Technological innovations aim to add value to existing ideas and ways of doing things. This helps to make things better and industries to improve. One of the major changes happening right now is the incorporation of NFTs into e-commerce.
What are NFTs?
NFT is a popular acronym in the decentralized web that stands for Static Token. It represents a one-of-a-kind, one-of-a-kind digital piece that cannot be exchanged for its unique features or characteristics.
An NFT can be a portrait, piece of art, music, file, GIF, videos, memes, etc. Digital objects qualify as NFTs and must be registered on a blockchain network where their details are recorded on an immutable public. Ledger is often referred to as distributed ledger technology (DLT).
What is Ecommerce?
Traditionally, businesses traded with consumers either through a physical proxy or directly. Such transactions include the buying and selling of goods and the exchange of services. This was a common way of doing business before the advent of the Internet, which gave birth to online sales outlets, otherwise known as eCommerce.
Ecommerce refers to the business activities that take place or are conducted on online platforms. It involves manufacturers, distributors, retailers and consumers buying and selling online. This concept of buying and selling can be B2B, B2C, C2B or C2C.
How NFTs are changing e-commerce
The frenzy of NFT adoption in both centralized and decentralized spaces makes it one of the most popular blockchain tools. Many industries and sectors are looking for ways to find a use case for this novel technology. One of these is the ecommerce sector, where NFTs pave the way for added economic value.
NFTs are helpful for e-commerce in the following ways.
1. NFTs as a digital representation of your goods
Since NFTs are digital representations of different items, you can combine NFTs with your item or merchandise as an e-commerce company.
Such NFTs serve two purposes:
- As ecommerce is an online distribution where products are ordered and shipped, shipping products to consumers can take days, weeks or months depending on the location. Having an NFT of your products delivered to consumers instantly assures them that their physical goods are on their way.
- Instead of waiting for the physical product to arrive, you can use an exclusive copy of the NFT for each product purchased. You can use this to brag about your brand and ownership of your goods, which can be easily verified on the blockchain network. Nike, Addidas, Gucci and other brands are already using this.
- The NFT version of your products can serve as an advertising tool in the Metaverse where the physical and virtual worlds meet.
2. Taking your ecommerce business to Metaverse
The Metaverse represents a virtual world where people can exercise their imagination. Beyond that, it’s a virtual economic space where different forms of avatars are used. These tokens are NFTs. So getting an NFT copy of your product you can bring your e-commerce business to Metaverse, own a store and market your products.
Famous brands such as Adidas, Gucci, Nike, Louis Vuitton, Burberry, Tommy Hilfiger, Samsung, etc. already have a shop in Metaverse.
3. Transactions as a means of verification
Products with NFT copies can be easily traced and verified through public ledgers where NFTs are registered. As each product is assigned to an NFT, the number of products and issues can be easily monitored and officially verified.
This model closes the door to counterfeit products by making it easy to trace and verify ownership of products and editions by copying your products and checking transaction records.
4. Quick satisfaction for users
Having NFT copies of your product means that consumers pay for one product and get two. You pay for the physical product and get an additional NFT version. This instant gratification will make consumers stick with your products and the brand will rain.
5. Collect as loyalty
NFTs can be given to VIP users as a special collection. Depending on your brand’s capabilities, this can be replaced with coupons or souvenirs, distributed quarterly or annually to loyal customers or consumers with high levels of patronage or high purchases.
6. As an inventory tracker
NFTs can effectively help your eCommerce business manage your inventory, regardless of size. When you load NFT on the blockchain network, you choose the number of NFT to be produced, which will be the number of unique products you have in stock.
Once this is done, the record is immutable on the blockchain network where you mint, so you can easily tell the difference between your physical inventory and the NFTs you mint.
7. As a pre-order device
NFT collections can be made as a pre-order for a specific product. This can be used to limit or resolve excessive orders.
As a brand, if you plan to produce a product but aren’t sure whether consumers will accept it, you can issue NFTs in a certain segment so that each NFT represents each product. This entitles each owner of such NFT to a comparable product. With this, you can control your production and reduce overproduction costs.
To avoid over-orders, once you produce your products, you can spend the corresponding NFTs. Once your NFTs are sold or distributed, that will be marked “out of stock” for such product.
8. Marketing your products and brands to more consumers
As NFTs are becoming popular due to their widespread adoption, pairing them with your physical goods will market your products and brand to new consumers who want to have a unique brand identity.
Consumers are indirectly marketing your brand by showing up on social media; This will lead to more demand and sales for your products. Apart from all these, you can list your NFTs on marketplaces specially designed for NFTs. This is similar to decentralizing marketing while running more advertisements and promotions on your e-commerce outlet.
NFTs probably cannot replace physical goods; You can only add value to existing ideas and create more economic strength. The application of NFTs goes beyond the highlighted use cases for e-commerce. You should find the ones that suit your e-commerce business and use them.
It is important to note that being an early bird gives you a high ranking among your peers. Big brands are using and incorporating NFTs into their businesses and paying off.
Examples of world famous products using NFTs:
- JP Morgan
- Ray Ban
- Dolce & Gabbana
- Louis Vuitton
- Tommy Hilfiger
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*All investment/funding opinions expressed on NFT Plazas are derived from the personal research and experience of our site moderators and are intended as educational material only. Individuals should thoroughly research any product before making any investment.
Technical writer, enthusiast for all things blockchain and the decentralized world.