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"I believe this is where the internet is heading and it's where commerce is heading."
— Justin King, Chief Evangelist, Salsify
When you hear the terms cryptocurrency, blockchain, Web3, and non-fungible tokens (NFTs), they may almost sound like words from a foreign language. But these phrases could actually reshape the future of ecommerce.
"In 1997, ecommerce was nothing. Now, it's a lot. Right? If it was 2007 all over again — and you know what you know today about social media — how would that change your career or brand?” says Justin King, ecommerce author and chief evangelist at Salsify.
“My guess is it would change a lot. I believe that this is the equivalent to that — that the next major technology shift is going to be to decentralization, to NFTs and to blockchain. I think it's important we all understand what that means and all the implications that's going to have for all our careers, our brands — and, of course, ecommerce."
Cryptocurrency, Blockchain, Web3, and NFTs offer new ways for customers to connect, interact, and transact with each other digitally — and could also have significant implications for how customers will engage with brands.
King joined a recent episode of the "Unpacking the Digital Shelf" podcast, "Crypto, Web3, Blockchain, NFTs: A Primer for Brands," to outline the impact of these technologies on brands today (and tomorrow).
King shares his quick crash course into this brave new world.
King’s fascination with Web3 and other new technologies emerged out of a mix of sheer curiosity and pure professional necessity.
He started digging in to learn more about these technologies and joined a group of brand managers, agencies, and consultants who were all exploring how Web3 impacts brands and commerce. The group was originally 30 people but has since grown to thousands of members.
King says what he discovered in his research and exploration wasn’t just a technology trend but insights into where ecommerce and the internet were headed.
To understand how these trends will shape the future of ecommerce, you have to start by understanding Web3, also known as Web 3.0.
For several years, centralization has been a hallmark of the internet. Large corporations “became the centralized distributors of capital, technology, media content, and even social capital on the internet,” King says.
Look no further than Facebook, Amazon, Apple, Netflix, and Google for proof of this concept.
“They centralize the internet, and anytime centralization happens, most of the time control comes with it,” King says.
But where Web 2.0 focused on centralization, Web3 is all about decentralization and consumers being able to control what they create.
Blockchain technology is essential to how Web3 functions.
Centralized ledgers like customer relationship management systems (CRMs), enterprise resource planning systems (ERPs), and other platforms have dominated Web 2.0, but as the world and the internet advances to Web3, decentralized ledgers likely will reign.
“Blockchain is a decentralized ledger, meaning no one person controls it. It's also immutable. It's another big word used in Web 3.0,” King says. “Immutable just means it can't be changed. Blockchain is unique in that it can only be added to. It can never be updated, modified, or deleted, so it creates a true chain of events of what has happened inside of the blockchain.”
Bitcoin is a prime example of the power of blockchain technology. It’s completely decentralized, which makes it nearly impossible to hack. You can easily prove who owns each Bitcoin and where they own it, and you can’t alter or delete this information because it runs on thousands of computers.
This means no one has complete control over this asset.
“That makes Web 3.0 decentralization so powerful because no one organization owns it,” King says.
NFTs are another emerging technology that will change the future of ecommerce.
“NFTs are an exciting area for brands, and maybe not for the reason everybody might think,” King says.
You may have heard of NFTs in the context of art. Headlines abound of art collectors spending thousands or millions of dollars to purchase an NFT of punk art, says Artnet, or Lebron James’ two-handed reverse windmill slam dunk on NBA Top Shot.
All of this begs the question of why anyone would spend this amount of money on a digital asset and whether these assets are actually worth anything.
King says the answer is a resounding yes. What makes NFTs so powerful is that they are non-fungible, or have a unique identity and unique metadata.
“A token represents ownership on the blockchain. A token says, ‘This person owns this token. This token represents ownership of this thing.’ And because that's put on the blockchain, nobody can change it and nobody can delete it,” King says.
Let’s break down what the rise of these technologies means for brands.
NFTs may have gained popularity in the art world, but it — and other emerging technologies like blockchain — will have a significant impact on the future of ecommerce.
NFTs represent ownership, which also represents access. Brands can use this fact to their advantage, King says.
“If I own this NFT, I might get access to something. I might get access into a community. Brands should start thinking about, ‘Okay, if a customer of ours owns an NFT, they might get access to a customer community or a community dedicated to customers,’” King says. “Why would someone want to do that? Well, they love your brand. They want to identify with your brand. They want to have this identity in a community — a digital community — so they'll purchase that NFT to be a part of this new community.”
A wallet, which represents a consumer’s place on the blockchain, will also affect ecommerce in the future.
“What's cool about this is we have the removal of cookies everywhere. As cookies are being removed, wallets are starting to replace that. Wallets are actually starting to replace logins — so, no more user names, no more passwords — you just connect your wallet. My wallet contains tokens that identify myself to you,” King says.
For brands, wallets have several potential use cases. Consumers can go to a brand’s website and connect their wallet, which serves as a proxy for their identity. The website can then scan their wallet for an NFT and verify ownership of a particular asset (like a car) or grant that user access to a private community.
“Once they recognize the NFT, that's unique to my VIN number. It says, ‘Hey, here's all the parts for your car. Here's all the service recommendations and all of the warranties for your car,’" Justin says.
The streetwear clothing brand, The Hundreds, provides a good example of how these technologies can drive exclusive access and thriving customer communities.
The brand created 25,000 unique NFTs based on a drawing of its logo and launched a private community where customers had to purchase one of its NFTs to receive access.
Customers in the community, which has grown exponentially, get special perks like access to early clothing drops and exclusive in-person and online events. The brand also has benefited from this exchange.
The Hundreds works almost exclusively with this customer community when it develops new products. It gets feedback from the community, and when the company actually brings new products to market, it sends the products to this customer community first.
“[The Hundreds] have gone above and beyond, so much so, in fact, that the value of the NFT or the value of owning access into this community has risen significantly and has gone through the roof,” King says.
“Download a wallet — download MetaMask, which is a wallet, and there are other ones like HashPack, for another blockchain. Download those wallets and just see what the process is. You don't have to spend any money. Just see what the process is of logging into OpenSeas [an online NFT marketplace].”
— Justin King, Chief Evangelist, Salsify
Though these technologies may seem trendy, they’re likely here to stay, so brands must embrace them. King says brands can begin to incorporate NFTs, in particular, by just experimenting with the technology in low-risk ways.
King says it’s also a good idea for brands to gauge their customers’ interest in and use of NFTs and see whether there’s an opportunity to build a community using this technology.
“You could start just with a small group of customers and see how they interact. There are easy ways of getting into that and there are great tools out there to be able to do it well,” he says.
Starting small and building from there can help brands integrate NFTs, blockchain, digital wallets, and other emerging technologies into how they interact with and engage customers. As King argues, it would be unfortunate for brands to look back years from now and realize they didn’t capitalize on this opportunity to innovate their business.
“I believe this is where the internet is heading and it's where commerce is heading,” King says.
For more details on how NFTs, blockchain, and other technologies can drive your ecommerce transformation, check out the rest of this episode of "Unpacking the Digital Shelf.”
