satisfies needs. Factors such as enjoyment, engagement, perceived quality assurance, and ease of use affect user satisfaction in virtual store settings.
- Utilitarian value of product: The perceived usefulness of a product was identified as a mediator of purchase intention
Fig. 1 illustrates how these outcomes interact to influence purchase intention.
After continued analysis, including conretisation, signification, and categorisation of the presented concepts, researchers identified some critical considerations for influencing consumer behaviour.
Promoting purchase through application design
To promote purchase in virtual commerce, application design should focus on improving the previously identified factors. These factors represent the fundamental effects of immersive technologies on consumer purchasing behaviour. Effectively, commerce application design can be viewed as an aggregation of multiple low-level design artefacts, which can be mapped to factors and thus seen as purchase drivers [64]:
- Most design considerations should address consumers’ perceived ease of use, which mostly relates to Augmented Reality (AR. These include mobility, standalone, hand-free AR solutions, and innovations in tracking and matching algorithms. Additionally, design artefacts focusing on virtual shops can contribute to ease of use, such as intuitive shopping interfaces, navigation aids, and personalised shopping experiences. In addition, using software agents for navigation and decision support, along with client accessibility improvement, can also reduce a consumer’s effort in online shopping.
- Usability is the second most covered factor. Some design techniques are product-oriented, such as locating a retailer or product within a complex 3D environment and providing search or recommendation features. Virtual store design guidelines, VR shopping experience enhancement, product customisation solutions, and dynamic product updates also contribute to usability.
- Virtual agents also deserve considerable attention as they provide various functionalities, such as price negotiation, information query, navigation assistance, and decision support, stimulating a sense of sociality.
Additionally, four design artefacts can augment spatial presence, experienced realism, and user engagement, believed to mediate telepresence:
- Combining virtual environment and sociality
- Fashionable facial accessories try-on
- Intuitive virtual shop interface
- Realistic product modelling
- Virtual malls connect multiple separate virtual stores, enhances spatial presence and offers a continuous shopping layout for a sense of reality and ease of navigation.
- Social presence can be stimulated by improving system scalability, increasing consumer capacity within a virtual environment, and facilitating co-location and interaction of multiple users.
- Telepresence is enhanced by product customisation techniques that increase object interactivity.
- Realistic product modelling techniques evoke experienced realism and influence 3D authenticity and vividness, contributing to consumers’ simulated experience.
- Lastly, two design artefacts drive trust. The first utilises a reputation mechanism using buyers’ objective feedback and subjective perceptions. The second features a multi-stage agent-based interaction design for trust-building by demonstrating sellers’ benevolence, competency, and integrity.
In conclusion, virtual commerce application design should focus on improving factors that enhance consumer purchasing behaviour. Key elements include ease of use, usability, virtual agents, spatial presence, experienced realism, user engagement, telepresence, and trusting belief predictability. By addressing these factors, designers can create immersive and engaging virtual commerce experiences that promote consumer purchase [64].
Practical steps
Putting these concepts into practical actions can consist of three steps: business objectives identification, design requirements analysis, and design pattern determination [64].
- Identify high-level business objectives among the six dimensions of influential factors we discussed previously: technology attitude, brand attitude, product attitudes, enjoyment, trust, and user satisfaction.
- Analyse design requirements: The various design artefact we discussed previously can now be mapped to five design requirements: forms of immersive technology (e.g., AR/VR/VW), appearance and function of the user interface, performance (efficiency of given tasks), intelligence (intelligent tools to automate specific jobs), and function (the special purposes of an application). Here, practitioners should analyse pairwise relations between design requirements and business objectives by mapping outcomes, influential factors, and design artefacts that can support them. For example, the goal of user trust can be converted to interface and function requirements, which comprise most design artefacts.
