In the world of web3, the term ‘bridging’ is increasingly being used to connect the world of Brands (retail and web2) with that of web3 via a bridge.
But what exactly does this mean? And what opportunities does it offer for Mass Market Retailers (such as supermarkets in Italy)?
To better understand the significance of what has happened in the last 12 months in the world of web3 (the third iteration of the internet), a simple search on search engines is enough to realize that several large international brands, including the most well-known luxury and fashion brands, have already taken significant steps.
Among the many brands that have approached web3, some have done so in an exploratory way, in order to understand the potential of web3, including interaction modes with consumers, community building and engagement. Some others, very few to be honest, have moved in a thunderous way, allocating investments within the reach of a few.
While some (and very expensive) initiatives may seem experimental in some ways, such as Hugo Boss’s virtual stores where customers can customize their avatars as “digital twins” to wear metadresses (which can be purchased in real life), other brands have made investments that are astonishing in scope and timing, especially in light of such a difficult moment for the global economy.
But what does bridging mean?
If you are familiar with LinkedIn or Twitter, among the other colorful expressions that denote the web3 world, you may have come across the expression LFB (let’s f…ing build); building refers not only to programming in a stressful sense but also to networking, i.e., sharing ideas with other web3 fellows, often pro-bono, perhaps in identity communities such as DAOs (decentralized autonomous organizations).
Bridging comes after building. In this context, bridging is the connection between web2 and web3, aimed at spillover – dumping – of users and consumers from traditional web2 platforms, such as social networks, into immersive environments such as the metaverse, by implementing experimental modes of engagement with shoppers.
An example is NFTs linked to very specific utilities that the consumer can use in a cross-over way, i.e., in different environments (e.g., metaverse-web2-instore).
Any examples?
Starting from the analysis conducted on Dune, where on-chain data from Ethereum were extracted, observing volumes, transactions, metrics related to primary sales and royalties generated on the secondary market of branded NFTs (https://dune.com/kingjames23/nft-project-possible-data-to-use), it can be deduced that activations of new users (or wallets) are rather limited (about 20%) compared to those wallets on which transactions have already been made (i.e., already activated users).
Is the spillover still in its early stages?
Looking at it from this angle, it is more than likely. If you look at it in a more “holistic” way, however, you can understand that a course is being charted.
The three different initiatives, listed below, are just a fraction of what now happens daily but offer a vision of different strategies, all based on bridging.
- Gucci.
The fashion house now accepts cryptocurrency payments in its American stores. While not the first or last player to accept payments in BTC and other cryptocurrencies, a significant portion of the web3 community has positively evaluated the initiative launched by the former Florentine fashion house in the metaverse. Gucci has created Gucci Garden (https://www.gucci.com/us/en/st/stories/article/gucci-gaming-roblox), the first metaverse store celebrating the creativity of the atelier, by partnering with the gaming platform Roblox. - Nike.
Nike reportedly earned over $185 million from NFTs, sparking a debate over the actual figures pertaining to primary sales (i.e., the total purchases of those who bought the NFT during the drop) and royalties from the sale of the same NFTs on the secondary market. Nike has also officially entered the metaverse, doing so with a significant budget. To launch Nikeland, also on Roblox like Gucci, the American brand acquired the design studio RTFKT for $1 billion, closed a partnership with rapper Drake to attract GenZ audiences, and allocated millions for advertising campaigns on Instagram and Facebook. According to Nike’s Chief Metaverse Officer, the results have been excellent: 7 million users in a few months.
Ref: https://www.inputmag.com/style/nike-most-revenue-nft-sales-list - Starbucks.
More recently, you may have heard of Starbuck Odyssey. Simply put, Starbucks rewards consumers who collect points (stamps) in the form of collectible NFTs. The NFTs, in addition to having scores related to their “rarity,” which allows them to be sold on their secondary market, can also entitle their holders to experiences (such as a virtual masterclass on how to make an espresso).
For those interested, I suggest following the weekly podcast of friends Ely Santos and Filippo Chisari on brand news entering web3 (https://www.linkedin.com/events/brandsinweb3-aweeklynewsroundup6977601303510179840/comments/) or reading this blog (https://crowdcreate.us/overview-of-large-companies-jumping-into-web3-nfts/).
With this introduction, what are the opportunities for Mass Retailers?
Not being able to make a distinction by geography here, for the sake of brevity, it is reasonable to believe that the first channel that should accelerate towards the third iteration of the Internet (it should be called web3.0, but web3 is the marketing term coined by a Silicon Valley VC) is e-commerce.
We know that the channel had a strong acceleration due to the effects of the pandemic; nonetheless, even after several months, e-commerce has been adopted almost definitively even by more reluctant generations.
It is plausible that these will be the first touchpoints to be integrated with experiences on web3, going beyond just accepting cryptocurrency in payment gateways (as Moonpay does in the United States), as some airlines already do on in-flight purchases (e.g., Ryanair).
It is also likely that NFTs themselves will ensure convergence between brands (which, as we have seen, are equipping themselves) and Mass Retailers, supporting cross-over initiatives between instore, web2, and web3. Just think of token-gating (https://coinmetro.com/blog/what-is-token-gating/), which is the ability to offer certain NFT holders certain special privileges (% discount, participation in phygital experiences, and much more).
The first immersive shopping malls on the metaverse (Mallconomy, Galaxy Arena, and others) are already emerging, whose virtual venues can host not only virtual stores of brands but also events. Will these be the first players to be acquired by traditional mass retailers? Or will the mass retailers themselves create malls on the metaverse (note: Tesco is already working on something…)?
And how will drive-to-store adapt? Or will it be drive-to-store that will push mass retailers in the direction that consumers will demand in the near future? In Italy, we are lucky to have some of the strongest scaleups in the sector, such as Shopfully, which have allowed us to close the first digital gap between consumers, web2, and instore.
If consumers, as plausible, push for the adoption of cryptocurrency payments and NFTs become more and more linked to the concept of utility, drive-to-store will be the means to bridge the gap.
A final thought.
The “non-lieu” coined by Marc Auge, or the non-place, the physical space in which, due to its transitory nature, the presence of people becomes anonymous (shopping mall by definition), is a concept not applicable in the metaverse. I talked about this in a post here: https://www.linkedin.com/posts/alessandrovene_metaverse-web3-retailers-activity-6980637062148337664-6x-g?utm_source=share&utm_medium=member_desktop
On the one hand, the metaverse suffers from persistence, that is, the duration in which a user stays in space, but brands have launched the challenge to make this virtual space useful, not futile.
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