In Web 1.0, the internet was the most important change since the printing press. Suddenly, anyone with an internet connection could put up their own static website.
Web 2.0 brought more complex platforms into the mix. Consumers could share online reviews and shopping links on social media, and they could even make their own online stores.
Now there is Web 3.0, the next generation built on cryptocurrencies, blockchain technology, and spreading power.
How much more decentralized can the world of ecommerce get with Web 3.0? Let’s put it this way: the customer is king or queen these days.
But how will this change things in the real world? Here are some ways we think Web 3.0 will change the way ecommerce works.
Web 3.0, also called “Web 3,” is the next generation of technology for the internet. It includes using cryptocurrencies and blockchain technology, moving power away from platforms, and making security, privacy, and scalability better.
Most of the time, Web3 is made up of three parts or innovations
Blockchain: Blockchain is a public ledger that doesn’t have a central point of control. It creates proof of ownership without giving up user privacy. Before blockchain, we used centralized database ledgers to keep track of who owned what. Blockchain uses “chunks” of information linked in a chain to prove ownership without a central database.
Cryptocurrencies: “Crypto,” as it’s often called, uses the blockchain to store digital money. This makes ownership of money less centralized and makes online transactions and purchases more secure.
NFTs: Non-fungible tokens are like digital “receipts” on the blockchain. They are used to keep track of who owns digital assets.
If you look at each of these technologies on its own, it’s not immediately clear how they will change ecommerce and digital retail. But Web3’s effect on how people buy things online could have a long-term effect on how retailers interact with customers online.
Web3 has more than one innovation that will change everything, just like every other generation of the web. Let’s look at how the latest innovations could change the world of ecommerce in big ways:
How the blockchain will change online shopping
In the world of ecommerce logistics, blockchain technology has a lot of effects. If centralized ledgers go away, there will be no need for expensive third parties to act as middlemen.
What is the main effect of e-commerce? Cost, especially for businesses that need to ship a lot of different things.
DHL’s report, Blockchain in Logistics, says that logistics is what keeps the modern world going. DHL says that about 90% of the world’s trade is done by international shipping every year. “One estimate from the World Economic Forum says that removing trade barriers in the supply chain could boost global GDP by nearly 5% and global trade by 15%.”
How do these benefits help ecommerce companies in real life? Take the wine business, PWC says. Product tracing through the blockchain makes it possible to find out who made a bad bottle of wine if a customer ever gets one.
In short, blockchain technology makes logistics safer and more accountable. PWC says that there are cost savings because there are fewer tasks that are done twice along the supply chain.
When you accept cryptocurrencies, new customers may be more likely to buy from your online store. One study found that 40% of people who buy with cryptocurrency do so for the first time. This shows up in the average order value, which shows that people who buy with cryptocurrency tend to buy twice as much as people who use credit cards.
It’s not a surprise since users tend to adopt cryptocurrencies quickly. About 25% of people say that once they start using cryptocurrency, they will buy something within seven days.
In other words, new users are very confident in the security of cryptocurrencies and how they work. When online shops and stores start accepting crypto payments, these early adopters are likely to buy more from them.
Also, cryptocurrencies make it easier to add features like “buy now, pay later.” Digital wallets can also make it easier for buyers to make larger purchases by reducing the amount of hassle involved. McKinsey says that most of the people who use digital wallets have already put more than one card in them.
As people’s trust in these technologies grows, they are more willing to pay for bigger purchases with crypto-based financing. This means that ecommerce companies can offer more Web3-based features that make people feel comfortable spending more. “Of the people who used BNPL,” writes McKinsey, “29% said that if they hadn’t had this financing option, they would have bought less or not at all.”
Cryptocurrency and “purchase now, pay later” (BNPL) financing show that these topics have become more popular among Americans.
dApps are apps that don’t have a central server. You could call them Apps 3.0. People can download apps without a “middleman” platform using blockchain technology and peer-to-peer networks.
You may already know what a good idea it is to make your own app. But dApps offer web3 shopping website development some specific benefits:
Decentralization makes security better, which helps build trust when you use an app to sell expensive items.
Faster payment processing. For example, if you pay for a big purchase with cryptocurrency, you might not need to wait for the bank to clear the transaction.