- Determine design patterns: This step helps recognise applicable design patterns for business objectives and determine the most cost-effective and efficient plan for application design. For instance, if the goal is to achieve a positive product response, product attitude can be improved with authentic, informative, and vivid 3D displays. In addition, forms of immersive technology and function become the most prominent requirements, with suitable design patterns being AR-based realistic product rendering and AR-based information presentation.
In the future, tech teams can develop application prototypes using these design patterns, empirically evaluate their effectiveness, and understand their priority, importance, and implications for high-level design objectives. The most appropriate design patterns for virtual commerce applications can be identified by following these steps, ensuring a cost-effective and efficient approach to application design that aligns with business objectives [64].
Now we understand the effects of the Metaverse on consumer research and behaviour. We also highlighted the essential design considerations for consumer purchase in these environments. So it is time to move from theory to practice and explore real-world examples.
Building amazing Metaverse experiences
We established that the Metaverse provides a unique opportunity to revolutionise the CX. Additionally, it offers enhanced interactivity, personalisation, and adventure in interactions between companies and customers. In addition, it is transforming the consumer experience in three key ways [67]: 1) through innovative product discovery and exploration methods; 2) by effectively merging physical and virtual product experiences; and 3) by rekindling relationships with “digital humans” or AI-powered bots in virtual settings.
“The Metaverse presents a once-in-a-generation opportunity to reinvent the consumer experience, by incorporating greater elements of interactivity, personalisation, and adventure in your company’s interactions with customers.” Mark Purdy, an independent economics and technology advisor based in London, UK [67]
Innovating product discovery and exploration
The Metaverse enables innovative methods of product discovery and exploration through immersive experiences. For instance, Celebrity Cruises launched the first virtual cruise ship, Celebrity Beyond, allowing potential passengers to take a 360-degree tour of the ship before sailing [68]. This initiative helped re-engage with prospective customers after the pandemic’s devastating impact on the travel industry. By offering virtual tours of destinations like Japan, the Caribbean, Alaska, and Europe, Celebrity Cruises enhances the CX.
In the automotive sector, the Fiat Metaverse Store allows customers to virtually explore and test-drive the new 500 La Prima by Bocelli model [70]. Customers can personalise the car set-up, explore driving and infotainment features, and take the vehicle for a virtual test drive (Fig. 2). This metaverse-based approach provides a comprehensive, engaging experience for customers considering a significant purchase.
Hyundai and Chipotle Mexican Grill are other examples of brands using the Metaverse to educate consumers about their products and processes. For example, Hyundai’s Mobility Adventure [71] on Roblox helps younger consumers learn about advanced mobility solutions. Similarly, Chipotle Burrito Builder [72] on Roblox provides an interactive burrito-making experience, allowing customers to earn credits for real food while engaging with the brand’s history and offerings.
Merging physical and virtual experiences
The Metaverse also allows for the fusion of virtual and physical goods, creating unique CXs. London-based fashion brand Charli Cohen produces limited physical editions of clothing and virtual counterparts for gaming, virtual reality, and metaverse environments (Fig. 3).
Moreover, by collaborating with iconic gaming company Pokémon and Selfridge’s department store, Charli Cohen launched Electric City, where customers can browse and purchase physical Pokémon-branded fashion items or shop for limited edition digital wearables (Fig. 4).
Coca-Cola has similarly embraced the Metaverse, celebrating its first anniversary with a digital design drop inspired by the bubbles in a Coke bottle [75]. The company has also used digital drops to celebrate occasions like Pride Month and Halloween, alongside physical product releases such as the experimental Starlight range of soft drinks [76]. This fusion of physical and virtual worlds presents new opportunities for customer engagement.
Similarly, digital twins are crucial in connecting the physical and virtual worlds. Treedis, an Israel-based company, uses digital twins to create immersive experiences in sectors like retail, real estate, and hospitality [77]. During the Covid-19 lockdown, Treedis built a complete digital twin of The City of David and the whole old city of Jerusalem, attracting over one million monthly visitors to the immersive site (Fig. 5). Digital twins enable rich, engaging narratives that appeal to diverse audiences.
