Foresight 24: IRL benefits for brands playing in the “metaverse” space + Web2.5 vs Web3
A newsletter diving into the concepts, people and brands shaping the future of retail, entertainment and connectivity.
Welcome back to Foresight!
I love the idea of focusing on the real-world, tangible benefits that are beginning to formulate for brands participating in Web3. A few more apparent benefits are highlighted in the story below, like opportunities to be more helpful to consumers, increasing customer loyalty and building brand recognition, so I’ve outlined the less obvious benefits in today’s edition.
In the spirit of being realistic, a piece from Vogue Business speaks about the increasing comfortability of the term Web2.5 vs Web3 among brands and developers. Said to be a “more realistic stepping stone as brands develop their strategies” - this sounds right on.
Questions or comments? Reply to this email—let’s chat!
IDEAS, INSIGHTS & FORWARD-THINKING PERSPECTIVES
Web3 benefits IRL brands might not be thinking of
With the future of the “metaverse” still uncertain, it’s important to focus on the real-world benefits that are becoming clear for brands venturing into the space. Technically speaking, every brand is using a platform that is exploring Web3 with Meta, Snap and others adding immersive capabilities, but it’s the brands on the cutting edge that are set up for the biggest gains. Outlined below are a few “real-world metaverse benefits” for brands looking to participate.
Improved access to physical goods
Consumer studies have shown that the more expensive a product is, the further someone will travel to see the product IRL. This poses a real challenge from brands with a limited retail footprint. Through virtual try-on, augmented reality and 3D experiences, consumers everywhere can experience products without having to travel to physical store locations.
Hyper-personalization without data
With data in the “metaverse” stored on the blockchain, marketers no longer have to depend on third-party data or encounter privacy regulations to deliver hyper-personalization. Using the right technology, brands can reevaluate data collection and track customer activity in real-time, making responding to individual users much more viable.
Fostering communities around digital goods
It’s very possible that a brand’s best-selling products could be virtual in the future. Luxury and consumer brands are already seeing millions in revenue from virtual fashion and NFT projects, allowing consumers to access products not available anywhere else. Experts suggest virtual products will surpass the cost of physical goods in the future due to the exclusivity factor and bragging rights on Web3 platforms.
Is the term Web2.5 more realistic?
Described as the reality of a transition period, Web2.5 is being coined as a new term and solution among executives who are constantly under pressure to move from Web2 to Web3. Linking Web3 assets like NFTs to physical products is a prime example of Web2.5, as well as companies like Coinbase, a cryptocurrency exchange that allows people to acquire Web3 assets with Web2 systems such as credit cards. “Web2.5 is a step on the way to Web3.”
With IRL brands developing NFTs and retailers accepting cryptocurrency payments, “a blend of centralization and decentralization is what we will be seeing for a while,” says Nelly Mensah, LVMH VP of digital innovation. At the same time, it’s important to remember how valuable Web2 has been for audience growth and retention. Brands that have active communities on Twitter, for example, can’t abandon the ways they currently engage and interact with customers. This is an opportunity to engage with existing audiences in a new way. The idea of Web2.5 also acts as a stepping stone for consumers to become familiar and more comfortable with Web3 platforms and features, allowing them to ease into it. All of this while the current pain points around Web3 adoption (decentralization, intellectual property issues and poor user experience) are also likely to ease through this transition period.
Although it’s unlikely the term Web2.5 will catch on enough to replace Web3 and “metaverse” in headlines, the current state of the crypto market creates the perfect opportunity for brands to develop and test strategies. Amanda Cassatt, co-founder and CEO of Serotonin, a digital marketing agency that helps brands develop metaverse and Web3 strategies says, “It’s a progression. Having this term allows us to point out examples of where brands actually are.”
WHAT I’M READING
How Farfetch is predicting the future of fashion in Web3
Google’s new visual search tool plays to fashion crowd
Gucci taps Miley Cyrus avatar for Roblox fragrance
NFTs are coming to Instagram, bringing Web3 fashion closer to the mainstream
Tiffany is turning Cryptopunks into pendants with NFTiff
Pinterest debuts a new app, Shuffles, for collage-making and moodboards