NFTs: The Future of Online Shopping
The use of non-fungible tokens has introduced a new way of conducting transactions in e-commerce beyond traditional currency. In 2021, the usage of NFT in the online shopping industry became more widespread. Retail brands such as Gucci, Nike, Adidas, and Gap have adopted the use of non-fungible tokens as a way to gain consumer attention in the metaverse. With $24.7 billion worth of NFT trading volume in 2022, it’s clear why retailers are investing in this technology. NFT has the potential to revolutionize the e-commerce industry by introducing new ways to tokenize assets and conduct transactions.
This article delves into how NFTs are changing the online shopping industry and creating exciting opportunities for retailers to attract consumer attention.
NFts in e-commerce: How do major retailers use NFTs to drive sales?
NFTs are particularly useful for eCommerce businesses in creating a unique and engaging digital representation of their physical products and providing additional value through digital experiences, such as virtual try-ons, digital bundles, and more.
Though NFTs have brought new opportunities for customer engagement, loyalty, and community across various industries, they hold special potential in the fashion industry. 17% of the brands listed in the Vogue Business Index have already implemented NFTs in their business model.
Brands turn their physical products like shoes, shirts, and other stuff into an NFT to generate cross-selling opportunities. Apparel brands like Gucci and Louis Vuitton have created digital versions of their clothing lines, while Dolce & Gabbana created an NFT collection that sold for nearly $5.7 million.
Other examples of NFT brand partnership & collaboration are as follows:
- Nike acquired the famous NFT sneaker brand RTFKT to wet its feet in the NFT market. These virtual sneakers can be used in video games, combined with other virtual shoes to create unique versions, and also linked to physical versions of the shoe. Nike plans to expand their product line with more virtual products and experiences, including exclusive pre-launch product releases for loyal fans.
- Adidas launched their NFT collection as a collaborative project between Adidas Originals, GMoney, Bored Ape Yacht Club, and PUNKS Comic. They also purchased a Bored Ape named Indigo Herz and dressed it in a custom Adidas-branded tracksuit. 30,000 NFTs were sold for around 0.2 ETH, or around $765, and sold out in a matter of hours, generating $22 million for Adidas.
- Visa made a statement on its support for NFTs by purchasing a well-known CryptoPunk, signaling its interest in the technology and its potential applications.
- Puma teamed up with four NFT projects that revolve around cats for their entry into the world of NFTs
- Shopify also collaborated with Doodles, an NFT project, to showcase its NFT selling capabilities.
How can NFTs be used in the online shopping industry?
Non-fungible tokens provide an innovative way for retailers to sell virtual merchandise by connecting the physical and digital worlds. These digital products can be used to bundle additional value, create multi-sensory experiences, and offer instant gratification for virtual versions of physical purchases. Additionally, NFTs can help businesses build a loyal community, increase brand engagement, and create new revenue streams through the sale of virtual and limited-edition products.
Moreover, NFTs have the potential to eliminate the need for third-party intermediaries and reduce costs for both buyers and sellers. Traditional methods of transactions and marketplaces often involve high commission fees for intermediaries. With NFTs, sellers can set prices above their cost without affecting sales, and buyers can receive their purchases instantly.
Despite these benefits of NFT in e-commerce, there are many other ways that can help brands use NFTs to further improve the online shopping experience for consumer attention.
1. Enable one-click check-out
As NFTs gain more mainstream acceptance, businesses need to be ready to meet customer demand for NFTs and crypto. With the integration of NFTs and cryptocurrency, merchants can provide a seamless buying experience for customers interested in using crypto for physical goods or vice versa. As a merchant, you can offer one-click checkout for consumers who want to use cryptocurrency as payments for physical goods or vice versa. With Wyre’s technology, Bolt, merchants can easily offer cryptocurrency transactions to their customers.
2. Product pre-launch
Selling NFTs as a pre-launch strategy for new products can help create excitement and generate buzz among consumers. This can be done by offering early access NFT tokens to customers. Shopify allows merchants to sell NFTs directly from their own storefronts, making it more convenient for brands to mint and sell their NFTs. An example of this is the Chicago Bulls who sold NFTs featuring their six World Championship rings.
3. Inventory management
NFTs can aid in inventory management by providing a unique identifier for each asset. This digital representation can be tracked and managed in real time, allowing retailers to know exactly how many units of a product are available for sale at any given time. This allows all parties within the network to easily track inventory levels and restock as necessary.
Another way NFTs can help with inventory management is by allowing retailers to sell virtual products or experiences that don’t have to be produced in advance and can be easily replicated as many times as they are sold. This can help retailers reduce their costs and increase efficiency in their inventory management.
4. Safe transactions
NFTs can help ensure safe and authenticated transactions for online shopping by providing a transparent and traceable history of ownership. By using blockchain technology, the entire history of an NFT, including previous ownership and any changes made to it, can be easily viewed by buyers. It can help prevent fraud and increase trust in online transactions.
Loyalty programs for customers
NFTs can be a valuable tool for eCommerce brands to increase customer loyalty. By offering unique and scarce collectibles, brands can tap into customer insights and create a sense of ownership and exclusivity for customers to add value to their loyalty programs. These rewards could be anything like: discounts and offers, exclusive access to events, new products, and private communities like discord or telegram.
However, obtaining a buyer for an NFT can be more costly than obtaining a buyer for a common item, but the potential reward is greater as the NFT buyer is more likely to increase the value of your business.
Help your customers step into the future
NFTs offer an exciting opportunity for brands to usher their customers into the future by combining online and offline product ownership and fostering a deeper connection between the brand and consumers. However, the experience is still a challenge because NFT is still new for many consumers and brands really need to focus more on the best NFT marketing strategy to create buzz.
If you are a business interested in incorporating NFTs into your e-commerce strategy and in need of a reputable NFT marketing agency, our firm is available to assist. With a decade of experience in the web 3 marketing industry, we have a proven track record of successfully helping clients sell their NFTs quickly, build a strong digital following, and connect with influencers and investors.