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  • Writer's pictureDecasonic

The Next Frontier in Online Shopping: Unlocking New Possibilities with AI and Web3

Updated: Jan 16

-- Lauren Tierney, Venture Investor, Decasonic

From Clicks to Experiences: Revolutionizing the E-Commerce Journey

E-commerce has hardly changed since the inception of the internet. What we refer to as Web 1.0, became available to the public in 1993 and the first e-commerce site that allowed for online purchasing via credit card, NetMarket, was launched just 1 year later. NetMarket sold a variety of CDs and books in a very static interface.

Today, our shopping experience is still very static and follows the same burdensome steps as NetMarket did in 1994:

  1. Open browser

  2. Search for item(s)

  3. Imagine the 2D product photos in your life

  4. Read the product description for more information

  5. Compare products on costs

  6. Sign into account

  7. Add to cart

  8. Enter payment details

  9. Enter Shipping information

  10. Check out

Even after more than 27 years, traditional e-commerce platforms still live in 2D catalogs. They have yet to incorporate not just the multimedia components we come to love in our current internet, but also the emerging immersive and interactive elements that truly engage online shoppers. The current state of e-commerce has led to a staggering 79% of customers abandoning their online shopping journey by the time they reach just the third page.

A transformative moment is on the horizon for e-commerce. The convergence of blockchain and AI technology will revolutionize the industry, ushering in enhanced e-commerce experiences, driving revenue for businesses, and deepening consumer-brand relationships.

This shift in the e-commerce landscape will be driven by three core use cases that utilize blockchain and AI technology, fundamentally reshaping the way we experience online shopping:

  1. Commerce Co-creation

  2. Proof of custody

  3. Immersive e-commerce

Commerce Co-creation

Web3 commerce enables brands to co-create new products and experiences with their consumers. Gone are the days when you need a survey response to understand how the consumer likes or dislikes a product and what they want from future products. With commerce co-creation on the blockchain, customers can provide input into new products, help co-create those products and earn royalties for co-marketing them.

One of the many brands leading this innovation is KiKi World. KIKI World, a trailblazing web3 beauty brand, empowers its community by giving them full control over product decisions through democratic voting. By placing the community in the driver's seat, KIKI World ensures that the products going into production are a direct reflection of their collective preferences and desires. When Forbes asked the co-founder and CEO of KiKi World, Jana Bobosikova about her co-creation business approach she shared, “To build a brand for the future, we need to build it with people so they need to be able to tell us what they want.”

Another not-so-new brand innovating in this space is Nike with its.SWOOSH project. Nike created a community platform called .SWOOSH, where members could co-create the design of NFTs. Nike provided members with assets, such as 3D models of Air Force 1 sneakers, patterns, and colors. Members used these assets to create their own unique designs, and Nike selected a few of the best designs to be included in the NFT drop. The NFTs were then sold to members of the .SWOOSH community.

Nike and KiKiWorld are not the only brands that are implementing blockchain co-creation. Other brands that are using co-creation include Adidas, Gucci, and Louis Vuitton.

By harnessing the power of blockchain technology, brands embracing co-creation enable a unique synergy where they can tailor products precisely to their consumers' wants and needs. This approach not only cultivates a stronger bond between customers and brands but also presents an exciting opportunity for customers to earn royalties for their valuable contributions when their product ideas come to fruition. This alignment of incentives and mutual benefits fosters enduring relationships that grow increasingly steadfast over time.

Proof of Custody

Counterfeit products are a top problem for luxury brands. For fashion brands, counterfeits represent illicit competition that leads to more than $50 billion lost in sales every year. Besides this immediate loss, counterfeiters are also responsible for irreparable damage to brand reputation as customers lose trust when faced with fake products.

By leveraging the power of blockchain and AI, brands can implement a solution: "proof-of-custody" on the blockchain. This innovative approach involves the creation of tamper-proof certificates of authenticity for fashion brands, effectively thwarting counterfeiting attempts and safeguarding the brand's esteemed reputation.

By securely storing these certificates on a decentralized blockchain network, they become immutable and transparent, ensuring that they cannot be tampered with and enabling anyone to easily verify their authenticity. Leveraging the power of AI, brands can analyze a wealth of data, including product history, materials utilized, and the production process, to generate a distinctive digital signature for each individual product.

