Five Things to Keep in Mind as Web3 Approaches for E-Commerce Brands

Every day, we read articles or listen to podcasts about Web3, the next stage of the Internet. The next generation of social networking and e-commerce is not all that Web3 is. Many believe it will restructure important facets of society and have a significant clash on how we live our lives.

Web3 is a revolution because of this. Some claim that a revolution is on the horizon, but as with all revolutions, we don’t identify them as such until they’ve already started. Web3 is an example of this.

Crypto, blockchains, and NFTs are the rallying cries of the Web3 revolution, and they have already left their impact on the world. We will have to change to the new world order whether we like it or not.

NFTs, for instance, could be perplexing to some people. Why would someone spend $3000 on a JPEG of a bomb or over $350k on a Bored Ape? Simply put, NFTs are far more than JPEGs or small pieces of digital art. They are versatile tools with a non-fungible underlying technology, which means they leave an unchangeable digital trail on a blockchain.

Undoubtedly, a lot of investors appreciate NFTs for their artistic features, and they particularly admire the fact that there is only one of them, much like the Mona Lisa. But provenance is not a problem with this work, unlike any other work by a great master. The blockchain demonstrates an NFT’s uniqueness and ownership.

Some investors plan to resell their NFTs at a profit when the value of NFTs rises in the future. As we’ll see below, this could have fascinating implications for E-commerce firms who choose to issue their own NFTs.

Additionally, some investors enjoy the status that comes with owning an NFT, and the world offers them chances to flaunt their influence. People who choose to upgrade to Twitter Blue, for instance, can attach their NFTs to their profile pictures. Or, showing off a garment that’s only accessible if you own, say, an Adam Bomb NFT lets people in on the secret that you’re a member.

You might not think much of that cache, but if you’re working to establish your DTC company, you should be aware that it could lead to new commercial chances for your company.

5 Things Every E-Commerce Brand Should Take into Account as It Enters the New Web World3

#1: NFT’s Will Rethink Loyalty

When consumers spend their hard-earned money on a retail membership, a curious thing happens: they are motivated to make the most of it. Nothing fosters loyalty like a sizable price. Because 105 million individuals are willing to pay up to $120 for a 12-month membership at Costco, the market has already demonstrated that people are willing to pay for the chance to purchase goods.

The plastic cards that consumers carry in their physical wallets are being replaced by the NFT for numerous brands. Additionally, they are providing NRF owners with additional benefits, such as ownership of real property, access to extremely limited goods, and investment opportunities.

Because NFTs are based on smart contracts, their owners won’t ever have to be concerned about their own position in the event that a brand merges with another business or is bought out by a larger or foreign brand. Non-fungible items that are stored on open blockchains don’t fall through the gaps. Because of this, an NFT is far more valuable than a membership like Costco.

Even while only the early adopters are currently aware of the benefits implicit in this, there are still opportunities for early movers to profit from arbitrage.

#2: Web Identity Redefinition

NFTs will reimagine identification on the Web and increase security as a result. Imagine a scenario in which you could make a purchase on an e-commerce platform without ever inputting your credit card information by using the NFT in your wallet to reveal a component of your identity.

“NFT-secured virtual selves may, in many ways, end up being more secure than real-world identities. Passwords, biometric data, and passports can all be stolen. The Financial Times claims that identity protected by the blockchain is more difficult to forge and steal. By establishing and safeguarding each unique digital identity, NFTs may have the potential to enable humankind’s smooth “commute” between physical and virtual worlds as well as from one metaverse to another.

#3: Immutability Has a Wide Range of Effects for E-Commerce

It’s quite simple to purchase cryptocurrency. Customers can purchase it using PayPal, Venmo, a mobile app for a digital wallet, or even a Bitcoin ATM. But let’s not become fixated on cryptocurrency as money. Cryptography is unique in that it makes the blockchain functional, preserving the immutability of the underlying ledger.

For retail, immutability will have new connotations and applications. For instance, a lot of customers have expressed their appreciation for sustainability while also being suspicious of firms that claim to have “gone green” when they haven’t. Does this producer actually utilize non-toxic dyes?

Consumers that care about a variety of issues, from sustainably sourced raw materials to manufacturers that provide living wages and benefits to their employees, would identify with supply chain management as a blockchain use case.

These firms will have unquestionable evidence they can share with customers thanks to authentic blockchain stamps, which are likely to become standard practice in the future. It is the reason VeChain and other firms that offer supply chain blockchains exist. VeChain collaborates with large companies like Walmart.

#4: Contextual Personalization Will Replace Lookalike Personalization

With its recommendations system, which almost every web3 shopping website development site today has Amazon revolutionized the Web1 world. It’s probable that NFTs will elevate recommendations to a whole new level. Smart contracts are capable of storing a vast amount of data and using bots and underlying algorithms to influence the holder’s future purchases. This creates the conditions for the advent of a new era of personalization based on contextual context as opposed to lookalike modeling.

It’s intriguing to note that intelligence resides with the NFT rather than the consumer, who just so happens to be the current owner of it. All the knowledge that underlies the recommendations you saw and followed—the years’ worth of insights the algorithms have gathered—is given to me if you sell me your NFT. I don’t need to start out by training the algorithms from scratch.

Let’s assume that the NFT you sold me was for a brokerage account that you utilized to create your portfolio. Am I pleased to learn from your purchasing choices? Of course, I am! The company that produced the NFT is also.

#5: Allow hitherto excluded groups to spend money online.

More people will be able to make online purchases thanks to cryptocurrency, many of them for the first time. Additionally, it may significantly raise their purchasing power.

Credit cards and bank accounts are not available to everyone. Around 1.4 million Americans, or 6% of the adult population, are “unbanked.” These are persons who use check cashing businesses or the USPS Postal Savings Systems for all their banking requirements because they lack the necessary identification or funds to open a checking account or apply for a credit card. The unbanked simply do not have access to online shopping, which is sometimes the cheapest alternative.

However, the unbanked can increasingly buy cryptocurrency through a variety of channels, including a digital wallet they download to their phones and use to make purchases from any supported online merchant. Cryptocurrency does away with the necessity for a credit card, which for the unbanked, might be a game-changer.

One of the main reasons El Salvador passed its Bitcoin law, which proclaims that Bitcoin will be treated as equal to the status of the US dollar and become legal tender of the nation, was to eliminate the friction caused by credit cards and bank accounts.

But not only the unbanked may expand their online shopping thanks to cryptocurrency. Many people are stockpiling cryptocurrency in their digital wallets, and now that their investments have increased in value by two or three times, they feel much richer. They can now afford luxury products more easily, and they’re more likely to splurge on them even if they’re only paying one-third of the price.

Follow the latest trends.

There are other technologies besides Bitcoin and Ethereum; new entrants like Solana and Cardano are joining the market, creating new opportunities.

Even if you’re not quite ready to join in, it’s still worthwhile to stay on top of the trends (although if you do, you will benefit from a rare arbitrage opportunity).