More money from consumers. In other words, the people who use the dApp get to decide how it changes over time.
dApps are helping to make e-commerce less centralized, which brings the benefits of Web3 to your mobile sales. Inc. says that the self-executing code of dApps will also help ecommerce stores in many ways, such as by reducing “product returns, chargeback fees, and credit card fraud.”
Web3 is giving more power to the people who use its services. But there’s no reason why ecommerce brands can’t keep finding new ways to find out what their customers like to buy.
AI is the key to getting the most out of what you learn.
AI can find patterns in your ecommerce data to help you come up with new marketing campaigns. At the same time, it can give you information that helps improve conversions.
This means that you can use your own first-party data about customers to find out more about them. AI can also use web analytics and surveys, among other things, to find information that your team might have missed.
Harvard Business Review says that AI is already making a difference. It can give you ideas for improving product features or help you figure out how to run your business more efficiently. The result is a store with new ideas for bringing in new products in the future and letting workers spend less time on tasks that can be done by machines.
Bots are also getting better at what they do. They can filter product sizes and consumer preferences and even sync community recommendations to act as a sort of “personal shopper” for customers.
In other words, AI and machine learning are making it easier for store-friendly Web3 bots to act as concierges, which makes it easier for small shops to offer their services on a larger scale.
Web3 will have a big effect on how ecommerce will work in the future. But let’s get more specific about what these effects will look like and how they’ll affect selling things online:
When a brand is decentralized, consumers may feel like they “own” a piece of it because of dApps and NFTs. Forbes says, “The value of an NFT isn’t just in the asset; it’s also in what the buyer gets from the asset, and that’s where you can start to build brand loyalty.”
Forbes uses Bored Ape Yacht Club and its NFT-gated, exclusive communities as an example. In the future, retailers can do well by giving loyal customers digital ownership through customer avatars and tokengated commerce.
If Web3 makes things less centralized, businesses that can build personal relationships with customers will do well. Forbes thinks that CPG companies are “now realising” that investing in direct-to-consumer (DTC) models helps them build direct relationships with customers and “stay relevant.”
Customers clearly like talking to brands in different ways. Omnichannel marketing makes it easier to keep customers, and the rate of keeping customers is 90% higher than with single-channel marketing.
But personalization may be what consumers think of when they think of Web3. When improved AI is compared to customer avatars, it will make it easier for consumers to get what they want. With Web3, people will be able to get better personalization at a large scale.
This, too, could make people stay for a long time. In the end, people like brands that “know” them. Lori Stout, the Vice President of Marketing at Punchh/PAR Technology, said:
“As the web becomes less centralized, gatekeepers will no longer be able to control what marketers can do. Tim Vanderhook, who works for Viant, told Women’s Wear Daily that people will instead invite advertisers in.
In other words, Web3 won’t feel as much like advertising and will be more like working as a team. Vanderhook thinks that new ways to reach customers, like streaming audio and in-game ads, will become more important in the future than they were in Web 2.0.
We’ve already talked about the top B2B trends to keep an eye on. But perhaps the most important thing is how B2B ecommerce is slowly becoming more like B2C.
With Shopify Plus, for example, you can use traditional B2B strategies (like custom pricing options) along with more traditional B2C features (like personalizing buying experiences). As Web3 makes people’s interactions with brands less centralized, the lines between business-to-business and business-to-consumer purchases will continue to blur.
With the COVID-19 pandemic, shipping, logistics, and the supply chain all came to the fore. PWC says that blockchain technology will be innovative because it will make the supply chain clear and could lower the cost of logistics.
IBM and Walmart, for example, are already using the blockchain to track their supply chains. IBM’s Food Trust uses a shared record of the food system to make the supply chain clear. Walmart can tell exactly how fresh food is for customers because of this openness.
As people get used to NFT and crypto-based rewards, their expectations may keep going up. Many games already offer NFT and crypto rewards as a way to get people to use the platform. Forbes says that UniX is a platform where gamers can earn points toward scholarships just by playing virtual games. As time goes on, more brands that aren’t related to gaming are joining in. For example, Louis Vuitton made a mobile game called “Louis: The Game” that has collectible NFTs as a reason to play. Forbes says that “the new generation of the gaming industry gives players ownership and gives them rewards for the time and effort they put into games.”