Web 3.0 is coming fast. Although not yet fully realized, it promises to mark the end of the domination of the Internet by powerful platforms, such as Google.
“This third generation of Internet services will be the catalyst for a new Internet, connecting data-driven technologies such as artificial intelligence and machine learning to fully distributed data ecosystems,” wrote Danial Araya, another Forbes.com contributor.
Essentially, Web 3.0 will displace the power of the Internet from a narrow band of platforms that retailers and brands currently rely on to reach customers. This power will be transferred into the hands of consumers organized within communities of interest whose members will interact on multiple platforms.
As this future unfolds, consumers are not going to rely on authorities, like brands, to give them the information they need, but on each other.
Early adopters reveal the future
Consumers classified as “early adopters” can be our guide to the future of brands in Web 3.0. Early adopters are a segment of consumers who are generally younger, more educated and better off.
They are the harbingers of change in the consumer market, picking up on new technologies and trends that the rest of us eventually follow. They also tend to be luxury consumers, given their higher economic status and education.
To look over the horizon at the changing priorities and expectations of early adopters and Web 3.0, Boston Consulting Group conducted a study with Highsnobiety, a fashion and lifestyle media platform that is one of favorites of the early adopter class. In the study titled Luxury 3.0they call them “Cultural Pioneers” and look specifically at their preferences in the luxury market.
But don’t be fooled. The implications of this study go far beyond the luxury market and luxury brands. It can help all consumer-facing retailers and brands prepare for the power shift of Web 3.0.
And just as early adopters are the harbinger of changes that will occur in the broader consumer market, luxury is also a harbinger. Luxury is where fashion, beauty and lifestyle trends begin and then translate to the mass market.
BCG’s Sarah Willersdorf, who led the study, notes that luxury brands have been ahead of the curve in embracing Web 3.0 capabilities such as blockchain, DAOs (decentralized autonomous organizations) and product-related NFTs. physical and digital. But many mass brands are also dipping their toes into Web 3.0, including Coca-Cola, Pepsi, Burger King, McDonalds, and Gap.
“Web 3.0 is characterized by decentralization away from traditional sources of authority,” the report explains, and brands at all costs have been a traditional source of authority. “Luxury 3.0 [or read Consumer 3.0] represents a profound change where individuals and communities have more control over the narrative than ever before.
Cultural pioneers lead and the mass market follows
Of the more than 4,000 luxury consumers surveyed, just under a third were classified as Cultural Pioneers. They stood out from the general luxury consumers surveyed by being more aware of brand, fashion and design trends. They were also younger and spent 38% more on luxury than luxury consumers in general.
But don’t be distracted by the “luxury” label. Luxury consumers buy many other non-luxury brands and products. What is most important in this study is not so much their luxury shopping behavior as their psychographics or underlying consumer psychology, which applies to all categories of consumers in which they participate. .
As a group, the Cultural Pioneers are highly engaged on social media, with around two-thirds participating once a day or more frequently. They favor Instagram (89%) and YouTube (50%) to interact with their online communities. Facebook is far behind, used by only 33% of cultural pioneers, and they are more active on Reddit (33%) and Discord/Slack (19%) than other consumers surveyed. They also have more followers online, making them thought leaders and influencers within their groups.
Cultural trailblazers over-index in online communities organized around sneakers and streetwear (each 57%), luxury brands (52%), specific brands (46%), crypto investing (20%) and social activism (20%). They are about as involved as other luxury consumers in sports (31%), running/fitness (24%), games (22%) and work/industry (14%).
Rise of Metacommunities
Under Web 2.0, brand communities were largely owned and operated by the brand, existing on a select set of channel platforms where the brand controlled the community. Described as monolithic, closed and linear with top-down brand communications, these brand communities included a cohesive group of brand enthusiasts present to praise the brand.
This traditional brand community model is being replaced in Web 3.0 by a decentralized, circular model that BCG calls metacommunities.
“Metacommunities are fluid, dynamic, and fragmented,” Willersdorf said. “It’s a very different notion than a brand talking to their community of people who buy for the brand. You’re actually talking to a lot of different sub-groups and audiences around the brand, whether they’re act as fans, consumers, detractors or commentators.
In Web 3.0, brands need to address a much larger audience than just a select group of buying consumers. People are drawn to decentralized metacommunities primarily to learn new things, gain insider information through group discussions, and bounce ideas off other group members. Willersdorf cites Diet Prada, Slow Factory, Old Celine and Dank Art as examples of these new metacommunities.
“When we think about engaging audiences, not just consumers, it’s about sharing brand stories and industry insider knowledge,” Willersdorf said.
Another difference between Web 2.0 and 3.0 is the notion of co-creation. “It changes the role of the brand’s creative director from coming up with new ideas and pushing them to market to orchestrating relationships with other creators, whether that’s co-creating products or advertising,” she said.
“People want a participatory and collaborative relationship with brands, treating their consumers as equal partners in the relationship. They expect two-way communication that did not exist before,” she continued.
And brands will be held accountable if they fail to meet the expectations of community members. They require brands to be accountable on ESG (environmental, social and governance) issues and expect brands to listen and act on community feedback. If they feel a lack of credibility, they will not remain silent.
The balance of power shifts
It will be a challenge for every brand, from mass to luxury, to navigate the new world of Web 3.0 and understand how grassroots organized brand audiences will change the dynamics of the consumer-brand relationship.
For too long, brands have believed they hold the balance of power in this relationship, but as Web 3.0 evolves and the strength of metacommunities grows, they will learn differently.
In conclusion, the BCG/Highsnobiety report quotes Céline Semaan, founder of the Slow Factory Foundation. She perfectly expressed the changes to come as meta-communities rise and begin to wield their power over brands in Web 3.0.
“Communities do not exist in a vacuum. Communities do not belong to brands. Communities exist independently of brands. Communities don’t need brands. Brands need communities,” Seaman said and added, “Communities exist around interests. It’s up to brands to bridge the gap between their values and their actions by responding to these interests.