From E-commerce to Web3 Shopping: Why It’s the Future for Retail Brands
E-Commerce has transformed the way retail brands approached their sales since the brick and mortar days. In this Internet age, the majority of businesses establish an online presence, using e-commerce platforms for sales and social media for marketing of their products. As Web3 technology like blockchain, cryptocurrency, non-fungible tokens (NFTs) and decentralized finance (DeFi) gain attention, we see it becoming the future for retailers.
The global retail ecommerce sales will surpass $5 trillion for the first time in 2022, and total spending will exceed $7 trillion by 2025. [source]
However, the growth rate is slowing. Retail customers looking for more ownership, community and convenience, they are looking for brands they can trust. Blockchain technology can bring that to them, and the Web3 retail experience might become mainstream sooner than you think.
For many retailers, the growth of e-commerce expanded their brands’ reach and positively impacted their product sales. Historically, retailers who have been slow to embrace the online culture are the ones struggling to keep up.
86% of executives believe blockchain will be adopted mainstream and will transform their business. While 77% of executives fear losing their competitive edge if they don't adopt blockchain. [source]
In the same way that e-commerce changed retail, Web3 is set to rewrite the way brands do e-commerce. The possibilities of Web3 are exciting – it brings data privacy, and security to consumers, and new avenues for retailers.
Web3, with its nature being decentralized, transparent and trustless, will enhance the customer shopping experience. It allows brands to:
Empower consumers with more data privacy and ownership via an opt-in system
Build brand value with more personalized shopping experiences
Integrate smart contracts-based payments, providing secure financial transactions and reducing product returns, chargeback fees, and credit card fraud
The modern consumer is looking for a brand whose ideals and direction they support, and are far more invested in community than simply just buying a product. Brands will need to build communities around their products and reward them for their support. Web3 will help them:
Foster brand recognition and build a community
Build brand loyalty by allowing exclusive or limited ownership of products and services
Reward customer loyalty with NFT-based tokens, which can increase in value, traded, sold, and are more valuable than traditional loyalty points
Engage and connect directly with consumers, cutting out middlemen and fees
Web3 offers new ways of monetization and diversifying their offerings via the introduction of digital products and services. With Web3, brands can:
Sell virtual products in the metaverse
Some brands are already creating accessories and limited and seasonal costumes for avatars to wear in the metaverse, with branded collaborations in games like Roblox. Ralph Lauren reported that its collaboration with Roblox and Zepeto games helped its digital business jump 40% during its third quarter.
Launch exclusive NFTs to boost sales and traffic
Monetize digital or social content for brand supporters who might not want or afford a physical product
Reach out to a new consumer base of crypto owners
Fast fashion brands like SHEIN have long been embroiled in controversy, whose lack of transparency, unethical reputation of blatant rip-offs from designers, and dodgy supply chain origins led to a huge boycott around the world.
Consumer value alignment is essential in the way it will propel e-commerce into Web3. For example, 68% of consumers believe that a company’s behavior is just as important as its products and services. [source]
The modern consumers want a brand they can trust, and the basis of Web3 is built to be transparent. Supply chain tracking has been one of the biggest uses in blockchain technology. With this, retailers can:
Increase traceability of material supply chain, lower losses from counterfeits, improve visibility and compliance over outsourced contract manufacturing
Offer its customers greater transparency of its product sourcing, and potentially enhance its position in ethical and responsible manufacturing.
Passwords are a major source of on-boarding and conversion funnel friction. For users new or interested in the Web3 space, dealing with different types of crypto wallets, fiat to crypto conversions, buying NFTs, and remembering not just passwords but 24-word seed phrases, this quickly becomes a stumbling block to mainstream adoption.
Across the web, people are intrigued and interested in the idea of Web3, but these challenges to adoption are making retail brands resistant to implementing new technology, in fears that their average consumer might not be receptive. New technologies need to be understood, and their impact on current business models assessed.
Introducing Web3 to existing retail customers does not need to be difficult.
The answer lies in a truly seamless and intuitive user experience (UX). And for that to happen requires a reliable technology infrastructure that’s easy to integrate, build, and scale current platforms. As technical barriers decrease, more retailers will recognize and utilize the benefits of Web3, and more users will be willing to participate in Web3 as the future of a holistic shopping experience.
Read Developer's Guide: Build an E-commerce Store with Magic, Next, Strapi, and Stripe
Magic Connect is a one-stop shop designed to create a secure and seamless user experience in Web3. It integrates a Single Sign-On (SSO) and passwordless authentication, with simple onboarding and wallet creation and management with unified UX, integration of fiat-to-crypto on-ramp and off-ramp payment methods. Magic Connect is set to bridge the gap between Web2 and Web3, allowing business owners, retailers, and more to step into the Web3 space with ease. Find Out More