Breitling, the renowned watch brand, has leveraged blockchain technology through its partnership with Arianee to establish a digital ecosystem for its watches. By integrating a digital passport powered by blockchain, Breitling ensures enhanced security, proof of ownership, and seamless connectivity to its digital warranty program, enabling customers to track repairs and explore additional services such as warranty extension and insurance subscription.

In addition to its pivotal role in preventing fraud, the utilization of AI and web3 technologies for proof of custody also enables fashion brands to cultivate stronger relationships with their customers by offering them verifiable proof of authenticity. By ensuring transparency and trust, brands can enhance customer confidence and foster long-lasting loyalty. Through this approach, fashion brands are empowered to forge deeper connections with their discerning clientele, further driving value to their brand.

Immersive E-commerce

Mixed reality (MR) presents a transformative solution to one of the most significant challenges in online shopping—the lack of ability to try out products before making a purchase. In 2021, retailers grappled with staggering return rates, reaching nearly 17% of all goods sold, resulting in a staggering cost of $218 billion. This issue persists because, as mentioned earlier, online shopping has witnessed limited evolution over the past 28 years.

The convergence of AI and blockchain technology holds the potential to revolutionize the e-commerce landscape, particularly by enabling immersive shopping experiences that bridge the gap between the physical and digital realms.

With AI-powered virtual try-on experiences, customers can enjoy more accurate and realistic simulations, enabling them to visualize how clothes will look and fit their individual body shapes before making a purchase. This reduces consumers' uncertainty and increases confidence in selecting the right items. Additionally, AI can leverage customer data, including shopping history, preferences, and body measurements, to offer personalized recommendations tailored to each individual's unique style.

By analyzing these factors, AI algorithms can suggest clothing options that are more likely to fit and suit the customer, ensuring a highly personalized and satisfying shopping journey. The integration of AI and blockchain technology opens up new possibilities for immersive and personalized e-commerce experiences that cater to individual needs and preferences.

An example of this transformation is Adidas' use of 3D scans in their AR try-on app. However, preparing the files for the app posed challenges due to their size and incompatible format, requiring extensive manual work that was not scalable. To overcome this, Adidas partnered with VNTANA, a cutting-edge platform that harnesses blockchain and AI. By uploading over 2,500 shoe models to VNTANA, the 3D files were automatically optimized and converted to meet the app's requirements. This process, previously taking six weeks, was accomplished in just one hour, showcasing the time-saving potential of blockchain and AI. The successful integration of 3D and AR try-on experiences resulted in a remarkable increase in conversion rates, more than doubling those achieved with traditional 2D images. This example exemplifies the transformative power of blockchain and AI in revolutionizing e-commerce, delivering a more immersive and satisfying shopping experience.

Other leading e-commerce brands, including Warby Parker, Ikea, and Hoka, have also harnessed the power of AI and web3 technologies to enhance their virtual try-on and in-app AR experiences. By enabling customers to "try it before they buy it," these brands effectively reduce return costs and significantly enhance customer satisfaction. As we know, satisfied customers are the most loyal, and brands with a loyal customer base have a competitive edge. The future of e-commerce is poised for a remarkable transformation through the seamless integration of blockchain and AI, unlocking unparalleled virtual try-on experiences and creating truly immersive shopping journeys that captivate and delight customers.

The future of e-commerce

Commerce is changing. Customers’ expectations are not the same as they were 5 years ago. Now is the time for brands to seize this transformative potential and revolutionize the way consumers engage with and experience e-commerce or risk being left behind.

As the boundaries of e-commerce are pushed and the capabilities of AI and web3 are fully harnessed, we can expect a new era of e-commerce that drives revenue growth for businesses and cultivates deeper and more meaningful connections between consumers and brands. The convergence of blockchain and AI technology will be the catalyst for this revolution, introducing three core use cases that will redefine the online shopping experience: co-creation, proof of custody, and immersive e-commerce.

Decasonic is thrilled by the potential of these use cases, along with the many of other commerce applications offered by web3 and AI, that will undoubtedly foster immersive shopping experiences and cultivate brand loyalty. As investors in this field, we are dedicated to supporting visionary founders in bringing their groundbreaking products to market. If you or someone you know is actively building in this space - get in touch with us. Together, let's shape the future of e-commerce and revolutionize the way consumers engage with brands.



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