The NFT Basics
Non-fungible tokens (NFTs) serve as certificates of ownership for an asset. They’re unique cryptographic tokens that are stored on a blockchain. Essentially, they’re one-of-a-kind digital tokens that are immutable.
The early stages of NFTs saw the dominance of digital art and other collectibles, but now various industries are looking into them as they possess features that promote efficiency and transparency when it comes to distributing and tracking assets of all kinds.
NFTs in eCommerce: Why Would Online Store Install NFTs?
The eCommerce industry is one of the biggest in the world and it’s expected to grow by more than $1 trillion by 2025. The industry isn’t going anywhere and the best viable option right now would be to improve the process of making digital sales while enhancing the ability to track the movement of products, which is incredibly tough right now.
Through linking NFTs to products on an online store, one can unlock the following:
- Proof of ownership
- Efficient and safe transfers
- Product verification
- Tracking through blockchain technology
These features can majorly benefit online stores of all kinds. Let’s talk a bit more about how NFTs will benefit the eCommerce industry.
5 Ways NFTs Will Benefit eCommerce
1. Ownership Documentation
One of the key features that NFTs provide is proof of ownership of an asset of any kind. This gives customers complete ownership of the items they buy and it will be visible to anyone on the blockchain.
As a result of this, it will incentivise customers to purchase higher-value products on the internet, as they are given a certificate of ownership for the item - a form of instant gratification while waiting for the product to be delivered. This should result in an increase in buyer confidence, ultimately improving sales.
2. Product Verification
This becomes especially important when it comes to secondary sales. Customers looking to buy products from previous owners can trace the NFT back to its original source, ensuring that the item is valid and a verified product from the company.
With many fake products being made that imitate some of the most well-known brands, NFTs can bring in legitimacy and assurance that the product is real and from the brand you want to support - again increasing buyer trust and confidence.
3. Organised Secondary Market
NFTs allow for the easy transfer of assets through secondary marketplaces. ECommerce stores can set up secondary marketplaces on their website/platform, allowing customers to buy previously used products from verified sources, for prices set by the previous owner.
This allows for a smooth transfer of ownership, as well as the potential for the stores to earn a small percentage of each sale through royalties. NFT royalties are conditions that compensate the original creator of the NFT.
4. Product Research & Tracking
The blockchain is an immutable public ledger that allows for the transparent tracking of transactions and the movement of assets. As NFTs are stored on the blockchain, eCommerce stores can use the blockchain to track the distribution of their products post initial sales.
This can help them determine the demand for products after the initial sale, as well as help determine their potential target market.
5. Creating Unique Experiences for Customers
ECommerce store owners can verify ownership of their products amongst buyers and perhaps create unique experiences for their loyal customers. This can help dramatically with growing a brand and creating loyalty amongst customers.
An example would be having an exclusive merchandise drop for a store. This event may be exclusive to those that own a product and NFT from the store.
The benefits that NFTs will bring to eCommerce are now starting to be realised, with some of the biggest names such as Shopify partnering with GigiLabs, introducing the opportunity to sell NFTs for Shopify Plus users.
We will continue to see this adoption take place, purely because of the perks that NFTs and blockchain technology bring.