Hello, and happy Wednesday!
This is issue no. 8 of the Nebulab newsletter, your favorite bi-weekly reflection about retail, DTC, and eCommerce technology.
We've talked about retail and Web3 before, but we've seen enough brands launch metaverse shops and NFT-based loyalty programs now to believe the topic deserves a deeper analysis.
First things first: in its current form, Web3 is still incredibly niche. When you look at the brands launching Web3-based touchpoints, most are either Web3-first or fall in the $100M+/year revenue bracket. At first glance, this might seem like a matter of resources: it's hard to do Web3 when you're busy staying alive—unless your staying alive depends on doing Web3.
However, there's something else at play here: when you look at the way most brands are using Web3, they're trying to abstract away as much of the underlying complexity as possible— this is especially true for smaller operators, but even the behemoths often go down this path of simplification.
We can only speculate about the why, but we suspect it's because Web3 by itself just doesn't have enough gravitational pull: it's an ecosystem of isolated islands, and customers use it to do a very specific thing, not wander around—even though some players are trying to change this. Today's Web3 can drive engagement through in small customer segments, but it can hardly be a means of brand awareness or customer acquisition.
So, where does that leave us? Big brands with large creative budgets can afford to experiment with Web3 and see what they squeeze out of it. For small operators that don't have a compelling reason to be in the Web3 ecosystem, it's better to wait and see how things play out.
Ultimately, for Web3 to become widespread, the technology itself needs to step away from the spotlight, develop the interconnectedness typical of all successful infrastructures, and demonstrate the ability to generate incremental value for its users and the companies that invest in it.
Today’s reads
Today, we’re pulling out the very best from our archives about the synergy—and lack thereof—between Web3 and retail.
Modern Retail Research: 73% of brands say they don’t buy into web3. While this might seem dispiriting at first, it’s just a sign of untapped potential. Many brands would love to explore Web3 but don’t know how the technology might contribute to their top line. Huge rewards await those who manage to connect the dots and offer a clear path to value.
Augmented Reality is the Future of Online Shopping. It shouldn’t come as a surprise then that the most promising Web3 (Web2.5?) technology, when it comes to retail, is also the one that lives closest to the physical world. For specific categories, especially, AR can significantly move the needle when it comes to conversion and return rates.
NFTs are dead. Long live digital collectibles. We featured this interview in the past, but it’s particularly relevant now: you don’t need to know anything about NFTs to use Starbucks Odyssey. The most successful retail x Web3 experiences have very little to do with Web3 and everything to do with the brands that power them.
How web3’s connected fashion products drive brand loyalty. “Composable technology” is the keyword here. Cult & Rain relies on NFTs as infrastructure to power their loyalty program in the physical realm, all while giving a nod to the hardcore Web3 community. Talk about getting the best of both worlds.
Insights from Nebulab
eCommerce A/B Testing: Strategies for Success
Many eCommerce brands set up an A/B testing practice.
Unfortunately, very few teams have the foundational capabilities required to run an effective A/B testing operation. This often leads to a waste of resources—in some cases, it can even be detrimental to the customer experience.
We've just published the first of a series of articles about A/B testing. Check it out to learn the key elements and best practices that will allow you to use A/B testing as a tool for uncovering data-driven market insights and significantly moving the needle on your KPIs.
Upcoming webinar
Bridging the Gap: From Product Vision to Product Strategy
Do you know the most common complaint about leadership from product teams? It's not salary. It's not workload. It's actually lack of direction. The solution: great product strategy.
This webinar with Patti Chan is for anyone leading digital product or eCommerce. You'll find that you're likely already doing product strategy, and you'll come away equipped with frameworks and tools to turn a 5-year digital product vision into next quarter's roadmap.
See you on Thursday, April 6 @ 9am-10am PT!
That's it for today!
If you have any questions, comments, or NFT wallets to spare, we're ready and waiting at [email protected].
See you in two weeks! 👋
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