How is Web3 Transforming and Disrupting the eCommerce Business Landscape?
Blockchain, cryptocurrency, NFTs, and the metaverse have become the most talked about terms these days. All these terms relate to "Web3," - a concept that is reshaping the eCommerce industry. Web3 is an innovative term and the next big thing amidst the top web development companies as it empowers eCommerce stores with high-end security and improved privacy. Being so important for secure transactions and online shopping experiences, Web3 is gradually becoming an integral part of eCommerce.
Every industry is going through digital transformation, and so is eCommerce. Web3 in eCommerce is likely to lead us to an advanced future wherein we are embracing concepts like decentralization in online transactions and simulating shopping experiences. Web3 is actually taking eCommerce to the next level, gradually leaving behind traditional ways of online shopping and payments. So, how does Web3 practically work, and what does it mean for eCommerce businesses? This article includes everything you need to know about Web3 in general and how it is improving security and customer engagement in online shopping,in particular, leading to accelerated growth in eCommerce businesses. Let's dive into the details.
Web 3.0 Explained
Web 3.0 is the next-generation world wide web that is decentralized, open, and provides immersive user experiences. Basically, web3 applications are built using AI, machine learning & blockchain technology, and the semantic web. Web 3.0 applications are known to be extremely user-centric and smarter as they can decipher the user's intent, learn from experiences and get intelligent with each passing day.
The internet has always been evolving and progressing since its popularity in the 1990s. In its initial days, the internet was used as a repository of information. Still, later on, it became a source of information and a medium to connect, communicate, and share knowledge. The most recent incarnation of the internet is web 3.0, which includes smart apps with intelligent connectivity and immersive experiences. To understand this concept in a better way, let's have a look at our journey from Web 1.0 to Web 3.0.
The Journey from Web 1.0 to Web 3.0
Web 3.0 is considered the next generation of the internet or the future of the world wide web. But, in many respects, web 3.0 is already here in the form of blockchain, NFTs, cryptocurrencies, decentralization, and the metaverse. So, the time is now for eCommerce businesses to embrace this latest trend in web development and ensure that their online stores are competitive enough to engage their audiences and gain maximum conversions. Let's have a look at what impact web 3.0 is having on eCommerce businesses currently and how they can prepare for this futuristic approach.
Impact of Web 3.0 on eCommerce Businesses
We would all agree that eCommerce would have been impossible without the Internet. So, now as the web is transforming to its advanced stage, it encourages eCommerce businesses to represent their online presence in the most progressive manner possible and stay ahead of the curve.
Web 3.0 revolution includes blockchain, cryptocurrencies, NFTs, AI & ML, Metaverse, Dapps, and many other innovations that help eCommerce businesses in improving security, privacy, scalability, and user experiences across their online stores. Let's understand these web 3.0 innovations and their impact on eCommerce businesses in detail.
How Blockchain Impacts eCommerce?
Blockchain is a distributed and shared database that is used to store data in digital form. It is based on a decentralized ecosystem that benefits eCommerce websites in terms of secure databases and payments. When it comes to eCommerce, logistics is one of the most important functions. An eCommerce business requires a flawless supply chain process to be successful in terms of timely delivery and customer satisfaction. Blockchain technology plays a significant role in streamlining logistics processes within an eCommerce business.
How do Cryptocurrencies Impact eCommerce?
The most popular cryptocurrencies people use are Bitcoin, Ethereum, and Ripple. These are digital currencies which are lines of computer code and not issued by any bank or Government. These types of currencies are globally accepted and used by buyers while paying against any product or service purchased digitally.
Accepting cryptocurrencies can become beneficial for eCommerce stores in terms of gaining the trust and confidence of the buyers. As per a recent survey, 44.8% of crypto users say that their company already accepts payment in cryptocurrency.
Moreover, cryptocurrencies have made it easier for online businesses to introduce the concept of "Buy Now Pay Later." As per McKinsey's report, 29% of respondents report that they would have made a smaller purchase or not purchased at all if there was no BNPL (buy now pay later) option given.
Hence, cryptocurrency-accepting eCommerce stores are likely to attract more buyers and experience growth in terms of reputation and revenue generation.
How do NFTs Impact eCommerce?
NFT (non-fungible token) is a term that refers to digital assets which are unique and cannot be replaced by any other asset. Some examples of NFTs include paintings, statues, photos, videos, music, poetries, or anything that is originally created from scratch.
