On the 11th of March 2021, Beeple, a digital artist, sold a Non-Fungible Token (NFT) at USD 69 million. To lay the chips, this is where we are at with NFTs! Check out Christie’s Twitter account on this day. Now, there are talks about using NFTs as a robust digital asset and tool in the eCommerce space. Below is a brief refresher on NFTs.
A quick run-through into NFTs
NFT is a contraction that stands for Non-Fungible Token, a cryptographic asset recorded on blockchains. Each NFT has a unique identification code and metadata. And hence, an NFT cannot be traded or exchanged. With that said, an NFT is a digital collectable.
Why the eCommerce Sector?
eCommerce trading platforms allow people to buy and sell items over a digital medium such as the Internet. Several eCommerce platforms are working on developing NFT integration solutions. One development company that assists with such integration is the Blockchain App Factory. In eCommerce, the trade of products and services involves several third-party authorities. Due to these intermediaries, the distribution of commissions is highly skewed. Deploying NFTs, firstly, shall help eliminate the need for third parties. Secondly, an NFT can be a digital representation of physical items. Take, for example, the CryptoKicks launched by Nike.
Application of NFTs in the eCommerce sector
NFTs can help gain insights into what customers think. This application is priceless as businesses can reward customers for participating in surveys. Also, NFTs can be used for beta-testing or giving specific individuals exclusive voting rights in the brand product development journey. According to Chris Cantino, Partner at Color Capital, NFTs are great for getting insights and tracking and maintaining customer relationships. Also, participants can get early access to product releases and profit-sharing.
Selling digital goods
NFTs can help eCommerce brands better their renderings through unique brand experiences. The streetwear brand, The Hundreds, has done this with its Adam Bomb Squad NFTs. The co-founder, Bobby Kim, posits that the brand is evaluating ways for tying NFTs with branded experiences.
These are crucial to eCommerce businesses. Strategist Micheal Miraflor says that brands can use NFTs for loyalty programs. Individual holders can get exclusive price deals, for instance. The NFTs can serve as loyalty devices like physical or digital membership cards. Going ahead, NFTs can become ‘proof of purchase’ or ‘proof of membership’.
Exclusive drop access
The past two years have witnessed the rising popularity of Drop Culture. In short, the drop culture is of two types. It can either be a scarcity in quantity or that in availability. The former stems from an intentionally limited production, whereas the latter comes from a limited-time purchase window. However, both are methods of special release product offers. What NFTs can do here is give customers exclusive access to such drops.
NFT platforms that can help with eCommerce applications
Some NFT platforms that eCommerce companies can look into for integration are NFTify, Splyt, Pandora and Drops.
Into the Future
According to the Forbes Council, NFTs could replace the SKUs with blockchain-based analogue. With NFTs, the profit-sharing system shall become more equitable, especially for emerging brands. What’s more, NFTs can help with data tracking. Also, they reflect the consumer culture of scarcity. The more challenging it is to obtain something, the more desirable it becomes.