NFTs and e-commerce: What to expect in the future

Technological innovations aim to add value to existing ideas and ways of doing things. This helps to create better ways of doing things and that industries can develop. One of the big 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 Non-Fungible Token. It represents a tokenized, unique digital piece that cannot be exchanged for another of its kind due to its unmatched functions or properties.

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 imprinted on a blockchain network where their details are recorded on an immutable public ledger often called Distributed Ledger Technology (DLT).

What is e-commerce?

Traditionally, companies traded physically by proxy or directly with consumers. Such transactions involved the purchase and sale of goods and the exchange of services. This was the conventional way of doing business before the advent of the internet, which created online stores, also known as e-commerce.

E-commerce represents all forms of business conducted or transacted on online platforms. This means that manufacturers, distributors, retailers and consumers buy and sell goods online. This concept of buying and selling can be B2B, B2C, C2B or C2C.

How NFTs will transform e-commerce

The frenzy of NFT adoption in both centralized and decentralized spaces makes it one of the most popular blockchain tools to date. Many industries and sectors have searched for ways to find an application for this new technology in their industries. One of these is the e-commerce sector, where NFTs can pave the way for additional economic value.

NFTs contribute to e-commerce in the following ways:

1. NFTs as a digital representation of your item

Since NFTs are a digital representation of various objects, you can pair NFTs with your goods or merchandise as an e-commerce business.

Such NFTs will serve two purposes:

• Since e-commerce is an online point of sale where products are ordered and shipped, it will likely take days, weeks or months, depending on locations, to ship products to consumers. Having an NFT of your products to give to consumers instantly reassures them that their physical goods are on their way.
• Instead of waiting for the physical product to be 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 your goods, which can be easily verified on a blockchain network. Nike, Addidas, Gucci and other brands already use this.

• An NFT version of your products can also act as an advertising tool in the Metaverse, where physical and virtual worlds meet.

2. Take your eCommerce business to Metaverse

The metaverse represents a virtual world where people can experience their imaginations. In addition to this, there 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 e-commerce business into the Metaverse where you can own a store and promote your products.

Well-known brands such as Adidas, Gucci, Nike, Louis Vuitton, Burberry, Tommy Hilfiger, Samsung, etc., already have shop space in 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 are registered. Since each product will be assigned an NFT, the number of productions and editions can be easily monitored and publicly authenticated.

This model will close the door on counterfeit products impersonating your products and verify transaction records, making it easy to track and verify ownership of products and editions.

4. Instant gratification for consumers

Having NFT replicas for your product means that consumers pay for one item and get two. They will pay for the physical product and get an additional NFT version. This instant gratification will make consumers stick with the products and the brand when it rains.

5. As a loyalty collectible

NFTs can be given to VIP consumers as exclusive collectibles. Depending on the brand’s capabilities, this can be replaced with coupons or souvenirs, distributed quarterly or annually to loyal consumers or consumers with a high volume of patronage or high purchases.

6. As inventory tracking

NFTs can effectively help your e-commerce business manage your inventory regardless of its size. When you mint NFTs on a blockchain network, you choose the number of NFTs to mint, 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 create, 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 characterized as a pre-order for a specific product. This can be used to limit or address excess orders.

If you as a brand intend to produce a product but are unsure whether consumers will welcome it, you can create NFTs in a specific unit so that each NFT will represent each product. This will entitle each holder of such NFTs to a corresponding product. With this you can control your production and cut expenses on surplus production.

To limit redundant orders, once you have produced your products, you can create corresponding NFTs. When your NFTs are sold out or distributed, it 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 use, pairing them with your physical goods will promote your products and brand to new consumers willing to have a unique part of your brand.

Consumers who showcase them on social media will also promote your brand indirectly; this in turn creates more demand and sales for your products. Apart 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 multiple advertisements and promotions on your e-commerce outlet.

NFTs cannot possibly replace physical goods; they can only add value to existing ideas and create more financial strength. The use of NFTs in e-commerce goes beyond the highlighted use cases; you need to find the ones that suit your e-commerce business and use them.

It’s worth noting that being an early bird ranks you higher among your contemporaries. Big brands are using and incorporating NFTs into their businesses, which is paying off.

Examples of world-renowned brands using NFTs:

• • Samsung
  • Coca Cola
  • Hyundai
  • JP Morgan
  • HSBC
  • Balenciaga
  • Adidas
  • Nike
  • Acura
  • Ray-Ban
  • Dolce & Gabbana
  • Gucci
  • Burberry
  • Louis Vuitton
  • Tommy Hilfiger

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*All investment/financial opinions expressed by NFT Plazas are from personal research and experience of our site moderators and are intended as educational material only. Individuals are required to research all products before making any type of investment.

Technical writer, an enthusiast for all things blockchain and the decentralized world.