Basically, NFTs are exclusive digital assets mostly relying on the Ethereum blockchain. eCommerce stores earn a fortune by selling NFTs as they hold a significant emotional value for the buyers. Moreover, the online store that provides early access to NFTs for sale is likely to generate buzz and increase its number of customers. For the same reason, eCommerce brands that sell NFTs are likely to improve their brand loyalty and create a sense of exclusivity among their engaged customers.
As per a recent report, NFT sales in the art segment were valued at 2.57 billion U.S. dollars in 2021, which was a drastic increase from around 20 million U.S. dollars in 2020.
(Source: Statista)
This itself proves that dealing in NFTs is a futuristic approach for eCommerce stores which helps them grow and expand in new ways.
How do AI and Machine Learning Impact eCommerce?
AI and machine learning can integrate attributes like personalization, smart search, voice assistants, instant messaging, and many more into an online store, making it exceptionally user-friendly and intelligent, ultimately resulting in more sales and profit. AI and machine learning also helps eCommerce companies to collect data from competitors and customers, which enables them to make informed and profitable decisions.
Moreover, Chatbots - one of the most popular applications of AI, are becoming increasingly smart and intelligent day by day and also help eCommerce businesses to understand their customers in a better way and serve them flawlessly. Machine learning leverages advanced techniques to identify customers' behavior and tweak their store strategies to attract, engage and retain more visitors.
The key to the prosperity of any online store is to deliver impeccable and personalized experiences. AI and machine learning helps eCommerce businesses do that as these technologies can help in analyzing data and designing product recommendations based on consumers' buying patterns.
How D-Apps Impact eCommerce?
Decentralized apps, also known as dApps, have created a niche for themselves in recent years. One of the most impressive characteristics of dApps is that it connects developers with users directly. It eliminates the requirement for the mediator to code and host the app data.The app data of a decentralized app is stored on different nodes instead of a single server.
Currently, the eCommerce industry is too competitive. A single flaw can drive your customer to another store and make them not turn back to you. Whether it is product delivery or payment process, you need to ensure that your eCommerce store delivers the best customer experiences. This is where D-apps come into the picture. Unlike traditional apps, D-apps don't depend on third-party APIs like banks for collecting payments. A decentralized eCommerce app can make transaction processes quicker compared to traditional eCommerce apps.
Moreover, privacy and security are two concerns that decentralized apps address when it comes to collecting payments on eCommerce stores. Customers don't prefer sharing their confidential information with anyone else except the store they are purchasing from. Traditional apps are more vulnerable to data thefts and frauds compared to decentralized apps and thus are preferable for eCommerce stores and their critical transactions.
How is Metaverse Reshaping eCommerce?
Metaverse in eCommerce has the power of creating virtual worlds through AR/VR and 3D technologies for the users providing them with immersive experiences so that they can make the right purchase decisions. Right now, eCommerce is at a very early stage in adopting the metaverse, but there is mass adoption expected in the very near future. Metaverse is likely to change the way people shop online entirely.
Shopping from brick-and-mortar stores allows customers to touch, feel, and try the products before purchasing. eCommerce stores fail to provide that touch-and-feel experience to their customers. But, as the metaverse now allows customers to gain immersive experiences digitally, this drawback of online shopping is taken care of to a great extent.
For example, Amazon's latest AR shopping tool, known as "Room Decorator," allows customers to use their mobile devices and view the furniture and other room decor suiting their space. It facilitates viewing multiple products together and even saves AR snapshots from being viewed later. This is an advanced step towards providing immersive experiences to customers and helping them purchase products or services online with confidence.
The use of metaverse in eCommerce is likely to grow as it helps eCommerce companies to establish their brand identity in a unique manner. The future of eCommerce is metaverse, and the companies embracing this concept are certain to build stronger relationships with their customers and take their business to the next level.
In 2022 Web3 became enormously popular among web developers. Web development companies are gradually moving towards specializing in building eCommerce stores with Web3 capabilities and integrating its elements into different content management systems.As preparing for a decentralized future has become integral for eCommerce companies, it has become significant to know which popular content management systems can integrate Web3 elements and convert a traditional online store into a modern online store that can provide unique shopping experiences.
Which Popular CMS Can Integrate with Web3?
Web3 is compatible with almost all popular content management systems like WordPress, Joomla, Laravel, Shopify, and more. It works flawlessly and helps in taking user experiences to the next level. So, whether your online store is built using Joomla Virtuemart or WooCommerce you can always include Web3 elements in your eCommerce platform and achieve your predetermined business goals.
