Web3 offers incredible opportunities to build brand loyalty, increase revenue, and grow thriving communities.
As brands build their web3 infrastructure, they must decide what and how to incorporate their eCommerce stack for an experience that supports their brand.
They should consider the following:
1. Is it easy to use?
Web3 eCommerce should be so straightforward that someone unfamiliar with it can start immediately. But it should also be well-equipped to utilize all of web3 for those well-versed in the ecosystem.
2. Does it meet web3's needs?
Your eCommerce platform should accept various cryptocurrencies, integrate with decentralized applications, communicate with blockchain technology, and include the necessary components for a full-solution web3 experience.
The luxury experience doesn’t meet customers halfway—it exceeds expectations. A web3 stack should do the same.
3. Is it safe, secure, and reliable?
Web3 eCommerce stacks should comply with eCommerce business laws and expectations (like AML compliance to protect from fraud).
If you choose a platform like Mojito, you get a Merchant of Record that safeguards risks and threats from bad actors.
In this article, we’ll cover the transition to web3, how web3 eCommerce is changing the internet, and how you can get started.
Evolution of web2 to web3 eCommerce
The internet changes so fast that it’s hard to remember what it was like before.
Take web1, for instance.
It started mainly as an information hub through which you could visit a static site. Then, companies introduced online shopping carts, internet directories like Craigslist or Yahoo! Directory, and eventually, the search engines we know today. But everything was controlled by a few companies.
It wasn’t until web2 emerged that everyone could participate in their creations and engagement. In the publishing and writing stage of the internet, users could easily blog or share on social media. They used their online community and growing network to fuel their brand and sell.
All these benefits still lacked a crucial customer need.
Consumers didn’t like how they depended on platforms and often didn’t own what they purchased (like digital products, where they only had a license or a copy). They wanted digital ownership.
The new solution: Web 3.0
Web3 technologies solve many issues and create a decentralized marketplace with alternative payment methods, investment opportunities, security and privacy, and digital ownership.
For the first time, customers don’t need to depend on a few companies or platforms to dictate their commerce experience. They can buy, collect, sell, and build a community on their terms. Additionally, luxury brands could create the high-quality experience they wanted with no limitations.
Transitioning to web3 recognizes the “ownership” stage of eCommerce.
Brands must invest in a web3 eCommerce stack and join up with partners like Mojito to meet these needs, grow their customer base, and build customer loyalty that spreads like wildfire.
It’s a complex journey for brands on their own. They have to consider the infrastructure and all different types of customers on their web3 journey—whether they’re big users or not, everyone is on a path to web3 as the internet evolves.
A brand’s eCommerce solution must facilitate Web 2.0 needs for newcomers and those transitioning but also meet the expectations of a fully adopted web3 user (a “Web 2.5” solution).
How can brands leverage an eCommerce stack for all stages?
It starts with understanding the blockchain factor.
What is web3 eCommerce?
Web1 eCommerce: read stage
Web2 eCommerce: write and publish stage
Web3 eCommerce: ownership stage
Web3 eCommerce is online trade that uses cryptocurrency and the blockchain. It encompasses and facilitates web3 themes like ownership, decentralization, and community.
When someone purchases a product on your marketplace, let’s say an NFT (non-fungible token or unique ownership of a digital asset), your web3 eCommerce stack conducts the sale and records it on the blockchain.
The blockchain is a verified public ledger that shows digital ownership or onchain activity.
For example, if you decide to sell NFT artwork based on a product line you’ve launched, customers can purchase it through an auction on your marketplace.
The transaction is recorded when they buy the NFT, and they have proof of ownership. They can keep or sell it in the future on a secondary market (brands can receive royalties with resales).
Companies can give rewards and exclusive access to events (through “token gating,” a way to prove digital ownership for entry), which can create exciting communities. These loyal customers and members continue to spread the word about the brand, strengthen brand culture, and launch strong momentum for market reach and growth.
