Last updated - November 10, 2023
Following the sale of a piece of art for $69 million as an NFT in 2021, what had initially been used as a representation of real-world objects in a virtual world quickly became a business phenomenon.
In little to no time, the market was flooded with hundreds of millions of NFTs, which were being sold for thousands and millions of dollars depending upon their rarity. With little knowledge about NFTs, many investors today are looking to invest in them. Soon, people may just need to read a brand’s history to get an idea about NFT.
While large companies like Nike are jumping on board and making the most of this technology, small businesses are also looking for the ideal opportunity to find their niche. Without further adieu, let’s get into how you can integrate NFTs into your eCommerce businesses.
What is an NFT?
NFTs, or Non-Fungible Tokens, are also known as digital assets that represent real or virtual objects, non-exchangeable data units, or digital content. NFTs are non-exchangeable digital assets that were created and held on a blockchain, and they represent a collection of real-world or digital objects.
NFTs, in contrast to cryptocurrencies, cannot be traded for an equivalent good because they are non-fungible. Among the various NFT types, audio, video, photographs, and even NFT papers are some of the most popular.
Why are NFTs Valuable for eCommerce Businesses?
NFTs are a special type of digital asset that, for one thing, provides the owner’s legitimacy, something that was previously impossible. In addition to this, the fact that NFTs are created and stored on the blockchain means they provide users with immutability and traceability, which adds value.
NFTs are now a popular trend for businesses after initially being utilized by artists to direct the sharing and dissemination of their work. The following are some key reasons why brands and enterprises can benefit from NFTs.
- NFTs’ immutability gives eCommerce businesses a sense of exclusivity and legitimacy.
- Due to their rarity, NFTs can make for sensible corporate equity as and when their value significantly increases.
- The development of NFT is a commercial venture. The full cost of producing an NFT is covered by single sale proceeds.
- Purchasing branded and limited-edition NFTs from companies would not only increase brand recognition, but it would also be the biggest customer endorsement.
In addition to the previously cited reasons, the use of NFTs in enterprises would increase as blockchain development became a norm.
Steps to Integrating NFTs into Your eCommerce Businesses
Thorough Research and Development
eCommerce is one of the most successful industries today. This industry has changed consumer buying habits and is predicted to do so in the future. NFTs aim to redefine both the concept of ownership and how commodities are consumed, much to how eCommerce reinvented how people shop.
The term “NFTs” may soon start to emerge in a variety of use cases, even though the majority of its applications are in digital art or collectibles. You might discover that NFTs for eCommerce are poised for growth if you are interested in exploring the NFT marketplace.
When undertaking research and development, it is essential to get customer insights. Businesses may grant specific NFT holders exclusive voting privileges in a brand’s product development roadmap or employ NFTs as a form of payment for customer participation in market research and beta testing.
Provide Pre-Launch Access
A key component of the sales and marketing strategy for new products is generating a buzz about them. Early NFT token access could help build anticipation and achieve tremendous visibility at launch. Early adopters for your brand could grow into a sizable audience.
Shopify now gives merchants the option to sell NFTs straight through their websites. It is significantly simpler than having to mint and sell NFTs via an online marketplace. The first team to do so was the Chicago Bulls, who provided NFTs with the team’s iconic six World Championship rings.
Create and Obtain Collectibles
As digital collectibles, NFTs had their first significant application. With the help of these, firms can create and sell digital versions of their most popular products to their most devoted clients.
One already well-known instance is Nike’s 2020 acquisition of Rtfkt. The company creates NFTs of sneakers and other memorabilia. To add some spice, Nike has filed a trademark application indicating that it intends to market non-traditional forms of its footwear, clothes, and other products with the Swoosh logo.
Soon after, they launched a virtual playground where users could dress up their avatars in Nike gear on the free online game platform Roblox. Given how swiftly the eCommerce and cryptocurrency worlds are evolving, it is essential that eCommerce companies keep an open mind to new projects and ideas.
Have a Stockpile of Digital Goods
The music industry has been completely overtaken by the NFT wave. The industry has seen a dramatic transition over the last 10 years as streaming services have supplanted CDs and digital downloads.
Record companies, streaming services, advertising agencies, and a long list of other middlemen took a large chunk of the pie. The outcome was a significant reduction in the artists’ profit margins.
However, this scenario is changing with the advent and growth of NFTs. They enable musicians to sell their music directly to consumers in exchange for fractionalized tokens.
Likewise, gamers are already spending money on their favorite video games to buy digital skins, weapons, collectibles, maps, and a wide range of other things, which are now represented by NFTs. For some of these items, buyers pay thousands of dollars.
Provide Loyalty and Rewards
While creating a community is critical for online brands, recognizing and rewarding top members is even more crucial. NFTs provide a novel way to design rewards schemes because they can provide members-only access to things like discounts and exclusive deals while still generating revenue for NFTs.
NFT owners can profit by renting out their assets and by receiving royalties when those assets are sold again.
How to Increase Revenue from NFTs Through Your eCommerce Businesses?
Sell and Trade NFTs
In metaverse-powered virtual worlds, companies can always create and provide NFTs to their audience. Here, you have the option of creating your own NFTs like Nike and Coca-Cola did when they introduced their virtual footwear and bubble jacket, respectively.
Another well-known instance of NFT in virtual worlds is the NBA shots, which are short clips of some of the best basketball shots by NBA players that are sold across the world for exuberant amounts of money.
Integrate NFTs With Existing Products
Businesses can incorporate NFTs into their actual products in addition to producing and minting NFTs online. This might be a fantastic opportunity to make money, particularly if it is an eCommerce business.
Nike, which offers CryptoKicks, which customers receive as a similar pair of NFT kicks after purchasing the actual thing, is a relative example of this strategy.
Additionally, by using the smart-contract method, NFT artists and NFT businesses would both profit financially from future product sales.
Create and Sell Limited-Edition NFTs
By rewarding their devoted customers with limited-edition NFT products in the past, well-known firms improved their brand reputation. New companies entering the market can now replicate the business model.
Examples include the treasure box from Coca-Cola, which contains the beverage’s new logo and a virtual jacket. Another illustration of this is the taco-themed GIFs that Taco Bell recently released that went viral in a matter of minutes.
Improve the Supply Chain Management
Improving supply chain management is among the best use cases for firms to implement NFT. Stamping NFT-integrated tags on tangible goods can aid with better product tracking and management because NFTs are enabled, generated (minted), and entirely non-transferable on a blockchain.
These NFTs may be updated effectively at various production phases, tracked to access data, and assure product security and traceability. Additionally, it can assist in quickly detecting and eliminating defective products.
Use NFTs to Raise Funds
Many companies participate in a variety of social causes and fundraising events as part of their Corporate Social Responsibility (CSR). While many people give to charity benevolently, some frequently seek compensation for their donations.
As demonstrated by businesses like Taco Bell and Coca-Cola, NFTs can be a terrific idea in this situation. Not only do they aid in effective brand awareness, but employing NFTs for fundraising can also be a potential strategy to enhance reputation in the community.
NFTs as digital trading cards went viral overnight after well-known NFT games like CryptoKitties entered the gaming market in 2017. Since then, there was no looking back for the NFT sector.
The NFT market had explosive growth with a huge increase in market value year over year, rising from $40 million in 2018 to $338 million in 2020. Therefore, it is safe to say that it is only fair for eCommerce businesses to start integrating NFTs sooner than later.