Here are the key takeaways from our speakers, Yves le Breton (of Global Client e-commerce of the Inside Ideas Group), Venky Iyer (Vice President of Digital Products and Experience at Beam Suntory), Tyler Moebius (Group CEO and CTO at SmartMedia Technologies), and Kristi VandenBosch (President of OLIVER U.S.).
The e-commerce industry is entering a stage of high growth as web3 emerges into the mainstream.
But while customers, especially in younger age groups, are increasingly concerned about data privacy and anonymity, blockchain technologies and platforms (such as NFTs and the Metaverse) are getting ready to solve that and more. All of this will happen under the guise of web3 – the internet’s next chapter.
In our latest webinar, we heard about the relevance of web3 and blockchain technology to brands looking to future-proof their e-commerce experiences.
From web2 to web3: poised for disruption
Web2 arrived when the tech giants (Google, Facebook, Twitter) built easy-to-use tools for navigating the internet. However, making the internet easier to use came at a cost with the same tech giants centralizing usage; driving most of the online traffic through their own domains, leading to swathes of customer data being collected, traded and sold. Privacy concerns became paramount, and this opened the door for web3.
Web3 is driven by blockchains; secure, decentralized, and anonymous databases built with open-source software. Bitcoin is the most prominent blockchain (with thousands of competing chains, each one offering its own solution), based on its special-purpose chain designed to enable a safer, more private, medium of exchange for users.
VandenBosch argued quite strongly that, in the face of blockchains, customer relationship management (CRM) tools used by marketers today face becoming obsolete. Blockchain acts as a decentralized network, solving deficiencies of current CRM infrastructure by enabling extraordinarily fast cross-platform and cross-brand services that were once impossible. The good news is that, for brands and customers, it means that the relationship can be far more direct and personalized in web3.
TOP TAKEAWAY: Brands need to think about what a decentralized relationship with their customers looks like. Rushing into blockchain is inadvisable (likened to when the app market exploded, and every business suddenly had an app…no matter how un-user-friendly). Instead, brands must consider what problems they need to solve in their e-commerce experiences, and how this technology might be able to strengthen their online relationships with people.
The metaverse: a phenomenon or fluff?
How will your brand market itself in virtual reality (VR)? Brands know that they must begin experimenting with immersive online e-commerce experiences and new digital environments – now known as the metaverse – if they want to stay relevant. But how much of the metaverse is actually viable?
Despite Meta (formerly Facebook) claiming brand ownership over the word ‘metaverse’, there isn’t just one metaverse at play. Roblox, Sandbox, Decentraland, and Fortnite are competing examples of augmented and virtual realities – with Roblox already having 31 million daily active users, its own virtual economy and a solid foundation for future NFT e-commerce.
Similarly, VR will continue to offer brands the chance to reinvent their customer journeys and creative content. (Why recreate a physical retail store when your brand could create far more interactive, experiential journey for customers?)
Understanding which platform or technology to use is the big question for brands. Many large tech giants have invested heavily into the Metaverse and similar concepts, as Apple’s Tim Cook demonstrates with his announcement that Apple will apply AR technology into its devices.
TOP TAKEAWAY: Today, retail brands will need to embrace the opportunity for innovation by combining the best of web2 (e.g., easy-to-use web navigation tools) with the best of web1 (e.g., decentralization and privacy). And that’s that what Web3 wants to achieve: keeping the best and discarding the worst.
Retail brands are well-placed to take advantage by incorporating their own blockchain-based platforms. Quick, direct and personalized customers relations, while also respecting customer privacy.
The real opportunity in web3
How can brands begin to explore the marketing and commercial implications of web3 technologies? And what can brands do beyond just duplicating their existing infrastructure onto newer platforms?
It has been said that non-fungible tokens (NFTs) are a good place for brands to start.
NFTs can now the be used in the same way futures contracts are enacted, but in the form of blockchain-based SMART contracts. The authentication systems that can guarantee ownership even years into the future are valuable for unlocking future revenue for brands. For example, NFTs and other digital tokens now offer shared ownership options in the same way a brand might sell stocks and shares. Rare liquors that need to sit in casks for years are now selling as NFTs so that the owners can collect when the product is ready. Similarly, their customer loyalty potential is prized. Nike’s CrytpoKicks program, for example, allows customers to upload NFTs of their sneakers onto Nike’s own patented blockchain and redeem them.
Similarly, blockchain-based digital wallets now make customer relationship management much more direct and offers greater personalization options.
TOP TAKEAWAY: Now email isn’t the only way to reach your audience on a mass scale and with even more relevant content. Keeping with web3, it mitigates the concerns of customers who are less willing to share their data; third parties can’t simply access the customer’s digital wallet.
- Customers want security and control, but also convenience. Web2 tech brands said “no, that’s impossible – you can’t have all three”. But blockchains, as unalterable, decentralized and anonymous databases, say otherwise. Providence, security and authentication are vital in generating revenue stored within virtual marketplaces.
- Younger generations are very comfortable with virtual marketplaces and tech. Yet, data security and anonymity are increasingly critical to younger customers. Marketers need to examine what a decentralized version of their brand, and their relationship with customers, looks like.
- Web3 and blockchain technology offer customers an alternative to the highly centralized and restrictive policies of today’s tech giants, which is why brands must engage with blockchain technologies to stay relevant.
- NFTs are expected to become a common feature within the next five years as they hold tremendous potential in customer loyalty and lifetime value.
- These are fascinating times for brands willing to experiment and test new ideas, with the potential to take creative campaigns and journeys to all-new heights in 2022/23 with web3.
See OLIVER’s full webinar here