Brands can also hold digital events and connect with customers. Or, they can connect digital ownership and eCommerce purchases with real-life events, using the blockchain to verify eligible customers for exclusive access. The potential to build relationships with customers has never been greater.
There are two notable uses of web3 commerce to consider, which we briefly mentioned above:
- NFT & token-gated commerce: when a brand sells non-fungible tokens, usually tied to artwork, digital collectibles, or general proof of purchase when brands use tokens as a ticket to membership for exclusive events, loyalty points, rewards, and buying opportunities
- Redeemable commerce: when customers purchase a token they can redeem for something else, typically a physical product or event ticket
Brands can also use web2 apps like Discord to build communities while connecting them to onchain activities. When someone purchases a token, they can use it to access these gated communities.
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How will web3 change eCommerce?
We are experiencing the web3 adoption curve. And as excitement continues to grow and more people join web3 platforms and experiences, it’s quickly getting fully integrated into society (brands like Starbucks, Nike, and more have already dived in).
It’s up to brands to ground themselves in the web3 ecosystem before they’re left behind.
1. Tokens: Digital ownership and rewards
Users can purchase a unique digital product and prove ownership. This is huge, especially in the digital art and collectible community.
Web3 owners can also invest in assets and resell them in the future. Digital items now have tangible value thanks to NFTs that help prove their ownership on the chain.
Owners can also receive rewards or “airdrops” from the brand they purchase the NFT from. Or, they can join exclusive events. These are significant advantages for brands that want to connect with their customers and build momentum through that community.
For example, when Mojito partnered with the Tampa Bay Rowdies, they created a NFT digital pass for season ticket holders. Most owners claimed their pass and used it for in-game discounts and perks.
This empowered the team's fan base, increased loyalty, provided trackable engagement, and positioned the brand as an innovative leader in the sports industry.
2. Loyalty: Engagement, communities, and memberships
Web2 had fragmented communities all over the internet, like social media groups and forums. Now, web3 offers more intimate, organized, and decentralized communities.
For example, communities have more qualified members. Through token-gating, members have buy-in by purchasing or winning an NFT. They can all meet in one place, even virtually through video events.
While their experience might involve different apps and locations, it’s all connected to the blockchain, creating an interconnected experience. And through ownership, community members can build their investment and reputation within their circles.
These are prime opportunities to host events, launch exclusive products and collectibles, and grow a brand’s following.
3. Monetization: Additional revenue streams
Lastly, web3 eCommerce solutions open two new revenue streams for your brand.
First, you can sell unique digital products identified through tokens (NFTs) on blockchain networks—a product class that never existed before. Then, when someone resells the NFTs you mint, you can earn a percentage of those sales back as royalties.
These new revenue streams have changed the game for the luxury industry (and it's only just begun).
Brands can leverage the most popular ways to sell onchain assets:
Companies can sell NFTs representing a digital good. They can sell an art collection, a digital pass, digital representations of a product line, and more.
Digital physical twins
Brands can also sell NFTs that link to physical products. A customer can own a digital good and a physical version. Customers could receive the digital product immediately and redeem the physical version.
Redeemable NFT products are great if a buyer purchases an expensive good and doesn't want to worry about the logistics immediately (like shipping or picking up the item). They can redeem the good with their NFT and get the physical item when ready.
Both of these types of NFT categories offer royalty opportunities for brands (on the first sale and with resales on secondary markets).
As customers jump into web3, brands can scale with them and offer the products and service experience they love. It's an exciting time to grow your brand and embark on a new digital frontier with expansive revenue opportunities.
Web3 eCommerce use case: Sotheby’s landmark innovation
When most of us hear about new technology to implement in our organization, we’re often intimidated—especially if the business has been around for a while. Simply put, change is hard.
But the beauty of web3 is that its community and innovations are for everyone—in one case, an almost three-hundred-year-old auction house:
Sotheby’s has the most respected reputation for its high-end art sales. With their experience and history, they knew they needed to continue evolving for the future. If the future of art is moving digital, they wanted to ensure they were leading the way.
