How legacy brands should approach Web3 from a retailer turned VC
Walmart announced it would be tokenizing products and services as NFTs. Budweiser changed its name on Twitter to Beer.eth. More and more legacy brands are madly trying to devise a Web3 plan.
A few thoughts on how brands should process Web3 from a retailer turned VC.
The first step should be remembering history.
Safety and reliability were the focus following the Dot-Com bust and in the early days of Web2.0. Customers were legitimately scared to put their credit card number on the web in the olden days (2001–2006.)
I spent hours figuring out where best to place our ‘secure’ [🔐] watermark on our sites.
We constantly debated how often we needed to remind customers that their purchase was ‘safe and secure.’
This essential security is, thankfully, taken for granted today.
Web3 brings a lot of old security concerns back. For example, sophisticated traders have been tricked out of NFTs worth hundreds of thousands of dollars by following bad links. So the first rule of Web 3 for retailers should be “do no harm.”
Brands need to think long and hard about which technologies and communities they’ll partner with.
Web3 is more wild west than the WWW has felt in decades, arguably more than ever given the vast wealth that’s being created — and lost.
The practical approach for legacy brands is to move slowly and find suitable partners.
The risk of technical mishaps is high.
The odds of a cultural faux pas are higher still.
And while crypto may be the future, it’s still “so early.”
Definitely, invest time ⌛️ and energy ⚡️to learn about crypto, but for all the hype surrounding this space, don’t expect it to have material impacts on your business in the short term.
Find a strategy that aligns with your core strengths, don’t just change course based on a PR strategy your creative agency whips up. Authenticity and community cred matter.
If you’re going to play in Web3, you need to learn about the technology and the culture that animates it. This strategy will require a substantial commitment of money, but more importantly, time and ‘school fees’.
While cryptography is purposefully mind-bending 🤯, the cultural component can be the hardest for some to understand. Much in the way startup culture has influenced corporations — think executive hoodies and 2 am emails — Web3 will leave a unique mark.
Early adopters of NFTs often see their purchases skyrocket 🚀in value. However, building brand equity in traditional ways — brilliant ads, exemplary customer service, high-value discounts, etc. — pale in comparison with putting thousands of dollars of crypto in their pockets.
Brands that can reward and engage users for their involvement and creation create a loyalty and community fly-wheel.
However, this is really hard to do. Marketing leaders must add tokenomics, airdrops, and marketplace management to their toolboxes 🧰.
If you don’t know what those words mean, now is the perfect time to learn. (I’m in the process).
Download a few wallets, buy some tokens, maybe even an NFT or two.
These are your school fees for the next 10–15 years.
The urgency of developing a “Web3 Plan” has dissipated with the softening of the crypto markets over the last few months.
But it would have been a mistake to dismiss the internet after the dot-com bust, and those who ignored online missed out.
The fundamental shift in Web3 is moving away from the idea of “users” and towards one of owners or stakeholders.
Mere transactions are giving way to a sense of “belonging.”
Retailers need to think less of coupons and more like Chanel.
Blockchains are complex and amorphous, but when you think of them as the ability for brands to own their content and manage access to it, the possibilities abound and become more apparent.
Brands that can engage with their audiences meaningfully will thrive and build loyal and sustainable communities. Everything can be imitated, except a sense of ownership, which is ultimately the currency💱 of 3.0.