Rekindling relationships with 'digital humans'
Brands are adopting AI-powered customer agent avatars or “digital humans” to provide more personalised interactions. For example, South Korean life insurance company Hanwha Life developed Hannah, a virtual financial planner targeting millennials and Gen-Z customers (Fig. 6).
Aimedis, an e-health platform, introduced Ava. This AI-powered digital assistant helps patients, doctors, and healthcare workers access advice and support services on the Avalon medical metaverse platform [80].
Similarly, Voicehumans created Lia, a digital personal shopper that assists customers in making entertainment and shopping decisions in malls [81].
Obstacles and solutions
Despite the growing and transformative potential of the Metaverse, challenges remain. Companies venturing into the Metaverse should consider the following imperatives [67]:
- Perfect the “drop” technique: Metaverse marketing and promotion will rely on managing “the drop” – virtual collectibles such as art, designs, and memorabilia sporadically airdropped into customers’ digital wallets as a means of rewarding loyalty, promoting new launches, or reinforcing brand values. CX professionals must consider factors like timing, location, surprise elements, and creating NFTs that align with brand identity. Relevant examples here include Burger King’s launch of the ‘Keep It Real Meals’ NFT campaign [82], Gucci’s drop of digital fashion items to 5,000 of its most loyal followers [83], and the previously mentioned Celebrity Cruises’ NFT at Sea collection.
- Engage customers through gaming: In the Metaverse, games and contests will be integral to the consumer experience. Gucci Vault, for example, encourages players to compete for vault boxes, unlocking entry to raffles for digital money and collectables [85]. Charli Cohen’s Electric City offers treasure hunts with physical merchandise and digital collectables as rewards [74]. Finally, Louis Vuitton’s The Game sees millions of players compete for 200 digital candles (representing its 200th anniversary) to enter a raffle featuring designer-created digital postcards.
- Utilise data for deeper insights: The fusion of metaverse and physical environments enables new analytical insights into consumer behaviour and experiences. As Treedis demonstrates, metaverse-based applications allow a deeper understanding of consumer profiles, behaviours, and experiences. Strategic planners and marketers can gain valuable insights by observing customers’ paths through stores or showrooms, where their gaze lingers, and from which angles they view products. Leveraging insights from both virtual and physical worlds will be critical for marketers, product designers, store planners, and CX professionals.
“With metaverse-based applications, we can start to better understand consumer experiences, profiles, and behaviors. We can see their path through the store or showroom, where their gaze lingers, which angles they view products from, and so on. These all give important new insights to strategic planners and marketers in business.” Nathanael Lumbroso? - Co-Founder & COO - Treedis [67]
In conclusion, the Metaverse offers a unique opportunity to reinvent CXs across industries. Through innovative product discovery and exploration, the fusion of physical and virtual product experiences, and reestablishing connections between people and brands with digital humans, the Metaverse can transform the customer experience landscape. Marketers, business planners, and product developers must seize this opportunity and adapt to the emerging challenges to thrive in this new environment.
Now that we have seen numerous real-world examples, let us explore the future of consumer research and behaviour in the Metaverse.
The future of the Metaverse consumer journey
Despite much research and best practices in the field, many unanswered questions remain regarding CX in the Metaverse. This section will aim to address some of them.
Why do users enter the Metaverse?
Key motivations include sociality (the desire to connect with others and alleviate loneliness) [87], escapism (indulging in virtual environments to avoid real-world problems) [88], and pure entertainment [1]. However, the Metaverse offers a more complex and multifaceted environment than traditional online experiences, which may result in unique motivations and engagement patterns. The immersive nature of the Metaverse may limit casual engagement as users may be less distracted and cognitively depleted than social media users. Additionally, individual differences play a significant role in Metaversal engagement. Understanding the motivations of various consumer categories is crucial to comprehend overall participation in Metaversal experiences better [1].
