Decades ago, the idea of the internet just like the possibility of me getting in shape, sounded far-fetched but here we are today in a world that is almost digital and I got abs.
Today, everything that goes on in our lives is online including bonding with family and friends, sharing our joy and sad moments to millions of unknown people on social media, education and of course, building and running a host of businesses with just a website.
The first version of the internet, web1 brought the read only web;
Web2 which brought about social media and modern search engines brought the read and write web.
Now, we are on web3, the read, write, own and interact web and the benefits for businesses look promising.
If you own a business or know someone who knows someone who knows someone who owns a business, this article is written for you to have a foothold on what web3 is and the possible ways it could benefit your business.
What is Web3?
Web3 is the next generation of the web built on decentralization and blockchain technology where applications and websites are able to process information in a much smarter way and users are able to interact and engage with these technologies. It is the read, write and participate web.
Web3 is an umbrella term for a host of many decentralized applications.
The term "Web3" was coined by Polkadot founder and Ethereum co-founder Gavin Wood in 2014, referring to a "decentralized digital ecosystem based on blockchain."
What are the benefits of web3 for business owners?
Web3 encompasses a wide range of cutting-edge technologies, each with its own unique potential. These technologies include cryptocurrencies, NFTs, the metaverse, blockchain databases, and more. Embracing one or more of these innovations offers various advantages, driving the utilization and reaping benefits like:
Crypto For Digital Payments
In a world built on land and economical borders, cryptocurrency offers you a borderless system of payment that is secure, fast, cheap and does not rely on centralized third party bodies like a bank.
Many businesses and users of their products or services are choosing crypto today because it offers a large level of flexibility that traditional financial systems can't offer.
Statistically, more than 85% of US business owners view enabling crypto payments as a high priority.
Business owners who accepted crypto payments saw an average ROI of 327% and an increase of up to 40% of new customers and;
Customers who use crypto spend about $250 more per transaction on average than what the average customer spends which means they tend to buy more products.
In Africa, some central banks have restricted international payments using bank debit cards like in the case of Nigeria. Many businesses and their customers have turned to using crypto as an alternative solution. It is estimated that about 10.3% of Nigeria's population use crypto today, which is about 22 million people. That's the population of Cuba (around 11.3 million)
New Zealand (around 5.1 million)
Ireland (around 4.9 million) and
Norway (around 5.4 million) put together.
Nigeria has the largest crypto user percentage in Africa and the 8th largest in the world and it is viewed as the crypto hub of Africa.
The use of crypto for digital payments has greatly encouraged participation in international e-commerce due to its speed, ability to be borderless and its high level of security. This means more customers for business owners accepting cryptocurrencies and more markets to sell.
NFTs To Enhance Customer Engagement, ownership and Value
A hunch isn't just enough to push anyone to spend money on anything. Whatever you're choosing to buy or service you're choosing to use must have been engaging and showed value when they were trying to convince through advertising.
NFTs offer a new style of marketing to businesses like creating a limited digital collectible of a product to show exquisity, rarity and luxury to increase its value exponentially. In terms of engagement, some brands promise exclusive access to some of their contents and events to promote a sense of an exclusive engaging community built on value.
Top examples of brands already using this strategy include Gucci, Louis Vuitton, Christiana, Dior, and Nike.
Dior recently announced that, holders of the digital twin collectible that came with its 470 limited edition B33 sneakers will also receive an early exclusive access option to purchase an exclusive drop from Kim Jones’ Dior Men’s spring ’24 collection
Louis Vuitton also announced that 100 odd purchasers of its genesis $41,600 Treasure Trunk NFT received a limited edition Louis Vuitton trunk, to date, subsequent perks have involved just an option to purchase a limited edition “bitcoin orange” Speedy 40 bag by creative director Pharrell Williams. This comes with a price tag of around $9,000.
Owners of Gucci Material NFTs now have the opportunity to trade these tokens for either a Gucci bifold wallet or a co-branded duffle bag by Gucci and 10KTF. This unveiling comes after much speculation about the intended use of the 2,896 NFTs that were created in March.
The brand owned by Kering, initiated a redemption feature in partnership with the platform 10KTF.shop. One Gucci Vault Material NFT permits the exchange for the wallet, whereas three tokens are needed for the duffle bag.
The creative team composed a playful description for the duffle, labeling it as "baggage you'll actually want to carry," and presented the wallet as one that doesn't necessitate a seed phrase.
A quick comparison reveals that the duffle bag might be the more appealing option for Gucci enthusiasts and collectors. A similar-looking wallet on Gucci's official e-commerce site costs $460, while a comparable version of the bag—minus the 10KTF logo—sells for $1790.
