This post includes updates to the web3 for consumer brands/Open3 Collective knowledgebase and sent via email to members.
The one takeaway for this week’s update
Feature image using Stable Diffusion with prompt: a thunderstorm on the horizon with dark clouds at sunset in the state of Utah in high detail with rich colors
My predictions for hitting U.S. mass market usage of web3 in specific verticals were as follows:
- Sports event ticketing. Creating NFTs behind tickets to sports events is a no brainer and has good momentum now. I would estimate mass market use in 2-5 years. Leaders: NBA, NFL, MLB.
- Loyalty programs. 3-5 years. Leaders: Starbucks
- Gaming. 3-5 years. Leaders: Roblox, Epic Games
- Apparel and luxury 4-10 years. Leaders: Nike, Adidas, luxury brands.
But, as of a few weeks ago, I am not so sure about these timelines and think they will be further out because of the following:
- regulator activity that is not providing guidance allowing the industry in the U.S. to grow;
- excessive blockchain transaction processing costs;
- massive friction with current blockchain use;
- and market conditions that are disincentivizing the paradigm’s development by consumer brands.
All of this will get worked out over time, but the regulatory activity is especially problematic and means we may not get clarity till at least 2025 and beyond, past the next election cycle.
My general near-term recommendations with web3 still hold, which are published in the forward guidance document here
See all weekly takeaways published to one document here.
Notable Market Intelligence Updates
- Doritos is launching its web3 initiative on Decentraland. Those who engage will have a chance to win NFTs from high value collections such as RTFKT and Meebits. Polygon is the blockchain behind the scenes. A standard strategy for food/consumable brands seems to follow this approach – create a space or offering in a metaverse network that is gamified with rewards. I think there are few if any real revenue generation opportunities with food/consumable brands in web3, but still a lot they can do to extend their brands like this approach here.
- Chloé launches ‘instant resale’ using digital IDs on Vestiaire Collective. This is a nice use case for using NFC chips to identify each garment that contain the items manufacturing history and which can also be used to easily list the product for resale on the Vestiaire Collective platform. It appears to be a very seamless, fast, convenient, frictionless experience to help encourage customers to sell used products. There is no web3 in this process. What web3 would do is add a step where an NFT is created that is linked to the NFC chip of the item, with the following benefits:
- With the NFT, a customer can sell on other web3 NFT marketplaces.
- The NFT could also be used to accumulate experiences, history and lore attached to the item submitted by the user;
- Brands can communicate to the owner via NFT, and they can create experiences/challenges/events through the NFT for the owner;
- Secondary market royalties can be set via the smart contract so the brand gets revenue on resale;
- Usage can be tracked with respect to the NFT, what the owner does with it;
- Owners can search for other owners of NFTs and create their own tribes/groups/communities around the items or the brand;
- and finally, the NFT allows for social signaling where the owner can display the NFT across different platforms and apps.
- All of this above is being done now, although it is still pretty clunky and manual.
- Martina Spetlova is adding digital twins to her designs. Buyers of the digital twin can utilize in Dencetraland. The brand already uses NFT chips in garments, but no mention in this article of creating the NFT itself to represent the item. The article mentions separating the two where the owner could sell one but keep the other. If so, then creating an NFT that is tied to the physical garment would not work. But one could easily build into the smart contract the ability to separate one from the other, or keep them joined.
The above are key updates to consider. Go to the web3 market intelligence database to see all.
See the one takeaway above.
See all forward guidance published to one document here