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In 1968 SF writer Frederik Pohl wrote that a real science fiction story predicts not just the car, but the traffic jam. We need to concentrate not just on the technology, but everything else that changes as a result. So, how will Web3 and its underlying technologies change what brands do?
There are three major impacts, says Ana:
- virtual products
- hybrid products
- distributed ownership.
These are things like NFTs, Fortnight skins and Roblox avatars. Brands have full control of them. There was a metaverse fashion week, with Gucci and Ralph Lauren participating — with full control over their digital products, in a way that’s not possible with physical ones.
Yes, there are downsides right now, including a lack of interoperability for digital goods. Something in Roblox stays within Roblox.
However, you can create digital products cheaper than physical ones, and then harvest data. It’s a cheap and effective way of determining customer preference. For example, you can create virtual sneakers, see which are more popular, and manufacture these. This has the potential to reduce over-production, boosting sustainability.
You can connect physical products with a digital element, connected via smart contracts on the blockchain, and then additional benefits can come with ownership in a controlled, traceable way. This can extend to events. If you were there, and there’s a blockchain record of that, you get rewards. If you buy a bag, you get a NFT of it. Starbucks is connecting its loyalty scheme with NFTs.
Verifiable ownership is something that’s hard to do now, but is much, much easier to do with Web3 tech. This opens up secondary marketplaces for luxury brands. If each Chanel bag has a unique NFT associated with it that tracks all previous ownerships, that deals with counterfeiting.
Currently, one person owns one item. Now, imagine that a group of friends owns a bag or a watch in a group, with hat ownership traceable via the blockchain. Whoever paid the most gets to wear it the most. You can sell your share, or the group can sell the assets, and all benefit.
Imagine owning a fraction of a cultural asset – a historic artefact – and benefiting from the sale of it, based on your fractional ownership. How about pooled shopping carts, between communities? You aggregate buying power to drive down price. This could change the relationship between supply and demand.
When consumption goes from single to group-based, it extends and expands the life of luxury brands. But how about this extending to companies? Can a brand have multiple owners, with each owner having a voice in its running proportional to the value of their token in the company. Friends With Benefits is an early example of this.
So, how do you get your company into this? Do you have the right talent to move beyond the PR value of an NFT drop? Do you have an organisation that reflects these new technologies? They change your entire value chain, so you need to change to match that. If every action is recorded on the blockchain, you need a new type of customer service to monitor that.
In 2012, the British cycling team was barely winning any medals. So, their head decided to change everything involved, from the bikes to the beds the athletes slept in, by just 1%. And then they own 9 gold medals and more. This was an aggregation of marginal benefits. You don’t need to transform your business overnight, but if you make everything 1% better with Web3, things could be very different…
Ana is a brand executive, author of “The Business of Aspiration” and was listed one of “The World’s Most Influential CMOs” by Forbes. She specialises in building brand-driven modern businesses.