The sociality motivation implies that those seeking companionship, particularly individuals experiencing loneliness, may be more inclined to enter the Metaverse. Demographic factors likely also contribute to user motivations. For example, while younger generations like Gen Z currently dominate gaming in the Metaverse [89], seniors with reduced mobility are drawn to the immersive and transportive qualities of Metaversal experiences [90]. Consequently, future research should investigate how generational divides influence both the propensity to access the Metaverse and how consumers engage with it.
Will it change how we think?
The Metaverse could affect consumer cognition with consequences for memory, learning, information processing, and mindset adoption.
Regarding consumer memory and learning, the Metaverse may modify or distort consumer memory, similar to how reliance on search engines can lead people to mistake the Internet’s knowledge for their own [91]. Immersive and sensory-rich environments in the Metaverse could result in source confusion, particularly with AR applications. For instance, consumers may forget whether experiences occurred in the Metaverse or the physical world. Thus, future research should document the antecedents and consequences of potential source confusion and false memories in Metaversal environments and identify possible remedies [1].
However, the Metaverse’s immersive nature may sometimes improve consumer memory. For example, adopting a first-person perspective can enhance learning and memory [92], and these benefits may be further amplified by physical gesturing due to muscle memory effects [93]. Consequently, it may be interesting to explore further conditions that enhance memory and learning in the Metaverse and how to design optimal contexts for these purposes.
In terms of information processing and consumer mindsets, consumers process information differently in online and offline environments [94]. Neuroscientific evidence suggests that the brain often fails to differentiate between real and virtual experiences [95], indicating that the Metaverse may induce specific information-processing styles. Factors such as familiarity with the environment and the similarity of the adopted persona to one’s offline identity may influence cognitive demands in the Metaverse. Understanding these mental tolls is crucial, given the effects of cognitive depletion on decision-making [96] and self-regulation [97]. It may be tempting for marketers to exploit these limitations of the human mental apparatus but responsible and ethical design principles would dictate against such exploitative practices.
Investigating how fantastical Metaversal environments prime unique thinking styles, such as experiential thinking [98] or magical thinking [99], and their impact on downstream consumer behaviours is also worthwhile. Moreover, the Metaverse’s potential to foster growth mindsets [100] may lead consumers to pursue self-development goals and learn new things more readily. In light of this, it is not surprising that education and learning are among the most explored research areas and popular use cases in the Metaverse [101]
Will the Metaverse change the way we shop?
The Metaverse presents a new environment for social interaction, entertainment, and a virtual online marketplace where consumers can browse, purchase products, and use virtual currencies [102]. The potential implications of the Metaverse span across omnichannel experience, marketing communications, and branding [1].
Omnichannel experience in the Metaverse could be essential to firms’ strategies as we advance [103]. For example, the Metaverse might function as a virtual marketplace decoupled from the physical world’s economy [102] or as an extension of firms’ current online marketing efforts, with consumers shopping for physical products. Luxury retailers have created digital twins of their physical stores in the Metaverse [104], and some retail outlets have paired physical purchases with virtual twins [105]. Thus, it may be reasonable to explore how consumer experiences in Metaversal and non-Metaversal channels coexist and interact.
Marketing communications and branding in the Metaverse may offer unique and novel ways of communicating with potential and existing customers [53]. Furthermore, advertising in the Metaverse could involve product placements and adaptive digital billboards. The Metaverse may challenge traditional concepts of attention and persuasion, as users can navigate and explore spaces freely, posing new challenges for attracting and guiding consumer attention [1]. Moreover, the ‘apparently’ self-guided format might also limit consumers’ conscious knowledge of the influences they have been subjected to [106].
Avatars and rich new media formats could be leveraged by brands to communicate with consumers in the Metaverse. Although research has examined AR and VR in advertising contexts [107], consumer responses may differ when integrated within a broader Metaversal experience. Therefore, researchers should explore these potential avenues to understand how consumers respond to new communication formats in the Metaverse.