On Opensea, the Material NFT is valued at 0.22ETH, approximately $412. Since the bag also bears the 10KFT co-branding, it possesses a sense of exclusivity that money can't easily acquire.
The Gucci Vault Material NFT was a prize for taking part in a 10KTF mission within Battle Town. To qualify, participants needed a Gucci Grail NFT, which entitled them to receive the NFT as an airdrop.
Matt Maher, the founder of technology consultancy M7 Innovations, revealed, "Simply possessing a Gucci Grail NFT wasn't enough for a reward; active engagement was key." Maher, who recently redeemed his token for the Gucci wallet, believes that this "play-to-earn" or "engage-to-earn" approach will become more common in the future.
Maher also pointed out that this strategy is clever as it bridges the gap between digital and physical realms, rewarding holders with tangible products. He stated, "For devoted Gucci patrons, it adds another luxurious item to their collection, one that was essentially complimentary." Additionally, he mentioned, "For Web3 enthusiasts, it serves as a 'trial product' to introduce them to the realm of Gucci and attract them to the brand."
"Offering rewards to a community is always a positive move," Maher continued. "Even during a sluggish NFT market, holders might debate the worth or usefulness of a reward, but it remains a reward."
Luxury brands have various ways of rewarding token holders within their Web3 fidelity programs, each with its own strategic differences.
Blockchain For Supply Chain Management and Product Cataloguing
By properly managing your supply chain, you can cut excess costs and deliver products to the consumer faster and more efficiently. Now, the question is how does blockchain affect this.
Supply chain management is the management of the flow of products and services and includes all steps that transform raw materials into finished products. A good supply chain management system, has to be capable of meeting the efficiency, transparency, authenticity, accuracy, flexibility, security and cost-effectiveness a business supply chain needs to excel.
The use of blockchain in this process is being implemented by some companies and it's still undergoing further testing.
However, some companies already implementing blockchain have had some substantial progress and by them, blockchain technology serving as a decentralized and secure digital ledger that records and authenticates transactions at various stages of a supply chain has greater benefits than traditional supply chain management systems.
With blockchain technology in place, every participant of the supply chain has access to a public ledger containing all records of processes from when the raw material was sourced to when the finished product gets to the final consumer. This encourages transparency, traceability and improved trust in the supply train.
Every partaker has signs or approves a transaction before it is added to the block which can also increase transparency.
Another great benefit in terms of cost of operation is that since blockchain is a decentralized ledger, there is no need for any special server of any kind. A smart contract on a reliable blockchain will suffice for the entire operation that is if you are not choosing to build your own blockchain.
Utilizing The Metaverse to Improve Marketing and Customer Engagement
Marketing is one of the most important aspect of business. It deals with how you present your finished or semi-finished products to your customers and getting this part wrong can terribly impact your business.
In web3, we are familiar with social media ads, videos or pictures trying to sell a product or service. We have the opportunity to read and write on these content but now with Web3, we can read, write and interact with the content and this is possible through the metaverse.
The metaverse is an immersive virtual world built on AR, VR, and MR technology that grants you the ability to interact with the digital world. AR and VR technology are not new to many, although some haven't had the experience using them.
However, a simple example is; searching for an animal, say a Golden Retriever on Google and you'll find the option to view it in a 3D space. This 3D space can take you to an augmented reality setting.
Many brands especially in the fashion industry are utilizing the metaverse in their marketing strategies as some advanced designs lets you interact with their content in a unique way like being able to wear these virtual products.
One of the famous brands using this technology is Gucci.
Gucci, one of the most popular names in luxury fashion began their investment in the Metaverse in May 2021 when they opened Gucci Garden on Roblox to celebrate their 100th anniversary. During this event, users could purchase NFT collectibles. Later that year, they sold their Dionysus bag for 350,000 Roblux, equivalent to $4,115.
Gucci also invested in the Sandbox to expand its Gucci Vault, an online store. This virtual store will give shoppers a more immersive experience where they can virtually try on the products to see how they fit before purchase.
Gucci is just one out of the many brands in the Metaverse. There is Nike, Louis Vuitton, Lamborghini, and so on.
The metaverse is a new step further to creating marketing strategies for brands that are more focused on the consumers and their choice.
Conclusion
We are rapidly moving into a new technological age, one fueled by decentralization and Web3 is the term that binds all the technologies together. More applications and benefits will continue to be developed to inch us a little closer to fully transition into a decentralized world wide web.
