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How Non-Fungible Tokens (NFTs) Are Transforming The Ecommerce Industry?
Explore here the impacts of Non-Fungible Tokens (NFTs) in the Ecommerce Industry.
If you are the one surviving in the blockchain space, you might know the term NFTs, the nonfungible tokens that are most booming & trending in the crypto space. These NFTs have huge potential to transform major industries such as Fashion, Art, Gaming, Ecommerce, and more to the next level.
Here let us know the impacts of NFTs in the Ecommerce Industry which makes a much bigger transformation in E-commerce.
A Brief Introduction to NFTs
Non Fungible Tokens, NFTs are digital tokens or digital assets that are backed with blockchain technology and this can be purchased through cryptos or digital wallets.
These NFTs can be utilized to represent any assets such as JPEG or GIF files, audio, digital arts, recording, or anything else.
By purchasing an NFT, a person buys the complete ownership of that particular token and not just the license to access it. This makes them retain ownership unless they hold the token without selling it to a new person.
Refer to our previous article to know more about this NFT, which is the next booming thing after DeFi in the crypto space. -> Non Fungible Tokens(NFT) - The Next Big Thing After DeFi
Why do NFTs sound heavy in recent air?
From a little-known term in blockchain, these NFTs have become one of the hottest trends in the art, fashion, and gaming world.
Within a few months, the market has been inundated with NFTs that feature everything from videos to digital works by famous personalities like LeBron James, Grimes, and more.
The graphic artist Beeple sold a digital file at Christie’s, which is the third-highest price paid for work for an eye-watering $69.3 M.This is a big surprise that NFTs caught the eyes of major brands and many brands like Gucci have planned to bring their own NFTs for circulation.
Since more businesses sell real-world products for cash, selling through NFTs sets a trend that trades digital commodities.
How Can These NFTs Be Used?
As these NFTs have huge potential, you can use this to increase transparency and gain ownership. Here let us deeply look at how these NFTs can be used from the perspective of a creator, buyer & brand.
Brands become valuable commodities by developing widespread recognition, even when it's divorced from something which is tangible.
This is because the impression of certain goods can still confer ownership with high standards. When paired with the scarcity of the NFT market, brands inflate the perceived value of the product.
As said, the appeal of NFTs is they are perfectly collectible and the blockchain makes it easy for verification & ownership. This means that buying NFT gives you the rights to bragging rights to the real version of any asset which is considered desirable.
The major issue creators face is receiving credit or payment for their work which is increasingly blurred as assets. This NFT allows creators & artists to distribute their work in a way that retains usage rights and ownership. Even if it is sold to another individual, the blockchain network will verify the identity of the creators. NFTs allow creators to collect royalties each time an artwork changes hands.
NFTs in Ecommerce Industry
E-Commerce is an online platform that lets individuals buy, sell goods through digital mode using the internet. This concept of E-Commerce can be models such as Business to Business (B2B), Business to Consumer (B2C), Consumer to Consumer (C2C), Consumer to Business (C2B), and so on.
The use of NFTs in Ecommerce is becoming a trend among the crypto community and many eCommerce platforms started using NFTs. The utilization of NFTs in Ecommerce can help the online retail and eCommerce industry to drift in a path with high ROI and ever-increasing business growth. Thus NFTs transition into tokenizing the physical goods and virtual items is completely a new form of the source which generates revenue opportunities.
How are NFTs used in Ecommerce?
Listed here are how NFTs can be used in eCommerce platforms.
1. Instant Gratification
Ecommerce rapid delivery will never be able to compete with the immediacy of buying in-store and taking products the home. Even with the same-day delivery options, consumers feel the friction of delayed gratification which means it becomes harder to compete for brands that cannot meet such tight delivery deadlines.
The hybridized product catalog of NFTs & physical goods allows eCommerce merchants to fill this gap of experience. When such tangible products come with virtual NFT, customers can take instant ownership. Even there are several days for delivery of actual items, its equivalent virtual item allows consumers to engage with their purchase at a more creative level.
With free shipping or storage costs, merchants can increase the scope of their product catalog with an increase in profit margin on every sale.
2. Product Verification
With the blockchain-based verification systems, these NFTs become appealing in industries that frequently struggle with an undercut in this competitive online marketplace.
For Example Couture designers are undermined by fast fashion brands.
If garments use NFTs for both personal signature & deed of ownership, their perceived value will increase.
3. Twinning Physical Products with Non-Fungible Tokens
Pairing NFTs with real-world products can offer brands a way to appeal to early adopters as well as a huge traditional customer base.
For Example :
Nike makes strides into NFT space by securing a patent for NFT based line of sneakers called "Cryptokicks".
Thus, Nike will pair real-life sneakers with NFT counterparts, which allows customers to enjoy purchases in unique ways of digital artworks.
4. Value Added Loyalty Programs
A way to incentivize repeat purchases, there are loyalty programs in many e-commerce from the beginning. According to Retailwire, more than 40% of consumers do not join loyalty programs because of a lack of value.
To make a loyalty program successful, it must offer genuine value and this means flexibility in the way customers redeem their hard-earned points.
Thus, offering NFTs and NFT based collectibles adds an extra dimension to loyalty programs with unique offerings that consumers can never obtain anywhere else. This may create exclusivity and adds value for the loyalty program by not only limiting monetary changes
5. Addition of value to NFTs with AR
AR, Augmented Reality has already been applied in eCommerce, particularly D2C brands that lack physical storefronts for showcasing products.
For Example, Waby Parker has added high value in 2017 through the development of an AR app that allows prospective customers to "try on" different styles of eyewear before they make a purchase.
These NFTs allow merchants extra steps b offering 3D visualization of their products themselves.
Benefits of NFTs in Ecommerce
.Listed here are the key benefits of NFTs in the Ecommerce industry
1. Offers Instant Gratification for online commerce merchants
2. NFTs adds value to the loyalty program increases trust
3. The verification of Products and design made simple & easy
4. Use of AR to add value to NFTs and the eCommerce industry.
5. Blockchain NFTs offer a way to magnify the traditional customer base.
Real-Time Example of NFTs in Ecommerce
1. Shopify now allows its e-commerce customers to directly sellNFTs on their platform.
2. Australian startup Neuno, developed a platform that allows customers to buy wearable NFTs through credit cards.
3. Nike offers NFT based line of sneakers known as Cryptokicks.
Future of Ecommerce with NFTs
The challenges in the adoption of NFTs in E-Commerce are highly obvious since only a few consumers own any form of cryptocurrencies in recent times. Until the greater understanding & trust in blockchain systems, this NFTss will continue to have a niche appeal.
Still, there are some promising developments in the area of applying NFTs in eCommerce. The removal of barriers in blockchain can set a big way to the use of NFTs not only in e-commerce but also in other industries too.
Let us apply NFTs in our Ecommerce Platform to uplift our eCommerce business growth and customer base.
Hoping these NFTs would soon be adopted in every Ecommerce Platform for better transformation.
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