The third era of the web, or Web 3.0, doesn’t currently exist today, and, in fact, is still just an idea of what a different, improved internet could look like. While many experts have thoughts on exactly what problems exist with shopping today that could be fixed in Web 3.0, broad solutions have yet to be actualized.

Most ideas for Web 3.0 are based on two principles: ownership and decentralized authority. Today, digital assets, as well as personal data, are owned by large media and tech companies. While these companies rely on selling this data to advertisers, creators and consumers alike that contribute the data have little say in how any of this system works. In a decentralized model, they would take more control, or ownership, of this data.

Similarly, media conglomerates have become “walled gardens,” meaning that they don’t interact with each other, creating friction between different siloed monopolies. Many experts currently building Web 3.0 are attempting to use NFTs, blockchains and AI/ML to decrease this friction and spread out ownership and authority among users.

Shopping will likely become more seamless for shoppers, making products more findable. For example, internet searchability could be improved in Web 3.0 using blockchain-based search engines. Currently, when a consumer starts a product search on Amazon and doesn’t find what they’re looking for, they have to start the same product search over again on Google Shopping or Walmart.com, for example. In the future, it’s possible that consumers could save their searches and carry them through the different retailer websites they’re browsing. In fact, 20% of consumers predict they’ll soon be able to take their profiles and data between metaverse games, according to Publicis Sapient research.

Another potential application of Web 3.0 could improve the management of customer data. Content creators and casual users alike aren’t currently compensated for videos or personal data by social media networks—at least not in a meaningful way. In addition, 64% of consumers also worry that their data and information will be collected if they use the metaverse. One proposition for Web 3.0 social networks is the ability to choose when and how users share their data with companies in exchange for some sort of value, including payment for content creators.

However, Web 3.0 is still just a nebulous collection of these specific use cases, nascent technology and idealistic projections. It can be difficult for retailers to determine exactly how their business should change and how to prepare for it.

One way to think about the future Web 3.0 is a comparison to the creation of the iPhone and its subsequent influence on society.

Currently, the majority of the population doesn’t own NFTs. NFTs became popular through specific digital art and currency uses, which haven’t yet translated to broader applications. Most people aren’t paying for goods and services with Bitcoin or Ethereum either, and they haven’t purchased tokenized collectibles. Only 14% of U.S. consumers ages 18-34 own NFTs, and the percentage lowers to 7% for the general population, according to Publicis Sapient research.

While retailers should still prepare to accept cryptocurrency for purchases and develop digital tokens for physical products, NFTs will become much more useful in loyalty programs and inventory management. In fact, ¼ of consumers in the same study believe that brands will soon embed loyalty points and rewards within NFTs.

“Consumers and brands have realized that NFTs need to offer some type of value proposition. What are customers currently engaging with that could be improved with Web3?” Dalal said.

Loyalty programs are a major effort carried out by most retailers. Loyalty points exist as a debt— as owed products or services to customers. Currently, tracking and securely validating loyalty points and rewards across e-commerce and physical stores in real time can be quite difficult.

This is a space where blockchain technology would be especially helpful, and many retailers are starting to jump in. Starbucks, for example, has one of the world’s largest and most successful loyalty programs. The chain recently announced its foray into NFTs through its loyalty programs, where members will be able to redeem NFTs for special products and experiences.

However, it’s important to note that using NFTs to build out a loyalty program can’t solve every problem.

“If your loyalty program is not delivering A+ results, what will change with Web3 technology that will deliver A+ results? And is that underpinned by a proper strategy and utility?” Dalal said.

NFTs are also gaining traction in inventory management. With NFTs, retailers can code all physical products as digital twins in Web 3.0, tying online inventory with warehouse inventory and cross-store inventory to see where physical products are at all times.

Before diving in, retailers should carefully consider which blockchain technology to use. Because Web 3.0 technology is still in its early days, it’s possible certain companies will develop faster and end up dominating others. Brands should test multiple blockchains by setting objectives and testing performance before choosing a blockchain and fully investing in it.

Another Web3 space that should see significant growth over the next year is AR/VR, which will be especially relevant to the retail shopping experience. Two of the biggest obstacles to the wide-scale adoption of this technology are the hardware and experience, which still aren’t up to par with many consumer standards. Often metaverse worlds and AR experiences can be glitchy with poor image quality. Most VR headsets are also a bit too bulky for daily wear.

Luckily, the technology is drastically improving. Apple is rumored to release its first VR headset next year, and Sony’s PSVR 2 is heading down the pipeline as well. As this hardware and its accompanying experiences improve, AR and VR can begin to influence how customers purchase products. 20% of U.S. consumers between ages 18 and 34 currently own a virtual reality device, and 40% said they’d be likely to purchase one within the next year, according to Publicis Sapient research.

Some retailers, like luxury clothing house Hugo Boss, have already started to dive in. The company is testing AR to create digital mannequins with customers’ exact body measurements to try on clothing virtually. Amazon has launched a similar feature for shoe try-on, where customers can use their phone camera to see how a pair of shoes would look on their feet from different angles. This use is also applicable to furniture. About 40% of U.S. consumers between ages 18 and 34 are interested in trying on clothes in the metaverse and visualizing other 3D products before making purchases.

“We are at the beginning of the journey in mass producing AR and VR hardware at affordable prices, which means retailers should prepare to double down on this technology,” Dalal said.

While the technology isn’t fully optimized, retailers can experiment with app features and other experiences to see what works best and how customers engage. This will help them prepare for a future where AR/VR is the norm in a shopping experience.

While much of the work dedicated to improving the web experience is focused on Web 3.0, the use of AI/ML has the ability to drastically impact the current state of Web2, and it’s something retailers should invest in moving forward. Before Web3 becomes a reality, we’ll likely experience a hybrid version of Web2, like Web2.5, and AI/ML will likely be able to take on work faster with limited resources.

One of the biggest use cases for AI already is targeted advertising, where automation is already efficiently powering thousands of minor decisions to personalize ad experiences online. Other uses for AI are currently still in their beginning stages but are steadily improving.

For example, while most advanced AI-powered chatbots can hold conversations with customers, they still haven’t reached the level of service of a human employee. Similarly, AI writers or content generators can help optimize content and even generate copy for them in some instances. Still, these chatbots can’t yet create longer stories or articles on their own.

While most retailers shouldn’t rely on AI to generate photos, text or hold all conversations with customers, the technology will likely improve enough to be able to take over the majority of these responsibilities in the future.

However, many retailers and tech startups have already started to experiment in the AI space when it comes to personalized shopping. Pinterest acquired a shopping app called THE YES, which allows customers to browse through pieces by swiping right or left while a supporting AI learns customer preferences and curates better selections. Rather than creating increasingly complex filters to facilitate the shopping experience, retailers could rely on AI to create intelligent shopping algorithms to deliver individualized experiences.

According to Dalal, while AI is helping to support functions like this in Web 2.0, much of the workforce could then transition to building out new shopping experiences fit for Web 3.0.

Just as e-commerce and Web 2.0 have transformed the retail industry, Web 3.0 is poised to do the same more excitingly. While many experts are focused on the initial hype—and even fear—surrounding the buzzword, a significant opportunity to make the shopping experience better lies ahead.

“It’s like rolling a snowball down Mount Everest. Shoppers won’t be limited to a phone, laptop or other device, and we can take digital shopping across all of our senses, including touch, hearing and sight. This is a monumental opportunity in our world,” Dalal said.

Retailers can embrace this innovation by testing and experimenting with NFTs, AR/VR, metaverse experiences and AI/ML today while still knowing that these technologies are in their infancy and will continue to evolve.