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Technological developments have always had a profound impact on the way companies operate. The spread of the internet led to the introduction of digital marketing. The development of artificial intelligence has changed the way companies interact with their customers. And now Web3 is poised to overhaul the way the Internet works as a whole.
Web3 is being touted as the turning point of the modern internet and set to reshape cyberspace as we know it. What can a business expect from the successor to Web 2.0, the Internet we’ve become accustomed to?
See also: Web3.0: The Next Big Thing?
What is Web3?
Before we dive into how Web3 is likely to impact small businesses, let’s first talk about what Web3 really is. It is a blockchain-driven internet that offers a decentralized alternative to the web as we know it.
Although still in the early stages of development, Web3 solves what appears to be the most difficult problem facing the Internet today. It offers better privacy by eliminating central organizations and allowing users to store their data in their personal crypto wallets.
While Web3 may not completely replace today’s Internet, it may offer a more secure alternative and may trigger an exodus of users from the second to the third generation of the Internet.
Advantages of Web3
Web3 is still under development. Therefore, all of its advantages are currently rooted in theories and the potential of blockchain technology. If technology evolves as big techs have embraced, these benefits could be realized, leading to massive business process change.
1. No Third Party Involvement
Small businesses rarely have the resources to collect their own data, so they turn to third-party data mining companies.
Such third-party data is expensive and rarely accurate. 86% of companies using third-party data find it inaccurate. And data imprecision adds to the cost of data-driven operations. This is why it is said that “dirty” data affects 88% of a company’s bottom line and causes an average company to lose 12% of its revenue.
Blockchain eliminates third-party involvement, just as cryptocurrencies have largely eliminated banks’ involvement in monetary transactions. Similarly, Web3 is expected to weed out third-party data brokers by enabling P2P connections and decentralized systems that allow businesses to connect directly with their customers.
This would allow companies to collect data directly from the source, either for free or at a lower price compared to what data brokers charge. The accuracy of the data, even at a lower cost, can lead to better strategies, which can eventually be reflected in a company’s bottom line.
2. Strengthening of cybersecurity
Cybersecurity is a threat in the online shopping space. People are skeptical about sharing their information lest malicious actors steal it. And companies face hefty fines for non-compliance.
British Airways faced a whopping $26 million fine in 2018 for failing to protect sensitive consumer data. Web3 advocates claim that this next generation of the Internet will eliminate this problem.
Since the entire infrastructure is decentralized, Web3 has not a single weak point for hackers to exploit and gain access to critical information. Blockchain technology makes it difficult for cybercriminals to break into networks and manipulate or steal sensitive information.
3. Well built customer trust
Web3 will eliminate third-party data brokers who rarely respect consumer privacy. These companies often mine data without informing users and then monetize it. Companies that buy this data leave their customers skeptical about trusting them.
Web3 solves this problem by removing data brokers from the equation. If everything goes according to plan, companies can collect data from customers themselves and practice better operational transparency.
94% of buyers remain loyal to companies that operate with transparency, while 73% are willing to pay a higher price for companies that remain transparent. Therefore, Web3 can enable businesses to build and maintain consumer trust, which is a significant revenue driver at all times.
4. Better customer experience
Customer experience is and always will be one of the key variables in a company’s success equation.
No matter how critical it is, 63% of digital marketers struggle to design a good customer experience, even with the easy availability of data. With the demise of browser cookies, data collection is expected to be much more difficult than it is today, which can make personalizing the customer experience even more of a challenge.
Web3 can solve this problem with its easy availability of data. It can help marketers get important customer data without offending them. And when used properly, this data can then help provide a more personalized experience that users want.
With 48% of buyers more inclined towards companies that personalize their communications, this can lead to improved customer acquisition and ultimately more profits.
5. Improved supply chain
57% of companies have poor visibility into their supply chain.
Blockchain technology, the backbone of Web3.0, distributes data across all nodes within a network. This eliminates information silos and improves data transparency throughout the supply chain.
Once supply chains are more transparent, companies can see a decrease in relevant costs and an increase in supply chain efficiency due to improved traceability.
See also: Web 3.0 is coming, and it really means it for you
last words
The next generation of the Internet is on the horizon, ready to rise and usher in a new era of business operations.
Small businesses need to keep up with the latest trends and learn about blockchain technology as much as possible. Additionally, they must try to innovate their processes according to available technologies so they may be better able to adopt newer technologies that may come to market in the future.
This could help them not to be left behind by the big tech companies that are already investing heavily in these futuristic technologies.