Additionally, deploying interactive, AI-powered avatars may facilitate brand anthropomorphism and represent a novel route for developing consumer-brand relationships. Future research might explore these possibilities and other consequences of shared immersion with brand avatars [1].
Will the Metaverse change how we interact?
In the Metaverse, social presence may be more crucial than network breadth, with communication relying heavily on subtle cues such as voice intonation and body language [1]. This could counteract the ‘toxic inhibition’ observed in traditional web environments, where a lack of face-to-face contact and anonymity can lead to increased bullying and harassment [9]. However, using avatars that do not resemble their owners could arguably heighten anonymity and exacerbate toxic inhibition. So it could be wise to consider the correct design principles and regulations to manage these trade-offs for user safety and well-being.
The Metaverse’s influence on social cohesion is also worth considering. Traditional online environments often foster ‘echo chambers’, where hyper-targeting and customised content expose users only to like-minded individuals [37]. Although real-time targeting and content customisation in the Metaverse remain unclear, the spatial and immersive properties could lead to users inhabiting different virtual worlds, potentially resulting in further polarisation of ideas [1].
Nonetheless, some emerging applications in the Metaverse may promote social cohesion. For example, Meta’s universal speech translator provides instant AI-powered translation of widely spoken languages [108], potentially reducing language barriers and fostering cohesion across cultures. Hence, future research should explore these propositions further to understand the implications of the Metaverse for interpersonal communication and social cohesion.
How will the Metaverse affect user well-being?
The Metaverse represents a novel phenomenon that may influence various facets of consumer well-being. So it is crucial to consider its downstream consequences focusing on social health, self-esteem, addiction, and privacy [1].
In terms of social health and loneliness, it is unclear whether Metaversal experiences will alleviate, perpetuate, or exacerbate feelings of loneliness. While heavy social media use has been linked to greater feelings of social isolation [109], Metaversal features could generate both positive and negative outcomes. Thus, future research should examine individual-level and contextual factors that determine how feelings of loneliness are affected during and after VR experiences.
Engagement in the Metaverse might influence users’ self-esteem in various ways. While avatar usage could reduce body-image issues, it may also exacerbate “perfection fatigue” [110] and contribute to adverse effects similar to airbrushing and photo-editing applications on traditional social media platforms [111]. Conversely, avatar customisation might provide identity-affirming experiences for some users, benefiting mental health. Therefore, it is worth exploring how avatar adoption in the Metaverse affects mental health and well-being.
Escapism and addiction are also essential factors to consider. The immersive nature of the Metaverse might make it particularly addictive, especially for those who wish to escape the realities of the physical world. Excessive usage could lead to serious mental health issues [112]. Still, in specific contexts and doses, the Metaverse might serve as a beneficial reprieve from the stresses of the physical world [113]. Thus, understanding how and when Metaversal escapes advance or detract from users’ mental health is a vital area for future investigation.
Lastly, privacy concerns arise from the bidirectional flow of information in the Metaverse. Consumer data, including transaction-level data from NFT-supported purchases and biometric data from VR headsets and wearables, are captured, encoded, and stored concurrently [1]. While we can harness such data collection to tailor content and improve user experiences, it also carries inherent privacy risks [114]. In addition, the Metaverse lacks a centralised governing force to establish user privacy rights. Therefore, future research should explore consumer sentiments towards data collection in the Metaverse and its privacy implications.
What will be the Metaverse’s effect on equity and inclusion?
The Metaverse’s impact on equity and inclusion is a crucial consideration, as it may aggravate or mitigate societal challenges related to discrimination and marginalisation. Although avatars provide anonymity, users’ real voices can still expose them to discrimination based on vocal traits [1].
