MARKETING 2.0 IS DEAD, LONG LIVE MARKETING 4.0! - 1

After working for 6 months, I have finally submitted my end-of-studies thesis! I chose a theme that is as promising as it is new: Web 3 and its relevance in digitizing marketing strategies in the luxury retail industry.

While pursuing a Master's in Digital Marketing, Web 3 is a subject that is imperative to study today. However, it's true that the topic is as intriguing as it is challenging to pinpoint and summarize in a thesis. Nevertheless, I opted for this subject, and with my writing partner, we encountered difficulty in finding the necessary literature and testimonials because it is still very new and generally not widely integrated into brand strategies.

Thus, after a year of studying it during my second year of specialization and six months of researching and writing about it for my thesis, I have decided to share with you what I have learned.

COMMANDMENT 1: “A COMMUNITY YOU SHALL BUILD”?

The consumer community has been defined and described by a lot of sociologues before us (such as Füller, Matzler, and Hoppe but also Durkheim, just to name a few). In essence, a consumer community is a gathering of individuals who share a mutual attraction and unite to pursue a shared interest or passion. They form social bonds, create shared identities, and collaborate towards common goals, such as obtaining information, offering mutual support, and protecting their interests. For a company, establishing such a community around its brand is highly beneficial. It allows the brand to forge strong connections with consumers, ultimately bolstering their loyalty.

Philip Kotler says that we're currently in the Marketing 4.0 era, and we're moving towards 5.0. The landscape has been profoundly shaped by technological advancements and unprecedented connectivity. This transformation has revolutionized our approach to marketing, placing customers at the forefront of brand promotion. Unlike in the past, where brands held much of the narrative power, today's marketing dynamic is characterized by a more active customer journey.

This new paradigm empowers customers, giving them unprecedented control over their interactions with brands. Through social media platforms and other digital channels, customers not only influence their own purchasing decisions but also serve as influential advocates, potentially reaching vast networks of individuals at different stages of the buying process.

Kotler's introduction of the "5A's of Marketing" in 2022 further underscores this shift in marketing philosophy. It provides a structured framework to understand and leverage this evolving customer-centric approach:

• Awareness (Becoming Aware): The initial stage involves capturing the customer's attention and making them aware of the brand or product.
• Appeal (Generating Interest): Once aware, the aim is to pique the customer's interest, encouraging them to explore the brand further.
• Ask (Engaging in Inquiry): Customers are encouraged to ask questions, facilitating a deeper understanding and interaction with the brand.
• Act (Making a Purchase): This crucial step involves converting interest into a concrete action, ultimately leading to a purchase.
• Advocate (Recommendation and Promotion): The final stage centers on turning satisfied customers into advocates who actively promote the brand within their own social circles.

In this customer-centric model, brands must not only offer quality products or services but also foster meaningful connections and engagement with their audience. By recognizing and adapting to this evolving environment, businesses can effectively navigate the Marketing 4.0 and 5.0 eras, ultimately thriving in an environment where customers wield unprecedented influence.

In fact, innovation and technology are orchestrating a complete shift in the traditional power dynamics, which had previously favored companies. This transformation is tilting the scales towards a more egalitarian relationship with the consumer. Once again, the consumer takes the wheel, reclaiming the central role in decision-making processes.

Therefore, brands have a unique opportunity to cultivate a new level of loyalty. This loyalty extends beyond mere transactions; it hinges on whether users are willing to passionately champion and defend a brand. By facilitating meaningful exchanges and connections among consumers, a brand can elevate its status from being a mere product or service provider to a cherished member of a community.

In this context, customers transcend their traditional roles and become advocates, imbued with a genuine passion for the brand. They actively participate in discussions, share positive experiences, and even mobilize others to join the brand's ecosystem. This transformation is not only a testament to the brand's value but also a powerful demonstration of the community it has managed to foster.

This new breed of advocacy-driven loyalty is invaluable. It creates a ripple effect, as advocates become influential ambassadors, spreading the brand's message far and wide within their networks. Their endorsement carries a weight that no marketing campaign can replicate. It's a testament to the brand's ability to resonate on a deeply personal level with its audience.

In essence, this phase marks a shift from transactional relationships to meaningful connections. It's about building a community that shares common values and experiences, united by their affinity for the brand. Brands that successfully navigate this phase not only secure a loyal customer base but also gain an army of advocates who are committed to the brand's success and longevity. This dynamic, in turn, fosters a self-sustaining cycle of loyalty, advocacy, and community-building that propels the brand to new heights of success.