Here, you can go through top Joomla development companies and top WordPress development companies and select the one based on the CMS your eCommerce store is built on. Whether you need to integrate a blockchain payment gateway with Virtuemart or require unlocking new possibilities with your WooCommerce store, these companies can be at your perusal.
How Can eCommerce Brands Capitalize on Web3?
To appeal to a wider audience and maintain relevance over a longer period, eCommerce brands are now embracing web3 technologies and investing in this new digital transformation. Web3 offers incredible customization options which differentiate omnichannel eCommerce businesses from mediocre retailers. So, how are eCommerce brands unlocking this power of Web3? Let's have a look at some surefire ways of capitalizing on web3.
Sell Non-Fungible Tokens (NFTs)
eCommerce stores can now sell NFTs, which include unique items like paintings, sculptures, patents, products used by famous celebrities, and many more, which cannot be replicated easily and grab audiences' attention. Selling NFTs can be considered the USP of eCommerce stores and help them stay ahead of the competition.
Create Metaverse Shopping Experience
Successful eCommerce brands can use metaverse to provide immersive shopping experiences to their buyers and generate more revenue.
(Source: The Annual Holiday Shopping Survey 2022)
Use Artificial Intelligence
Whether it is about recognizing voices and images, analyzing data, or communicating with customers, AI definitely stays ahead of humans in terms of speed and accuracy. AI is never on holiday breaks, needs sleep, or stays distracted. The chances of human errors reduce when AI components are used in an eCommerce store. This is where AI becomes significant when it comes to managing eCommerce stores successfully.
Accept Cryptocurrencies
As per a recent report, currently, there are 420 million crypto users around the world, out of which 45 million are Americans. Cryptocurrencies don't have transaction fees and foreign exchange charges. Hence, dealing in cryptocurrencies proves to be beneficial for eCommerce businesses. Renowned online retailers like Microsoft, Tesla, Whole Foods, and Home Depot are already accepting cryptocurrencies within their eCommerce stores.
Implement a Decentralized Data Environment
Privacy and security of the data is the major concern for every eCommerce business globally. The data breach is a challenge in the eCommerce sector which is pushing these types of businesses towards blockchain technology. A decentralized blockchain-based eCommerce platform can ensure high-level security of the users' information and build their trust and loyalty towards the online business.
Hence, Web3 use cases are expanding and providing many benefits to eCommerce businesses. Let's have a look at these benefits in detail.
Improves Security
Decentralized data improves the security of data which helps eCommerce businesses to prevent data breaches and fraud transactions.
Reduces Shipping Costs
AI can generate insights that can help online stores to find the reasons why shipping costs are high and rectify those issues to reduce them.
Ensures Transparency
AI and blockchain technology allows businesses to have more transparency in decision-making processes and financial transactions.
Enables Decentralized Finance
Web3 provides the ability to conduct transactions without intermediaries, and that helps businesses to conduct quick and secure transactions.
Fosters Personalization
eCommerce platforms that use web3 innovations are likely to deliver personalized recommendations and gain more conversions.
Enhances Shopping Experience
Metaverse promotes deeper engagement, and blockchain ensures the security and privacy of transactions resulting in better user experiences.
Knowing so many benefits of Web3, it is evident that investing in it is beneficial to eCommerce businesses which can be proven by the below-mentioned facts.
- The worldwide market for Web3 is likely to grow from around $12.5 billion by 2028, rising at a growth of 38.2% CAGR during the forecast period.
- Web3 has a lot of growth potential and hence being its early adopter, can help eCommerce businesses to set new benchmarks.
- Web3 is more secure and can implement accurate practices which empower eCommerce businesses to provide the best customer experiences.
The Future of eCommerce is Web3
Web3 will reinvent the way eCommerce businesses work these days. With the help of Web3 technologies, eCommerce companies will be able to achieve a certain highest level of customer engagement and experiences, which could be just imagined a few years back. Web3 will drive some changes like enhanced personalization and reduced errors and friction, which may seem to be invisible and subtle for eCommerce businesses but would have a significant impact on their revenue generation and profitability.
Web3 is going to be a dominant strategy for eCommerce businesses in the very near future. So, if you are planning to indulge in online business, make sure that your online store integrates Web3 technologies in your online store to provide the best customer experiences and gain more business.
Also, you can go through this list of the best eCommerce development companies and choose the one that helps you explore the possibilities of Web3 and embrace the future of the online shopping industry.