“With the proposal of the metaverse, which would require specific hardware as well as stable and high-speed connectivity, it is conceivable that this will cause even more issues for access for those who are currently excluded.” Dr. Linda Kaye, a cyberpsychology specialist at Edge Hill University [115]
Many platforms offer limited avatar representation, but some, like Meta, address the inclusion gap with highly customisable avatar attributes [116]. Investigating how such customisation affects users’ feelings of inclusion and the impact of avatar diversity on the Metaverse is vital. The intergroup contact hypothesis [117] suggests positive attitudes and stereotype reduction may result from diverse interactions. Therefore, it is crucial to explore how this applies to the Metaverse.
The Metaverse’s implications for differently abled individuals should also be considered. For some, the sensory-rich nature of the Metaverse may be overwhelming. However, real-time tools recognising and labelling emotional expressions could assist those who struggle with interpreting social cues [118]. Additionally, research into virtual mobility can provide insight into accessible alternatives for physical activities and opportunities in the Metaverse [119].
Lastly, the high costs of Metaversal technologies may exacerbate disparities in access based on socioeconomic circumstances, further widening the “digital divide” [115]. Therefore, future research should examine how the Metaverse could focus on bridging rather than widening these disparities, aiming to create a more inclusive and equitable virtual environment.
So as we can see, despite numerous remaining questions and research directions, one thing is certain. The Metaverse could fundamentally transform consumer research and consumer behaviour.
Conclusion
In conclusion, the Metaverse presents a unique opportunity to redefine consumer behaviour, challenging concepts of authenticity, identity, and digital ownership. Its transformative implications for consumer research and practice, the potential to deliver value and enhance well-being, and the exploration of consumer consciousness and sensory acceptance are crucial to understanding the impact on consumer decision-making processes. However, challenges remain in ensuring seamless and inclusive delivery across demographics, ethical use of data, and balancing rewarding consumer experiences with fairness and objectivity.
The Metaverse revolutionises customer experiences across industries, enhancing interactivity, personalisation, and adventure in company-customer interactions. Examples of innovative product discovery, the fusion of physical and virtual experiences, and the use of digital humans demonstrate the potential for transforming consumer experiences. Nevertheless, businesses entering the Metaverse must address the challenges and embrace strategies with proven effectiveness.
The Metaverse raises numerous questions about consumer experience, cognition, shopping habits, interaction, well-being, and equity. Key motivations for users entering the Metaverse include sociality, escapism, and entertainment, with individual differences and demographic factors playing a significant role in engagement. The Metaverse’s potential impact on consumer memory, learning, information processing, and mindset adoption calls for further investigation into optimal conditions for memory enhancement and ethical design principles.
The Metaverse could revolutionise shopping experiences, marketing communications, and branding, with potential implications for omnichannel strategies and advertising. Interaction within the Metaverse relies on subtle cues, and its influence on social cohesion remains uncertain. User well-being is critical, potentially impacting social health, self-esteem, addiction, and privacy.
Lastly, the Metaverse could either aggravate or mitigate societal challenges related to discrimination and marginalisation. Examining its implications for differently-abled individuals and the potential widening of the digital divide due to the high cost of Metaversal technologies is essential to create a more inclusive and equitable virtual environment.
Summary:
- Avatars, often idealised versions of users’ offline selves, allow for self-enhancement and bidirectional influence between online and offline identities. The Metaverse challenges concepts of authenticity and identity, potentially redefining consumer behaviour.
- Social influence in the Metaverse, including social distance, impression management, and word-of-mouth dynamics, differs from traditional online settings due to its immersive nature and real-time interactions. The role of social artificial intelligence (AI) as avatars may lead to greater engagement and altered consumer influence.
- The Metaverse redefines digital ownership and consumer behaviour by using cryptocurrencies, blockchains, and non-fungible tokens (NFTs), with potential implications on pain of payment, mental accounting, and the intertemporal nature of coin values. NFTs in the Metaverse also certify digital goods ownership, enabling impression management, identity signalling, and conspicuous consumption while potentially raising privacy concerns due to the permanence of information.