To achieve this, brands will leverage Web 3 technologies to gain deeper insights into their community members. As Owyang detailed in his 2008 publication "Understanding Gartner's 'Generation Virtual'", Gartner delineated four tiers of community engagement:

• Creators, who are particularly targeted by brands, are characterized by high engagement and the creation of content that can help brands develop collections.
• Contributors are active, expressing their opinions and reacting to the creations of designers. However, they don't create, they simply follow. Contributors are also of interest to brands, which will try to reach them with personalized offers and by keeping in regular contact with them.
• Opportunists only participate in exchanges for their own benefit. For example, they will only participate to form an opinion about the product, at the very beginning of a purchasing process. Brands will use Web 3 tools to turn these community members into contributors.
• Lurkers, who are typical of internet communities, are people who regularly follow community interactions but never take part in them. They make up the vast majority of online communities.

Web 3 will therefore enable brands on the market to get to know their consumers better. This better knowledge will enable brands to offer more appropriate solutions for creating or consolidating a community of consumers. Building this community of consumers has a direct and positive impact on the sales of a luxury brand.

As an example, we can use the simple case of NFTs and their development over the last few years.?

The hype around NFT very quickly split the community and allowed users (and established members) to see which project was really being thought through rather than just being 'followed'.?

On the one hand, there were groups like the Bored Ape Yacht Club (BAYC), an NFT collection project created by American animation studio Yuga Labs that gained huge popularity in 2021. It consists of 10,000 NFTs, each representing a "Bored Ape". What we're talking about here are the creative and contributory levels of involvement in a community, because as much as each NFT created is unique and has distinct characteristics, such as its appearance, accessories, backgrounds, etc., owning one of these Bored Apes is just as important. Owning one of these Bored Apes gives holders exclusive access to events and an online community. This can include rallies, virtual meetings, and other activities organized by the BAYC community. However, just because the value of NFTs is subject to speculation and can be volatile, this does not mean that the club has stopped creating or injecting new unique NFTs. As we saw recently, due to the sluggishness of the NFT market, we're seeing a real drop in the floor price (which is still around ETH 37.5 - a substantial sum for many), which is nothing compared to the prices these digital works could fetch last year. We're talking about an 83% drop from its all-time peak. However, the BAYC community remains very active on social networks and online discussion platforms, helping to create a strong culture and identity around the project. This has given rise to a thriving ecosystem of related projects, collaborations as well as community initiatives.

Many brands have tried to capitalize on the community NFT trend, but few have succeeded in generating genuine enthusiasm within their community for their project. In other words, some brands have simply put an animated or 'cartoon' NFT on the market, capitalizing on the popularity of their brand, without really bringing any concrete benefit to the buyer. This not only damages the brand's reputation but also leads to a depreciation in the value of its NFT. An NFT project is considered to have failed when its initial price loses 60% or more of its value. These brands are quickly perceived as opportunists and profiteers within the NFT community, highlighting the lack of understanding of the fundamental codes of the Web 3 application and the establishment of a solid community on the part of the people behind the project.

Take the recent example of Porsche. In January 2023, the brand decided to enter the NFT market by celebrating its iconic 911 model with around 7,500 NFTs put on sale at a price of $1,475 (or 0.911 ETH each). This sale price has sparked outrage in the crypto community, both on Twitter and in specialist blogs, given the current context of the NFT market. The project was criticised as a simple 'cash grab' with no real overall interest. Despite this, the brand maintained its position and launched the project. Unfortunately, the project quickly proved to be a failure, with the NFTs being quickly resold (which is generally not a good sign for a newly shared project). Porsche had to review its strategy shared with the help of a tweet on X, formerly Twitter, and put a stop to the creation of new NFTs.

Hence, it's crucial not to approach the Web 3 trend with a purely opportunistic mindset, focusing solely on quick-profit projects often dubbed as "cash grabs". As we could have seen the Web 3 community is highly discerning when it comes to such endeavors and generally regards them unfavorably.

Web 3 presents an opportunity for brands to strike a balance between transactional elements (like e-commerce and Web 2 digital experiences) and access to unique, physical-world interactions. Within this community, members gain entry to exclusive services and events. For example, having worked on the subject of its use in the fashion industry; luxury brands could entail an invitation to a cutting-edge digital fashion show, while for retail brands, it might mean participating in competitions and voting to help shape a product line.

In this paradigm, members transcend their role as mere customers, assuming a central position in a distinctive and meaningful relationship with their beloved brand.?