SUMMARY
Retailers are quickly learning how to approach Web3 to win new business. While some have bought virtual land in Sandbox or Decentraland, a few others have started issuing NFTs to connect with brand evangelists
The global Web3 retail market is expected to reach $81.5 Bn in 2030, registering a CAGR of 43.7%, according to Emergen Research
The data Web3 generates is said to be qualitatively superior because consumers have to opt in before any data is shared
Noise, a home-grown wearable personal accessories manufacturer, is a known direct-to-consumer (D2C) brand on Flipkart and Amazon. Its cofounder and CEO Gaurav Khatri surely knows a thing or two about consumer engagement.
He says, “New-age consumers are constantly seeking an innovative and personalised experience, looking at brands to bridge the physical-virtual divide and upend the traditional idea of a store.”
Next-generation internet or Web3 does exactly that — bridge this gap and remodel the concept of conventional stores.
However, the significance of Web3 in retail is much more because it can be the next growth engine for ecommerce, D2Cs and online retailers.
Akash Gehani, cofounder & COO, Instamojo, said most ecommerce platforms follow an operational model, which relies on centralised financial institutions or payment gateways for operations such as transactions.
“All crucial information, including transactional data, can be directly saved into a blockchain in a Web3-based ecommerce system,” he noted.
Highlighting that Web3 will open a fully interoperable digital marketplace where anyone and everyone will be allowed to engage actively, Gehani said with Web3, retail businesses are poised to become a lot more profitable.
Web3 Is The Next Growth Wave For Retailers
Web3 reconceptualises retailing with an ultra-personalised shopping experience. Shoppers get an immersive experience, thanks to augmented reality (AR) and virtual reality (VR).
“Imagine being able to virtually try on clothes or test out furniture in your own home before making a purchase. Wear that watch to see if the dial fits into your wrist or if the strap colour looks good on you,” says Ravi Chamria, the CEO and cofounder of Zeeve, a blockchain infra-automation platform.
Further, AI and machine learning have personalised product recommendations based on individual preferences. Personalised product recommendations help retailers to provide the right products, thereby boosting sales.
Retailers are quickly learning how to approach Web3 users and win their business. They are now aware of Web3 users’ willingness to pay for various goods by looking at their digital footprints.
“Retailers can also divide up their customer base into several groups and, in some cases, even specify a specific pricing for one customer,” says Vidhu Nautiyal, the cofounder and chief revenue officer of CloudConnect Communications, a virtual network operator.
Meanwhile, Chamria is bullish about the potential Web3 version holds to drive the next growth wave for ecommerce. This is because the global Web3 retail market is expected to reach $81.5 Bn in 2030, registering a CAGR of 43.7%, according to Emergen Research, a research and consulting organisation that focuses on the upcoming emerging industries.
Web3 is all about decentralisation. It is about sharing data across a network of computers. In other words, users are in control of data, unlike third-party servers and databases.
The data Web3 generates is said to be qualitatively superior because consumers have to opt-in before any data is shared and hence considered trustworthy.
“The kind of behavioural data brands can collect will be very rich in quality. You will know exactly what your user wants, you can find the perfect customer who is willing to buy your product at your price. It means laser-focused targeting, more optimised customer funnels, driving more sales with fewer dollars spent on ads,” says Chamria.
Web3 To Help D2C Brands Emerge Victorious
A lion’s share of retail business comes from small and medium businesses. But many missed the boat when the ecommerce revolution came along.
Experts believe that D2C brands may well emerge as one of the biggest gainers of Web3 services, which do away with “prohibitively expensive” middlemen/gateway services.
Web3 also allows ecommerce and D2C brands to win their customers in newer ways such as exclusive product launches in Metaverse or exclusive and first access to a new product’s NFT.
According to Nautiyal, it won’t be wrong to state that the possibilities with Web3 for D2C retailers are endless. It enables D2C brands to build stronger brand loyalty.
Emphatically stating that more D2C brands will emerge with the full-fledged arrival of Web3, Chamria said the new version of the internet could mean increased autonomy and unparalleled customer experiences for brands.
It helps do away with the likes of Amazon and Shopify, directly connecting retailers with customers. The new wave will connect sellers directly to buyers, creating more transparent and engaging shopping platforms.
“This will facilitate real-time feedback to retailers, enabling them to execute changes for their future collections and services,” Nautiyal said.
Decentralised marketplaces present another opportunity for small businesses to build their presence online and connect with potential users directly.
“Web3 will help with better competitor analysis, inventory management, supply-chain transparency, and cross-border ecommerce, apart from creating immersive user experiences,” says Chamria
Big or Small, No Brand Will Want To Miss The Web3 Express
At present, Web3 is at a nascent stage. Small businesses, however, know fully well that they need to pull up their socks now to exploit its potential. Khatri of Noise brand is sure Web3 is the next promising wave. He says Web3 transforms how users interact with brands.
Another D2C brand Pilgrim, which is in the business of beauty and personal care, is readying for Web3 retailing. The cofounder & COO of Pilgrim, Gagandeep Makker, sees Web3 as an exciting challenge and opportunity to create unique experiences within the metaverse for next-gen beauty consumers.
Noise recently collaborated with Flipkart to be a part of Flipverse, which enables customers to get closer to their favourite brands in an interactive metaverse.
It has also set up stores virtually to showcase its product lineup, giving users a “captivating” experience of traversing the world in their unique avatars.
On December 2, Flipkart partnered with Ethereum-based blockchain platform Polygon to set up ‘Blockchain-eCommerce Centre of Excellence’ (CoE) to accelerate the adoption of Web3 in India.
Through this partnership, the companies will focus on research and development in the areas of Web3 and Metaverse commerce use cases in the country.
“We are certain that such futuristic steps will add new value to consumers’ purchase journeys and allow them to discover products in a photorealistic virtual destination,” says Khatri
Investing In Web3 To Reap Great Rewards
Retail brands will need to invest in both technology and talent to successfully enter the new retail landscape.
Nautiyal pointed out that for Web3 to function, a variety of ecommerce and tech companies will have to invest in building the necessary infrastructure and experiences. They will require an AI stack, user devices, software and infrastructure.
The performance, scalability, and security requirements of the infrastructure and networks must also be taken into account by organisations creating new technology platforms.
Big brands naturally are leading in the Web3 game. Some have bought virtual land in Sandbox or Decentraland to open virtual stores. A few others have issued NFTs to connect with loyal followers.
The ecommerce space is ever-evolving, and retailers need to constantly reinvent themselves to not be outdone. According to Chamria, retailers can start combining physical and digital products, keeping in mind use cases that stick to the audience. “Every physical item can have a virtual twin that your virtual avatar can use in the metaverse.”
If buying a piece of virtual land and spending thousands of dollars may not be a viable option for all, small steps are definitely possible.
Experts suggest doing this: If your target audience is GenZ or Gen Alpha, it’s more likely they will be the early adopters of Web3. Understand your customers’ changing needs, and see where they are going to buy things. Start building your presence there. It can be a game changer. Start early to evolve with the technology, and when it starts to flourish, you can become a key player.
