Navigating the Adoption of Web3 Technologies

Technology is evolving at an astonishing rate in today’s world, creating endless possibilities for businesses to grow and thrive. One of the latest technological advancements that is gaining momentum is the adoption of Web3 technologies, also known as the decentralized web or the new internet.

Web3 is not a buzzword, but rather a technology that possesses strong potential for future business success. In this blog, we will share best practices for adopting Web3 technologies into your business to help you stay ahead within this rapidly growing industry.

Growth and Opportunity

Web3 represents a new way of engaging and transacting on the internet, characterized by decentralization, enhanced security, and greater user control over data. As businesses and consumers become more aware of these benefits, they are demonstrating greater interest in adopting Web3 solutions and technologies.

Adopting Web3 technologies today is similar to the adoption of online sales and digital communications in the 1990s. Those who made the leap into Web2 were able to maintain or even increase profitability, while those that lagged, particularly brick-and-mortar businesses, either struggled to catch up or went out of business entirely.

1.  Learn The Benefits of Web3

According to a recent survey by PwC [1], 59% of CEOs believe that Web3 will have a significant impact on their industry within the next five years. Venture capitalist investments in Web3 exceeded $18 billion in the first half of 2022 [2]. There is value in understanding the benefits and potential of the new internet to develop an effective strategy to incorporate it.

While only outlined here, a deeper dive into how these benefits can help transform your business will help you build confidence that this technology can save you time and money, and/or bring in new customers and new revenue streams. Each department head may see different benefits according to their needs, so focused research is the simplest way to begin.

Marketing departments focus on creating affinity with existing customers, as well as bringing in new customers. Web3 takes digital relationships with customers to a new level by adding trust and transparency. It also allows for more direct-to-consumer marketing, such as personalized offers and strong loyalty programs, which saves in advertising costs all while increasing conversion rates.

Technology departments focus on ensuring that the business is secure and runs efficiently. Web3 helps by reducing or eliminating the need to store and secure personal data, thereby reducing the costs incurred in a breach.

In general, decision makers are interested in profitability, operational efficiencies, and regulatory compliance. For example, Web3’s immutable records and reliable customer data verification reduce the cost and effort of auditing and compliance.

2.  Take Small Steps to Integrate

The adoption of Web3 technologies is not a “rip and replace” strategy—rather, the technology can be utilized to supplement existing programs to capture customers moving toward Web3 adoption, for instance. These are often existing customers who want greater control over their digital identities, want to engage in new ways, and are willing to share specific information with their favorite brands to experience those new interactions.

At Blockchains, Inc., for example, we are developing a variety of APIs that can provide your business with Web3 capabilities, as well as gain insight into Web3 customers to provide more personalized experiences. These APIs provide solutions to use cases such as age verification, vendor credential verification, digital wallet connections, and seamless user logins. The first step to integration usually begins with a use case of a problem that the business needs to solve.

The right technology, integrated slowly, can then expand as new use cases come to light once the business strategy begins to shift toward Web3 solutions. For example, a loyalty program might continue to give discounts or points, but with Web3 technology, new opportunities may arise to provide transferrable digital assets that can be shared to bring in new customers. Adding this capability via an API allows for small steps of integration as needed rather than drastic change all at once.

3.  Build a Skilled Workforce

The integration of Web3 tools does not require the addition of developers if your technology department can install APIs. However, as the trend continues to drive toward Web3, businesses may want to build a workforce that specializes in these technologies to build their own dApps (decentralized apps) and to connect with customers in a more extensive way. A workforce versed in the protocols and standards that make Web3 programs interoperable and secure will ensure that your business meets your customers’ needs.

Hundreds of colleges now offer degrees and certificates specializing in blockchain technology, both for developers and for management, which has resulted in a pool of qualified and eager specialists in the job market. For instance, Blockchains Inc. has an education initiative with a curriculum shared between high schools and community colleges to encourage more students to pursue this line of technology. Hiring a workforce in non-development areas, such as marketing, that is well-versed in the potential of Web3 will also help your business make the successful transition to adoption.

4.  Establish Trust in Reputation

As more customers shift to Web3 identity solutions and work with Web3-ready businesses, those businesses that adopt Web3 will begin to build a reputation of trust and transparency. Web3 data ensures that customers are real, and the transaction history, reviews, ratings, and contributions within a brand’s community are verified and immutable. When customers know the people contributing to a community have transparent reputations, confidence in the brand rises.

In addition, with its inherent interoperability, Web3 allows reputation data from one system to be integrated into another, enhancing the overall reputation of both businesses and their customers. Immutable records provide long-term integrity of reputation scores and history. As an example of this benefit, businesses can choose to work with or provide services to other parties based on their reputation scores.

In the context of trust and reputation, it is important to note that Web3 technology fosters trust between brands and consumers. According to PwC, executives are advised to incorporate “trust by design” as a pivotal element in all their transformation and reinvention strategies [1]. Among global consumers, the primary factor contributing to brand trust is the respectful safeguarding of consumer data, privacy, and security, accounting for a significant 74%, as outlined in a summary by Qualtrics [3]. These three safeguards represent a fundamental advantage inherent to the emerging internet landscape.

5.  Make the Shift Over Time

Adoption of Web3 starts small, but as the customer base grows, the business will shift its focus from Web2 engagement to Web3. Web2 may never go away, but its influence in business will diminish. This shift will enable businesses to see a transitional increase in the benefits that Web3 has to offer.

One such transition leads to a lower cost of security, as usernames, passwords, credit card information, and other personal data will no longer be required for transactions. Another transition will be an improvement in conversion rates when businesses make personalized and strategic offers to individual customers. In the long term, the benefits of Web3 will dominate, demonstrating that the early benefits of Web2 are no longer profitable.

The rate at which technology is adopted has accelerated. Since mobile phones became our prominent tool of choice, adoption of apps for phones can reach 50 million in days. The most noticeable surge in Web3 adoption is expected to occur through decentralized applications (dApps) that incorporate loyalty programs in partnership with brands.

6.  Expand the Strategy

While Web3 gives businesses new ways to operate, it also opens the door to creating new experiences for customers. As businesses integrate Web3 into their existing programs, they will need to consider a long-term strategy to expand both the benefits in infrastructure, savings, and revenue, and the effect this shift has on their growing Web3 customer base.

With technological advances, businesses can create personalized and immersive 3D experiences that reach customers where they are—primarily on their phones. These experiences can range from finding the best view in a venue and choosing seats, to shopping with personalized suggestions. This level of engagement builds brand affinity, makes transactions seamless, and provides real-time insight into customer behavior.

As consumers shift toward Web3 technologies, businesses must be prepared to provide services to them. Meeting your Web3 customers with appropriate tools gives them incentive to stay with, or change to, your business—without giving up your current customer base. And as your customers shift toward Web3 themselves, you’ll be ready. These simple steps for the successful adoption and transition to Web3 can give your business an early start and a competitive advantage.

Sources

[1] PwC: Focused on Reinvention

[2] McKinsey: Web3 Beyond the Hype.

[3] QualtricsXM: What is Brand Trust and Why is it so Important?