Just a few months ago, hearing the word "Metaverse," may have triggered thoughts about Facebook's facelift or some virtual reality gaming trend. However, early adopters of this new technology are regularly uncovering applications that have big implications for the future of how our society does business. From real estate to retail, digital assets are crossing over with traditional practices with increasing velocity.
The metaverse is not a website visit on a VR headset. It is not difficult to remember when the internet was essentially your computer calling the world wide web on the phone via a dial-up modem. Many of us remember that connecting to the internet actually sounded like something. Yet, where we are now makes that sound seem like ancient history.
Eventually, access to high-speed internet became more common, and everything changed. Businesses were able to offer new services such as video streaming, advanced communication tools, and rapid results to massive database searches. The leap from the internet as we know it to the metaverse is more like going from dial-up to high speed than going from Ask Jeeves to Google.
A “space race” of sorts has broken out as companies compete for the prestige and practical benefits of being among the first to make the Metaverse work for them. Retail giants such as Walmart are entering the metaverse with plans for their own cryptocurrency and NFT collections. Entertainment leaders like Disney have also started preparations by tapping the head of their Consumer Experience and Platforms team to lay the foundation for a presence within this new digital space.
It doesn’t stop there. Many other leaders have started considering the emerging opportunities for their industry in the Metaverse. With users now migrating toward more engagement with the metaverse, the moves by market leaders are making more and more sense. For example, in the four months since public release, Meta’s Horizon Worlds has exploded to 300,000 active users each month. Meta is only one player. Others are also engaging with customers through the digital space.
Projections show the global metaverse market size growing to $678B by 2030. As more companies learn to offer goods and services in or through digital tech, the value of a solid and early presence only goes up.
This brings us to Germain Toyota of Naples. Historically, they have sold vehicles just like most other dealerships: showing customers around the inventory, taking them on test drives, negotiating trade-ins, and filling out paperwork. Although they have 44 years of experience, they are ready, willing, and have a demonstrated ability to adapt to this rapidly changing world of retail consumer experience.
Enter General Manager Brian Kramer. This high energy, highly empathetic troublemaker of a man is an early adapter if there has ever been one. In the late hours of March 18th, 2022, his auto dealership became the first to sell a vehicle through the metaverse. Kramer confidently announced via LinkedIn that clients of Germain Toyota of Naples can now transact in any way they prefer. The dealership will be able to work with customers entirely in-person, completely digital, or a combination of the two for all future auto sales.
The Germain team captured a video showcasing the historic signing. It shows off the fully digital space, tools within the dealership’s corner of the metaverse, and glimpses of the process the customer completed to buy the car. Of course, this was all set to the Beastie Boys track “Intergalactic.”
We sat down with Brian after his team completed the deal to congratulate him and ask about the process of this new transaction option, the challenges he encountered, and his future vision of metaverse retail automotive.
"The greatest challenge is the network transition from 4G to 5G. Internet speed increased 500% between 3G and 4G. To put it in perspective, anyone who still has a traditional "flip-phone" runs on a 3G network, which Verizon recently announced is less than 1% of consumers.
Imagine the difference between the internet capabilities of a Motorola RAZR and a modern smartphone, then take the magnitude of that increase and double it. 5G increases internet speeds by 1,000%+. It eliminates internet lag, latency & unstable connections to a point where future generations will look at our current internet speeds like we look at 64k dial-up modem connections."
"Not being able to slow down is probably the #1 barrier to metaverse transactions and the broader digital retail world. A majority of dealership associates are hard-wired with low patience. It's a trait that we actively look for in our organization. Low patience also means high results. Low patience drives the motor to get things done. The downside of low patience is that those individuals are more likely to give up quickly without immediate results.
The key is to know the difference between being ’in the battle’ & ‘working on the battle plan.’ Those two activities require different mindsets and conduct in different environments. For instance, a Sales Tower is not the ideal location for developing a strategic digital transformation plan. It's more of a battlefield, with plenty of distractions and adrenaline pumping, like a football offensive coordinator up in the box. They're working ON the business rather than IN the business."
"100% end-to-end Digital Retail transactions are only 6% of our current business model. Most of those transactions are from out of our primary market area. Trying to determine what % of transactions should be processed in a certain way will mislead us. The lack of determinability is because 90+% of our clients utilize at least one element of our Digital Retail tool, such as Virtual Appraisals, Virtual Credit Applications, Virtual F&I Interviews, F&I Menu Presentations, etc. We believe the metaverse will mirror those results.
Our team underestimated how vast this new kind of digital world would be. Clients probably will not complete entire transactions in any one format. We want to be able to transact however our clients wish to transact, and we don't want our competitors to offer one of those experiences that we do not.
The challenge for Germain & everyone else will be the speed of the mass adoption of NFTs, CryptoCurrencies, Blockchain, and Decentralized Technology, including DeFi. The growth will be a slow trickle until Blockchain standards are enabled, and then it will be like someone opened a fire hydrant of technological change."
"Crypto and VR intertwine in many ways. I purchased some real estate in Decentraland recently. I completed a LAND smart contract using MANA tokens on the Ethereum blockchain to secure the property. There are many similar examples like SAND for the Sandbox Metaverse, etc.
I think mass adoption of Virtual Reality will accelerate first, and public comfort with both technologies will create mass adoption over the next few years."
"We conducted the transaction with an Oculus 2 VR headset & an Apple MacBook Pro. The digital "plumbing" combined our Upstart Digital Retail tool, our VinSolutions CRM, RouteOne & CDK. Once we correctly integrate the initial plumbing, the metaverse becomes an "irrigation system," which is an extension of that plumbing. A few more sprinkler heads might shoot up in Decentraland, The Sandbox, Horizons Workroom or Republic Realm."
"It's exciting in some ways. As with many pioneering firsts like this, you think you are about to reach the summit. Once you're there, you realize that you've only reached the base camp of a MUCH larger mountain. And climbing the mountain that is the metaverse is bigger than anything we've ever known in our lifetimes. It will be bigger than the internet, as we currently know it."
The transaction is no small step for automotive and certainly a giant leap for Metaverse adoption in the retail world. The adoption of digital assets at national and international levels shows these spaces are ripe with opportunities for anyone willing to adapt their current business for safe and effective use. We appreciate the time and peek into the future Brian gave us.
Companies taking the slow and steady way to a metaverse presence will built-in some staying power. With network providers improving bandwidth by moving to 5G within the next year and consumers engaging with virtual assets and spaces in more significant numbers by the day, companies willing to break into the unknown early and strong are more likely to reap the rewards than those who limp in as underdogs later. As the metaverse continues to take shape, collaborations between companies and industries will become essential in designing unique customer offerings. If Germain Toyota of Naples had stopped evaluating new tools and companies for collaboration after getting their first fax machine, we would not be telling this story today.
Companies are faced with a choice: treat the metaverse as a fad or as the next frontier to be explored. With innovative, troublemaking leaders like Brian Kramer continuing to push past the traditional ‘no trespassing’ signs of retail, there’s no telling where we might find ourselves next – in the metaverse or the real world.
Founded in 1947, Warren Germain, a retired accountant for Henry Ford, opened a Lincoln franchise in Columbus, Ohio. Warren’s son, Bob Germain Sr. worked with his father at Lincoln, and then with his sons to grow the Germain Motor Company to include 16 locations in several markets. In 2011 the Germain Automotive Partnership was formed, and is now owned and operated by Rick Germain. The segment includes six of the original 16 stores, located in Columbus, Ohio and Naples, Florida.
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