In Part 1 of Exploring the Metaverse in Relation to Hospitality & Food Service, we reviewed the metaverse, the virtual reality space where users can interact with others in a computer-generated environment.
Users can socialize, work, play, shop, and yes, even go to restaurants.
We considered the dining habits of multigenerational consumers and highlighted ways industry innovators are entering the metaverse space. By offering virtual experiences brands can connect with customers, ultimately leading to opportunities to expand a brand’s footprint, awareness, and revenue in real life.
In Part 2, we will continue to explore state-of-the-art technologies, including Web3, cryptocurrencies, and NFTs. Consumers are steadily adapting to these innovations as brands rapidly try to adopt the latest, cutting-edge tools in order to meet users where they are, albeit virtually. Companies that decide to embrace the future and play in this new space are likely in for a big win, but for the few determined to sit this one out, it could be game over.
Web3
The World Wide Web has gone through three revolutions since its inception- Web 1.0, Web 2.0, and Web 3.0 aka Web3. Web 1.0 started from the need for people to access and share information via different computers. With Web 2.0, the aim was to create content and bring social networking to the web. And now Web3’s purpose is to encompass the decentralized applications that run on blockchain, cryptocurrency, and non-fungible tokens (NFTs).
Regardless of the Web’s iteration, people care less about how the tech works and more about what that tech can do for them.
Take Devour for example. Devour is accelerating restaurants’ ability to benefit from crypto and NFTs by focusing the web3 community’s engagement and purchasing power on restaurants using a web3 food ordering marketplace. Chad Horn the Co-Founder and COO believes most people will never really learn the meaning of the term web3. They won’t have to. It and the other buzzwords will fade away to be replaced by more consumer-friendly labels. The underlying web3 technology and principles, however, will thrive, creating for all of us a new way to relate to our online identities, our content, and each other. Chad adds,
“Most of the groundbreaking tech I’ve seen is either making it easier for builders in web3 to create or easier for web3 fans to participate. This is a necessary precursor to web3 technologies becoming easy enough for mainstream audiences to adopt them, or, even better, the web3 technologies becoming invisible leaving only the improved user experience.”
As an example of user-friendly technologies and improved experience, Horn mentions marketplaces that are focused on creating easier, better, and more enjoyable ways for users and fans to collect NFTs.
NFT
The non-fungible token (NFT), which was first created in 2014, is a uniquely identifiable digital file that represents real-world objects such as art, music, photos, and videos. NFTs can be created by anyone and are transferable by the owner via trade or sale, and that ownership is recorded on the blockchain.
Savvy restaurateurs are now serving up NFTs and consumers have lined up for them. These NFTs can function as ‘memberships’ that allow holders access to special perks, offers, and experiences, consequently creating a sense of exclusivity and a FOMO for consumers. And, judging by the current landscape, they aren’t going away anytime soon.
When Pizza Hut offered the World’s first NFT pizza, the question swirling around it was, “Will anyone actually buy it?” Not only did it sell, but it also sold out. The non-fungible tokens market is growing at a CAGR (compound annual growth rate) of 35.27% and is expected to register an incremental growth of $147.24 billion between 2021 and 2026. In addition to restaurant NFTs, we are now seeing NFT restaurants such as Flyfish Club, which has been dubbed the “first-ever NFT restaurant.” According to the company’s website, customers will need to purchase a membership using cryptocurrency “to gain access to the restaurant and various culinary, cultural, and social experiences” with the cost ranging from 2.5 – 4.25 Ethereum (cryptocurrency) equivalent to about $8,400 – $14,300, depending on the daily market and exchange rates.
The NFT restaurant list has continued to grow since and now includes the iconic Manhattan steakhouse and the Brooklyn Chop House, which recently opened its second location in Times Square, featuring a special dining room that only NFT members can access.
Barry Herbst, the Senior Vice President, Strategic Partnerships & Growth at The Elliot Group is a subject matter expert in the space. He says,
“NFTs allow for restaurants to enter the multi-billion-dollar Web3 industry, alongside other industries including luxury fashion, retail, sports and entertainment. This elevates each restaurant group’s core brand, and product offering from solely food and beverage to now include a digital token that, if done right, will provide intrinsic experiential value for the customer, in ways that include loyalty offerings, members’ only events, members’ only menus, the possibilities are endless.”
Customers are not the only ones to benefit from this new form of currency. The restaurant brands win, too: they’re now able to earn extra sources of revenue via relationship-building utility (NFTs). In addition, operators are able to learn more about their customer and form closer relationships with their coveted guests.
Cryptocurrency
Cryptocurrency aka crypto or crypto-currency is any form of currency that exists digitally or virtually and uses cryptography to allow people to transact freely, securely, and nearly instantaneously between peers. Cryptocurrencies, such as Bitcoin and Ethereum, do not have a central issuing or traditional regulating authority, and instead use a decentralized platform for recording transactions and issuing new units. Because cryptocurrencies cannot be printed or seized, they may also provide a safe store of value. Additionally, cryptocurrencies have been viewed as a ‘transformative technology’ that could revolutionize many industries including hospitality and food service.
The global cryptocurrency market is projected to grow to $1,902.5 million in 2028 at a CAGR of 11.1% in 2021-2028.
Chad Horn also believes in adoption of cryptocurrency for operators and customers. “Restaurants need to consider both cryptocurrency and NFTs because each represents something vital to their business: transactions and community, respectively. Eventually, not accepting crypto would be as ludicrous as not accepting credit cards today. Similarly, not having a plan around NFTs (digital communities) would be as silly as ignoring the local youth sports teams, chamber of commerce, and other community groups.”
Lots of questions still surround the metaverse and all the technologies that accompany it. We’re still exploring how Web3 changes the internet and wondering if cryptocurrency is going to continue to grow in acceptance and popularity. If it becomes regulated, it may lead to massive adoption and force the industry to follow suit.
Stay tuned.
What are your thoughts? We’d love to hear from you.
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