If you have a business that has yet to explore how you can profit from the development and use of non-fungible tokens (NFTs), then you're missing out on a once-in-a-lifetime opportunity.
After exploding in the scene in early 2021, NFT market swooned in summer and is now roaring back; sales have exploded.
According to metrics from Dune Analytics, NFT sales skyrocketed in August 2021. It was the highest volume ever sold in terms of US dollars. And while sales are lower than in August there is an estimated $2B in NFT trading planned for November.
Even before that record month, NFT volume saw a slow but steady increase in the preceding months. The evidence is clear: NFTs are going to be a force to be reckoned with on the eCommerce stage for the foreseeable future.
Before jumping in fully to NFTs it’s critical to understand various ways that NFTs can create value for their owners: one is an expression of self another is as an investment.
NFTs are like many other goods that people buy which are expressions of themselves but which do not necessarily have utility.
For example, I have hundreds of books on my bookshelf. For almost all, I read it once and will never read it again. In fact, most I won’t touch more than a few times. Almost all will sit on my bookshelf, I do not sell/giveaway the books because in a small way they represent who I am.
Similar to the books example, most people operating in society today buy goods that help distinguish who they are. NFTs are simply the next extension of that.
Instead of buying a book or a record or a piece of art that simply “sits” there, NFTs are now a digital version and natural extension of self-expression.
With the rapid growth and and massive spikes of value for NFTs, many view NFTs as a way to “get in early” in hopes of acquiring an asset that grows substantially in value.
For many we are still in the first inning of NFT’s and if that’s true then early NFTs of many kinds might be vintage (i.e. valuable) in the future.
So how can you, as an eCommerce store owner, capitalize on this? There are a number of ways that you'll want to explore.
Here's what NFTs will mean for both businesses and online buyers — it's quite literally a world of endless possibilities.
Let's say you're a direct to consumer furniture brand who drives most sales through eCommerce. This is an exciting market to be in and one that gives you a uniquely close relationship with your customer.
NFTs could be an opportunity to create an even more special relationship with your base.
With a product configurator, you can enable your customers to configure their own couch online. The customer can then have the custom-made couch shipped directly to their home.
They can also create an NFT of the couch to make it even more of a unique keepsake. Here's how the process works:
The great thing about NFTs is that you have all the power when it comes to controlling the supply of the product. You can create as many or as few as you want, driving up demand for a product that customers love and want to get their hands on.
In terms of your hypothetical couch business, you now have a two-pronged approach to eCommerce: you can sell the couch both physically and virtually. You could offer only buyers of the real couch the opportunity to buy that particular couch as an NFT.
The end-user can then resell the NFT after buying it on the marketplace. This provides flexibility and options for both the creator and the buyer.
Virtual and digital identities are going to become more and more important as the economy evolves. So why exactly are consumers drawn to NFTs?
At the moment, it all comes down to scarcity, which is what NFTs offer. But in the future, the dynamic will shift.
What happens when NFTs become less scarce and more commonplace? That may offer many businesses a chance to provide their customers with a unique item or shopping experience that can be replicated over and over again.
Scarcity is great, sure. But what about creating an NFT that is readily available and many people still want to buy for reasons not tied to scarcity?
What will be interesting is seeing what big brands can do to tie an NFT to a common product that isn't super expensive. This could be the future of NFTs in the marketplace, and it's a reality many eCommerce companies should look into.
If it isn't clear by now, the intersection of physical and virtual assets is going to be a gamechanger across multiple verticals moving forward.
"Interoperability" is going to be one of the key concepts businesses looking to excel in this space will need to master. Developing a combination of physical and virtual assets that integrate together is something a lot of businesses are working on, and it matters a lot for the future of a prospective metaverse in which virtual identities and digital platforms reign supreme.
"...[It's] the evolution of the internet as the fabric for our personal and professional lives... We believe that the metaverse will bring in the era of interactive content, where you have agency over the content and you can control it, you can interact with it, and you can ultimately immerse yourself into the content and not just look at it through a small window."
People are going to demand asset and NFT interoperability. You already see it in entertainment platforms like Fortnite and Roblox. For example, Roblox gives its players the ability to integrate custom-coded NFTs from major brands such as Gucci.
Look at this example from Pokémon GO, in which you can buy gear inspired by The North Face x Gucci Collection for your avatar. These items are sold at "PokéStops" around the world. This increased interoperability will continue to grow because it's what people want.
Online brands should take a good, hard look at how they can get in on this market. Begin your discovery phase now to determine how you can make money off of it.
The key to getting into the NFT game is partnering with a provider who can create custom models that can then lead to NFTs. Threekit does all of this.
You may have an idea of how to incorporate NFTs into your current business model but don't know how to get started. Maybe you don't have an idea in mind, but you’re looking for inspiration. Either way, Threekit can partner with you to identify creative, innovative solutions and then execute on your vision.
The NFT revolution is here. Companies willing to adapt alongside it are more likely to be on the cutting edge in the coming years. To figure out how you can become a part of this movement, reach out to Threekit today.