- The Metaverse has transformative implications for consumer research and practice, offering new levels of interaction and opportunities for marketing. It generates vast volumes of customer data, providing valuable insights into consumer behaviour, enhancing concept testing and product development, and enabling novel market research approaches.
- The Metaverse can facilitate flow experiences, and it is vital to understand how these could affect user behaviours. Moreover, this should be examined in the context of touchpoints between companies and customers.
- The Metaverse has the potential to deliver value and enhance well-being, but challenges remain in ensuring seamless and inclusive delivery across demographics. Inclusion is a key value, making resources and services accessible and providing immersive experiences for both utilitarian and hedonic consumption. Ethical use of data is crucial in creating value and promoting well-being.
- Exploring consumer consciousness and sensory acceptance in the Metaverse is essential for understanding decision-making processes. Marketers should optimise sensory inputs, examine the effect of inconsistent attention, and investigate branding and advertising’s role in sensory marketing efforts.
- Exploring the experiential continuum, including augmented reality, virtual reality, and neuro-enhanced reality (NeR), is crucial for understanding the impact on the consumer journey. Striving for a balance that makes rewarding consumer experiences and furthers the buyer journey fairly and objectively is vital.
- There are eight consumer outcomes related to purchase intention: attitudes toward technology, brand attitude, endowment effect, enjoyment experience, product attitude, trust, user satisfaction, and utilitarian value of the product.
- To promote purchase in virtual commerce, application design should focus on improving factors such as ease of use, usability, virtual agents, spatial presence, experienced realism, user engagement, telepresence, and trusting belief predictability.
- The practical implementation of these concepts includes three steps: business objectives identification, design requirements analysis, and design pattern determination. By following these steps, tech teams can develop application prototypes using effective design patterns, ensuring a cost-effective and efficient approach to application design that aligns with business objectives.
- The Metaverse presents a unique opportunity to revolutionise customer experiences (CX) across industries by enhancing interactivity, personalisation, and adventure in company-customer interactions. It transforms CX through innovative product discovery and exploration methods, merging physical and virtual product experiences, and rekindling relationships with ‘digital humans’ or AI-powered bots in virtual settings.
- Examples of innovative product discovery include Celebrity Cruises’ virtual cruise ship tours and Fiat’s Metaverse Store for virtual car exploration. The fusion of physical and virtual experiences can be seen in fashion brand Charli Cohen’s limited physical and virtual clothing editions and Coca-Cola’s digital design drops.
- Digital humans, such as South Korean life insurance company Hanwha Life’s virtual financial planner Hannah and e-health platform Aimedis’ AI-powered digital assistant Ava, personalise customer interactions.
- Despite its potential, challenges remain for businesses entering the Metaverse. Companies should perfect the “drop” technique for marketing, engage customers through gaming, and utilise data for deeper insights to optimise CX in the Metaverse.
- The Metaverse raises various questions about consumer experience, cognition, shopping habits, interaction, well-being, and equity. Key motivations for users entering the Metaverse include sociality, escapism, and entertainment. However, individual differences and demographic factors, such as age, play a significant role in engagement.
- The Metaverse could impact consumer memory, learning, information processing, and mindset adoption, requiring further investigation into optimal conditions for memory enhancement and ethical design principles.
- The Metaverse could revolutionise shopping experiences, marketing communications, and branding, with potential implications for omnichannel strategies and advertising.
- Interaction within the Metaverse relies on subtle cues, and its influence on social cohesion remains uncertain.
- User well-being is also a critical consideration, potentially impacting social health, self-esteem, addiction, and privacy.
- The Metaverse could either aggravate or mitigate societal challenges related to discrimination and marginalisation.
- The Metaverse’s implications for differently-abled individuals and the potential widening of the digital divide due to the high cost of Metaversal technologies should be examined to create a more inclusive and equitable virtual environment.
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