The Web3 rightshifting

The last time I wrote about retail x Web3 in this newsletter was almost a year ago. Back then, my thesis was that there are only two types of retail brands that can successfully build in Web3:

• The behemoths that lean into Web3 to sustain the legacy consumer’s attention and, in doing so, bring new audiences to the ecosystem.
• The challengers that live and breathe Web3. For these brands, Web3 is not an “activation,” but a core piece of their CX and acquisition strategy.

Anyone who sits in the middle either does not have the gravitational pull to attract a meaningful audience to their Web3 experience or is not sophisticated enough to leverage Web3 in a way that feels authentic to its native population.

As often happens with theories, this, too, is an oversimplification—exceptions can and do exist.

In the spirit of keeping myself accountable, today’s newsletter is dedicated entirely to one such exception—KIKI World. Launched last year, KIKI caught my attention for two reasons.

First of all, they have an incredibly thoughtful way of integrating elements of the Web3 cultural and technological landscape into what’s otherwise a very Web2 experience. I (and many others) define these outlier brands as Web2.5.

Secondly, they lean heavily into consumer co-creation, a topic I touched upon briefly in The curation opportunity. Back then, I was covering Sourcerie and the way they used consumer reviews to power personalization at scale across tens of different retail brands. KIKI is a similar concept but applied to product development, which makes it even more appealing.

I believe brands like KIKI are doing God’s work when it comes to making Web3 available to the general population, and I’m very excited today to have Brendon Garner, Co-Founder and Chief Product Officer at KIKI, to tell you about KIKI’s story, their vision for the future of retail and Web3, and how they will enable other brands to build experiences in this space.

Brendon, why don’t you start by telling us a bit about the birth of KIKI World and your journey so far?

Sure! KIKI World was cofounded by three people—Jana Bobosikova, Ricky Chan, and myself—all coming from different backgrounds: I come from enterprise e-commerce, then went into startups, and finally into strategic consulting, Ricky worked on the creative side for a number of really well-known brands, from Violet Gray to consulting for the likes of Google, and Jana has worked in product innovation in the beauty space for over a decade.

We started exploring ideas, and we came to the realization that if we were going to start a brand today, we’d want to do it in a completely different way than how brands have traditionally been germinated: rather than adopting a traditional top-down model, where you do prototyping, market research, build a product, and hope that influencers and customers will do free marketing for you, we wanted to to go community-first. For us, that meant finding a niche of like-minded people and asking, “Okay, what do you actually want? Please let us know, and we’ll reward you for your contributions and make you part of our journey.” We basically wanted to turn our customers into creators.

So we spent the next year just figuring out how to actually make that happen. It took us until May 2023 to release our identity to the public and launch our first product, Pretty Nail Graffiti™. This first launch was a traditionally prototyped product because we wanted to have something to show with the brand launch, but then just about two months later, we had our first co-created product.

What does that co-creation process look like exactly, and how do you reward those who participate in it?

We have this concept of “campaigns,” where we enlist the help of our consumers to create a product together.

Most of them are vote campaigns, where members can vote from a set of options we give them. When you vote, you get rewarded with loyalty points that can be redeemed for discounts, but you also get collectibles that represent your campaign action. For example, anybody who voted for Pearl, the eventual winner of our first campaign, received a collectible. That was basically an NFT tied to a specific Shopify discount script, so if you held that NFT, you could actually redeem it for a discount on our site.

Since that first launch in 2023, we’ve had over 25 of these campaigns, and we’ve grown our membership base to more than 10,000 people.

That’s quite the traction! Can you walk us through the decision to lean into Web3 and NFTs to facilitate this model and how that played out for you?

I’ve been involved in Web3 on the consumer side since 2016, so I was quite fluent in terms of the mechanics, the trends, and the way the space was evolving. Ricky had also done some work with a couple of Web3 teams from a brand and strategy perspective, and Jana was just beginning to get into it. So it was our first Web3 project we built from scratch together, but we all had varying degrees of experience already.

To be honest, we really struggled early on to figure out which path to go down and decide if we should talk to the beauty community or the Web3 community. Web3 communities are very insular in that if you’re passionate about Web3, you are, and if you’re not, you’re not—there’s a very hard divide between the two. It was challenging at first, but we ended up adopting a strategy where we leveraged the channels that were most applicable to each space.

Since our launch, I would say the lines have blended more and more, but when it comes to how we talk about the brand, there’s still bifurcation in terms of the channels, the language we use, and what aspects we focus on.

When you talk to the beauty audience, there are natural channels that you speak to from a social media and digital marketing perspective, and we use those channels to talk about the KIKI business model and the benefits it has for the consumer, abstracting away a lot of the technical complexity.

But then we also dialed in on channels like Twitter, where the Web3 community is much more active and where we had already built a lot of connections. When we speak to that more technical audience, we can definitely talk a bit more about what’s going under the hood and the kind of impact it has. What we’ve experienced is that the Web3 community has a desire to be seen as more approachable and applicable to a wider audience, so we’ve been seeing a lot of success with that messaging.

The one challenge there is that Web3 is still a new and evolving space: the peaks and valleys are very real, and so is the general perception of it, and so we do our best to focus on the value we’re creating.

What brands do you think have done a great job of integrating Web3 and retail, and what did they get right?

I would say there are two types of brands operating in Web3 right now: on one hand, you have brands leaning into Web3 for individual activations. Ralph Lauren recently did a collab with a Web3 membership community called Poolsuite, for instance—if you had a Poolsuite NFT, you had access to exclusive merchandise at this Ralph Lauren event in Miami. You also have Kith, which produced a collection for Invisible Friends. NARS and e.l.f. have also worked on some interesting activations over the years.

On the other hand, you have brands that are leaning much more heavily into the space through permanent initiatives. As an example, Louis Vuitton has VIA, an on-chain membership program that allows members to unlock exclusive perks through digital collectibles. Jeff Staple has the STAPLEVERSE, which focuses much more on community and product co-creation.

There’s a lot of building going on right now, but there’s also a lot of, okay, what’s the right path to actually make this a part of our core offering?

In that sense, I think Starbucks did a great job with their rewards program. They’ve had challenges, but they have managed to really abstract away the complexity of Web3 and provide value in a way that’s familiar to their audience: you do something, you earn something. They didn’t overcomplicate the process, and it doesn’t require you to be technically sophisticated.

In general, for retail brands trying to integrate anything that’s blockchain-related, I think the goal is still to make it feel like a very familiar experience to your customers, make it something that you can commit to executing, and show results over time. You don’t have to do everything at once, and I think that’s probably why some of the earlier Web3 programs had challenges: they were just trying to do too much.

Hopefully, we can help these brands with some of the tools we’ll be announcing later this year.

Tell us about that! What can we expect from KIKI this year?

There’s a heavy investment in infrastructure right now. Obviously, the physical product is very important to us, not only because of the value it creates for the consumer, but also because of the experience we’re accumulating and the opportunity to bring that experience to other brands and other creators.

So if you go to our website today, we just launched a co-created product called Chipped. We’ll be doing more campaigns with other creators to create customized versions of their products just for our audience, but we’re also taking a lot of the tools we’ve developed for our own KIKI brand, plus some new ones we’re creating, and turning them into software that can be leveraged by other parties to engage with their audience and reward them in new ways.

The other thing we’re working on is community. Right now, everything is pretty much abstracted away, but we’d like to offer KIKI members the ability to interact with each other and engage more, so stay tuned!