Token-gating | web3 and eCommerce converge
For those that believe in more widespread adoption of blockchain technologies over time, it’s not a stretch to visualise a greater intersection with another big global opportunity - eCommerce. The convergence of these gives rise to an idea called token-gated commerce.
Here, eCommerce experiences are personalised based on digital assets ‘tokens’ held in wallets. In many cases, these can act as unique identifiers (showing involvement in particular hobbies, communities, interests). Retailers gain useful datapoints, in turn creating more bespoke experiences that adapt to each person.
We’re seeing this story start to play out globally. Not only by individual brands (Starbucks, Adidas, Hennessy etc) but even more important social proof is that organisations such as Shopify, an eCommerce infrastructure giant, are now incorporating these tools in their broader merchant offering.
This brings about a more tailored experience for consumers, better population profiling for retailers, and a more unified cross-brand shopping experience for everyone. Here’s how:
Step 1 - Building a Digital Identity in an Increasingly Online World
Digital identities are a way to show interests, achievements, purchases and credentials online. For example, digital assets could be collected through:
Going to a music concert, sports event or cinema and receiving a digital collectible through a QR code (proof of attendance)
Buying a clothing item and receiving a corresponding digital replica (e.g. PRADA’s Time Capsule collection)
Completing an online education course and receiving a non-fungible certificate
Playing a game and receiving a tokenised in-game asset
Purchasing some cryptocurrency or DeFi product
Or any number of reasons to accumulate any type of digital asset
In any case, each token represents involvement in an activity/community. Wallets show an aggregated source of data, and provide context on consumer preferences. It’s a consumer’s choice to then decide to use this to verify that they are part of a particular profile.
In 2022 over 80 million people held cryptocurrency wallets globally, up significantly from 2021. Notably, with the increase in blockchain-related projects, there are growing consumer use cases for digital assets. Once FUD subsides, there’s a perfect storm for retailers focused on digital-savvy users → a growing audience and growing ability to segment.
Step 2 - Making the Verification Process 10x Easier
The consumer then visits an application (e.g. the brand’s website) that can verify token data - infrastructure for this is becoming increasingly available. They then choose to connect their wallet to validate their identity and that they’re a member of particular group (e.g. a gaming community or a football fan).
More advanced gating criteria could then apply, introducing multi-factor attributes such as type/level/quantity/duration/status etc. This opens up avenues for reinventing how we look at subscriptions, membership and engagement.
The brand will instantly gain a better gauge of their consumer, and provide them a commerce experience accordingly. This could include exclusive discounts to engage new token holders, first access to new product lines for OG token holders, and unique experiences for different tiers.
It’s unified -> having a single wallet to show digital identity and interests without a making accounts everyone.
It’s automated -> simplified into code so apps can read and interact instantaneously.
It’s data-rich –> any information can be held in the metadata.
It’s self opt-in -> Sensitive data (e.g. account balances, financial holdings) can be stored separately and kept private.
Step 3 – What’s Next –> Building Out the Ecosystem
This could have significant one-to-many network effects in a retail ecosystem.
Sports retailers could then target those with football tokens, energy companies could target organisations with tokenised carbon credits, banking providers could target those holding DeFi products, and keyboard retailers could target those with gaming-linked digital assets. There’s then infinite permutations of collaborations and cross-pollinations across industries, brands, sub-communities.
What this creates is the ability to have single passport (’wallet’) infrastructure, compatible across any organisation, that removes the friction of incompatible IT systems. The implications of this hyper-segmentation are significant for eCommerce - brands can now better activate otherwise ‘anonymous’ online communities, and consumers can now have interoperable experiences across brands with one click verification.
Over time, the infrastructure will allow increasingly connected experiences, integrated into existing user flows, where tokens can be linked to eCommerce data and activity.
Spending more, more frequently, or across certain product lines, could automatically level up digital assets. These same assets can then be used across retailers, games, virtual platforms. That’s what happens when a global audience, standardised infrastructure, and transparent data sharing collide.
If you’re interested, please contact us for our case studies where we have facilitated initiatives incorporating the above.
Plaza Technologies has developed simple, enterprise-grade software for any organisation to take the first step into Web3 and explore meaningful use cases. If you’re interested but don’t know where to start, reach out to admin@plazaapp.io