Long story short: They needed to invest in a platform facilitating web3 payments and art ownership.
After seeing huge NFT art sales in the millions, they knew that the market wanted a web3 art experience.
But, like anyone else learning something new, Sotheby’s leadership team wasn’t sure where to start. They saw NFT sales and collections as a community-first experience—much like how they facilitated the art community in traditional settings.
Sotheby’s recognized they were dealing with a new generation of collectors and artists with different interests and needs.
One question lingered as they dove into the shift: “How can we serve these people?”
Sotheby's wanted to run their own sales and give buyers a reliable, classy way to purchase straight from them with their auctions under their own control. They envisioned an easy entry for newcomers while serving the early crypto-savvy crowd through a white-label experience powered by Mojito.
Mojito built a versatile, user-friendly marketplace for the luxury auction house. And it was a huge success with over 130 million dollars in NFT sales to date.
Customers could easily view art and bid for the work they loved. When they won, their transaction seamlessly went through, and they became proud owners of distinguished art.
Sotheby’s now stands as a bold innovator. Sotheby's garnered acclaim as a mover and shaker on the heels of its rapid and wholehearted plunge into the space—a journey closely linked with the bedrock Mojito helped lay.
Important considerations: AML compliance in web3 eCommerce
While web3 eCommerce offers exciting opportunities for brands and customers, we should also consider compliance issues.
Cryptocurrency is new and volatile, and while the technology is very secure, it still faces threats from bad actors—just like any commerce space.
These are problems that already existed in web1 and web2, but since web3 is new, it opens up vulnerabilities to users who are learning the ropes.
Brands should partner with a marketplace and platform that is AML compliant, meaning they responsibly fulfill requirements for anti-money laundering regulation. Brands should also implement robust identity verification processes and transaction monitoring to prevent fraudulent activities—all to protect customers and comply with regulations.
Not only is compliance important from a legal and ethical point of view, but it’s also critical for web3’s higher standard for privacy and security. Consumers want more transparency and responsibility from brands. And if brands can prove that they’re taking care of customers and leading the way, they can build and improve their trust in the market.
The blockchain helps protect against these frauds by establishing a clear activity record. But brands will only benefit when they partner with enterprise solutions like Mojito that can provide the tools and teams to monitor and detect suspicious activity.
Mojito makes it easy for brands by incorporating tools like Chainalysis and Onfido for insights, KYC/AML compliance, and more. Businesses don't have to worry about managing multiple vendors and services because Mojito brings it all together.
How Mojito facilitates web3 eCommerce experiences for brands
If brands don’t act now, their online experience will feel like a website twenty years ago—uneasy and hard to navigate. This evolution reflects the film and digital camera shakeup. The companies that didn't upgrade their technology would quickly fade away. Brands can adopt the web3 eCommerce stack to become tomorrow's solution (before it's too late).
Luxury brands have a tremendous opportunity to innovate and create an eCommerce stack for web3. These new stacks deal with a lot of complex moving parts. Brands need to consider the marketplace, blockchain, multiple currencies, security, community, and many other factors.
If brands want to nurture their reputation for high standards, they need a partner to pave the way and provide the all-in-one solution for web3.
Here’s the good news. Brands can create the best experience possible for their customers today.
By partnering with Mojito, they’ll have everything they need for a successful web3 presence. Brands can run their web3 eCommerce through our white-label marketplace and solutions. The marketplace is yours, not some third-party brand, and it’s presented with a seamless, elegant user experience.
We provide identity verification, payment processing, and smart contract execution, making it easier for brands to engage and monetize their web3 communities. Mojito is Soc-2 Type 1 compliant and safeguards enterprises for the safest, smoothest web3 customer experience.
Our platform offers rewards, auctions, drops, marketplaces, memberships, and easy onboarding with user-friendly checkout options.