Technological innovations aim to add value to existing ideas and ways of doing things. This helps to create better ways of doing things and for industries to evolve. One of the major changes happening right now is the incorporation of NFTs into eCommerce.
What are NFTs?
NFT is a popular acronym in the decentralized web which stands for Non-Fungible Token. It represents a tokenized, one-of-a-kind digital piece that can’t be exchanged with another of its kind due to its unmatched features or characteristics.
An NFT can be a portrait, a piece of art, music, files, GIFs, videos, memes, etc. For digital objects to qualify as an NFT, they must be minted on a blockchain network where their details are recorded on an immutable public ledger often called Distributed Ledger Technology (DLT).
What is eCommerce?
Traditionally, businesses transacted physically by proxy or directly with consumers. Such transactions involved buying and selling commodities and exchanging services. This was the conventional way of transacting business before the advent of the internet, which birthed online sales outlets, otherwise known as ecommerce.
Ecommerce represents all forms of business executed or transacted on online platforms. It involves producers, distributors, retailers, and consumers buying and selling commodities online. This concept of buying and selling could be B2B, B2C, C2B, or C2C.
How NFTs will Transform eCommerce
The frenzy of NFT adoption in both centralized and decentralized spaces makes it one of the most popular blockchain tools up to date. Many industries and sectors have been seeking ways of finding a use case for this novel tech in their industries. One of these being the eCommerce sector, where NFTs can pave the way for additional economic values.
NFTs are instrumental to eCommerce in the following ways:
1. NFTs as a digital representation of your commodity
Since NFTs are a digital representation of various objects, you can pair NFTs with your goods or commodities as an eCommerce enterprise.
Such NFTs will serve two purposes:
- Since eCommerce is an online sales outlet where products are ordered and shipped, shipping products to consumers will probably take days, weeks, or months, depending on localities. Having an NFT of your products to give to consumers immediately assures them that their physical goods are on their way.
- Rather than wait till the physical product is delivered, they can start using the NFT replica, which is exclusive to each product purchased. They can use this to brag about ownership of your brand and goods, which can easily be verified on a blockchain network. Nike, Addidas, Gucci, and other brands are utilizing this already.
- An NFT version of your products can also serve as an advertisement tool in the Metaverse, where physical and virtual worlds meet.
2. Taking your eCommerce business to the Metaverse
The Metaverse represents a virtual world where people can experience their imaginations. Beyond this, it is a virtual economic space where avatars of various forms are used. These avatars are NFTs. So having an NFT replica of your product can take your eCommerce business to the Metaverse, where you can own a store and market your products.
Notable brands like Adidas, Gucci, Nike, Louis Vuitton, Burberry, Tommy Hilfiger, Samsung, etc., already have shop space in the Metaverse.
3. As a means of authenticating transactions
Products with NFT replicas can be easily traced and authenticated via the public ledger where the NFTs have been recorded. Since each product will be assigned to an NFT, the number of productions and editions can be easily monitored and authenticated publicly.
This model will shut the door on counterfeit products mimicking your products and verifying transaction records, making it easy to trace and verify the ownership of products and editions.
4. Instant gratification for consumers
Having NFT replicas for your product means consumers pay for one commodity and get two. They will pay for the physical product and get an additional NFT version. This instant gratification will make consumers stick to your products and brand come rain come shine.
5. As a loyalty collectible
NFTs can be given to VIP consumers as exclusive collectibles. Depending on your brand’s capabilities, this can be replaced with coupons or souvenirs, distributed quarterly or annually to loyal consumers or consumers with a large volume of patronage or high purchases.
6. As an inventory tracker
NFTs can effectively help your eCommerce business manage your inventory irrespective of the magnitude. When you mint NFTs on a blockchain network, you choose the number of NFTs to be minted, which will be the number of the particular products you have in stock.
Once this is done, the record is immutable on the blockchain network where you mint, so you can easily spot discrepancies between your physical inventory and the number of minted NFTs.
7. As a pre-order tool
NFT collections can be minted as a pre-order for a particular product. This can be used to curtail or address excess orders.
If, as a brand, you intend to manufacture a product but are unsure if consumers will welcome it, you can mint NFTs in a particular unit such that each NFT will represent each product. This will make every holder of such NFTs entitled to an equivalent product. With this, you can control your production and cut expenses on excess production.
To curtail excess orders, once you’ve manufactured your products, you can mint equivalent NFTs. Once your NFTs have been sold out or distributed, that will mark an “out of stock” for such product.
8. Marketing your products and brands to more consumers
Since NFTs are becoming popular due to their wider adoption, pairing them with your physical goods will market your products and brand to new consumers willing to have a unique piece of your brand.
Consumers showing them off on social media will also market your brand indirectly; this, in turn, brings more demand and sales for your products. Aside from all these, you can list your NFTs on marketplaces specifically meant for NFTs. This is similar to taking marketing to the decentralized space while running additional commercials and adverts on your eCommerce outlet.
Being an Early Bird Won’t Hurt
NFTs can’t possibly replace physical goods; they can only add value to existing ideas and create more economic strength. The application of NFTs to eCommerce goes beyond the highlighted use cases; you must find the ones that suit your eCommerce enterprise and utilize them.
It is worth noting that being an early bird ranks you higher among your contemporaries. Big brands are using and incorporating NFTs in their businesses which are paying off.
Source NFT Plazas