Unlocking the Enigma: Exploring the $10 Billion NFT Industry and the Absence of Web2 Brands and Mass Customer Adoption
It doesn’t get much bigger than Nike and Fortnite, does it?
There’d be an argument to say that Nike’s recent Airphoria collaboration puts all doubt around the mass adoption of NFT-backed Web3 initiatives by Web2 brands to bed. The world’s most popular video game joins forces with the world’s most popular sports brand to merge two of the most popular industries and disintegrate borders between the physical and digital worlds. This isn’t more “hype”, this is a new apex, surely?
Perhaps.
But already, there have been access issues due to UX inconsistencies and there have been reports of refunds issued to users. Instances like these have led to reservations from Web2 players, and in particular, those without the required safety net to make such ambitious bets on the industry. This, in turn, has made the road to mass adoption a lot slower than many would hope.
Clearly, there are factors at play behind the monumental headlines that we see and the undercurrent of mass Web2 engagement trends that exist. So what exactly are these opposing factors, hiding behind the scenes, that are holding back progress toward mass customer adoption and widespread integration from Web2 brands of all shapes and sizes? And more importantly, how can they be addressed?
Unfocused Execution
A lot of these campaigns haven’t lived up to their true potential. Too often we have seen ambitious projects delivering lacklustre results, owing to a lack of an in-depth understanding of the market demands when it comes to NFT offerings. There is no denying that those in the Web3 space have the power to create revolutionary work that leverages all the novel opportunities put on offer by blockchain technology, but this knowledge has not always been capitalised upon by Web2 brands entering into the space.
How many times have we seen big brands building up to an NFT drop on social media for the ‘next best collection with the most unique utility and reward’ – only for audiences to be left underwhelmed shortly thereafter? Following the release, it becomes very apparent that there has been no due diligence paid to the need for fostering community and tangible benefits to allow for the long-term success of the project.
This lack of consideration prevents initiatives from being adopted by the Web3 community in the first instance, making it increasingly difficult for them to gain the traction necessary to reach mass Web2 audiences.
This is not to say that successful projects in the space don’t exist. In fact, 2022 was arguably the year of mainstream Web3 adoption, in which the National Football League debuted their entrance into Web3, announcing that fans would receive virtual commemorative tickets in the form of non-fungible tokens (NFTs) to celebrate Super Bowl LVI in Los Angeles. In the same year, Gucci decided to tap into the fashion-forward crypto crowd by offering customers in-store crypto payments in more than ten digital currencies, including Bitcoin and Ethereum. Months later, the world's largest coffeehouse chain Starbucks unveiled their Web3 experience for reward members, described as a ‘new, next-generation loyalty program model to the world’.
Further unique examples with tangible value-adds include Prada’s recent product-linked NFT drop, and rap icon Snoop Dogg’s recent NFT project at the intersection of technology and music, allowing his fans to virtually follow his life on tour.
With the likes of Gucci and Starbucks leading the way, Web2 brands entering this space need to drive their NFT campaigns with elements that have a tangible impact on engagement processes and change how an experience is felt by the end user. Ultimately, this is what will attract Web2 audiences: clear-cut examples of how NFTs are reshaping social interactions, gameplay, shopping experiences and even digital identification.
Too much talk
From the outside looking in, the NFT industry may give off the appearance of being, at times, misaligned and misdirected when it comes to the desires of Web2 brands and consumers alike. There are a variety of different claims being staked, with different nuanced experiences being offered left, right and center. However, for the Web3 industry and NFTs to truly capture mainstream traction, we must stop feeding into indulgent media narratives with new lofty promises, especially if the real walk isn’t being walked when it comes to delivering on the basics.
When NFT projects propel transformation in various industries audiences - such as eCommerce and music - audiences will engage naturally and no sales pitch will be needed.his rings true both for Web3 projects attracting Web2 brands, and in turn, Web2 brands offering NFTs to their customer base.
Dilute the architectural design, simplify the toolbox
So how do you actually go about this? Let’s imagine that Web2 users are interested in Web3 technology, they’ve read about an NFT collection and what benefits, perks and transformation it could bring, they are undeterred by the naysayers and they want in. How do you actually onboard them?
First things first, Web3 brands need to make it as easy as possible for Web2 brands to leverage NFTs and the adjacent infrastructure. These prospective adopters want to know how they can start using what’s on offer - so what do they actually need to do?
What solutions, tools, apps and processes are actually ready to be put in front of the end user? And how easy are they to use? By far the most impactful way to onboard Web2 is by making the effort required as minimal and seamless as possible. This means spending your time, resources and energy on the products and services behind the flashy campaign that enables the experience to exist. Refine them with the uneducated and the inexperienced in mind, and make a concerted effort to educate these organizations on not only how to put these products on offer, but further, how to maintain and nurture the long-term successes of these initiatives.
In 2024, it is anticipated that corporations will spend $19 billion USD on blockchain technology for the wide-ranging benefits of increased security, transparency, and improved efficiency. Tools such as APIs, software toolkits, and widgets offer traditional companies the means to expand into Web3 without having to restructure their business. Shopify used this approach by launching an NFT offering powered by secondary blockchain technology app partners. In December 2022, Stripe announced their Web3 strategy with a customizable fiat-to-crypto onramp widget to enable businesses to easily process crypto transactions.
Apply patience
It is important to remember that evolution has begun. Web3 is coming. NFTs are a reality and natural progression will take course. Market fluctuations, successes, and failures will ultimately remain as steps in the stairway to a new world. Mass adoption need not be forced. Faith and persistence coupled with planning is all that is really required for the NFT industry and blockchain technology to eventually give the world all that it has to offer.
