Web3 and NFTs: Will decentralized web enhance eCommerce?Guneet Kaur
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If you glance through marketing Twitter you’ll quickly find someone trying to convince you that there’s nothing Web3 and NFTs can’t solve for.
Yes, eCommerce business owners often struggle to manage supply, keep an eye on products, and centralize their databases. And yes, Web3 will be able to help with some of that by offering blockchain offerings that open data transparency between merchants and vendors.
Then there’s of course the idea of multisensory items, upsells, value-added packages, and offering the immediate gratification of a virtual equivalent of a physical marketplace with eCommerce non-fungible tokens (NFTs).
At the end of the day, Web 3 isn’t going anywhere though its adoption may be a bit slower than advertised, and all of this needs to be considered as you prepare your company for the future, considering that the global eCommerce market will expand by $1 trillion by 2025.
To help you understand how Web3 can potentially disrupt the eCommerce industry and techstack, this article covers the potential application of blockchain-based NFTs and how eCommerce brands can embrace them.
Web3, blockchain technology, and NFTs
Today's modern culture depends on the Web because it makes it possible to store, access, and share information at any time, anywhere.
Web1, the original internet, mainly was made up of links and homepages with very few opportunities for user interaction.
Then came Web2, which raised the bar for user experience. Users can post their material for consumption by others using a read-and-write or push-pull format.
The primary distinction as we move forward is that Web2 is read-write while Web3 is read-write-own. Yes own!
For instance, an NFT by the digital artist Beeple was auctioned at Christie's for $69 million. However, NFTs aren’t just for art collectors and artists. Instead, these digital assets will become a potent weapon for eCommerce enterprises in the upcoming years, and this is how.
Potential applications of blockchain-based NFTs in the eCommerce industry
Let's explore various use-cases to gain a glimpse into the world of NFTs and learn how eCommerce organizations may unleash the potential of digital assets to offer value to their customers in the Web3 world:
Lifetime product data tracking
One way to speed up digital sales and provide lifetime product data tracking that was previously impossible is through the use of NFT technology.
NFTs could have the ability to replace software development kits (SKUs) with blockchain-based analogs and promote one-of-a-kind products. The idea might also enable an equal profit-sharing system, especially for new firms trying to make a name for themselves in eCommerce.
Additionally, since consumers may access all data points for the duration of a product's life, NFTs may make it possible to track eCommerce data, according to Kamil Sattar, a leading industry expert in drop-shipping and the founder and CEO of E-commerce Mentoring.
“In eCommerce, I see NFT technology as one way to help streamline digital sales and enable lifetime product data tracking not previously possible. "eNFTs," as I call them, could also empower a more transparent commerce ecosystem,” Kamil told Forbes.com.
While the idea of the eNFT ecosystem is still new, there are platforms already connecting the concept to systems like Shopify, Magento and Woocommerce.
Pre-launch products to generate excitement
Nearly every brand's top concern is how to create buzz before releasing a new product. By granting early entry before the release of a new product, NFT tokens can be used to generate excitement among consumers and help the merchant gain exposure, establishing a solid base of early adopters.
Along this line, to give upcoming initiatives a place to start when creating their own communities, Gary Vaynerchuk introduced the VeeFriend Pre-Launch Program (PLP).
Additionally, Shopify now enables retailers to sell NFTs directly through their shops, in contrast to previously when users would have to mint and sell NFTs through a third-party marketplace like OpenSea.
Moreover, in February 2022, the NFT marketplace and sales platform, Rakuten NFT, was introduced by Rakuten to allow users to buy and sell NFTs to one another in various categories, including music, sports and entertainment.
Boost research and development through NFT rewards
Incentivizing customers to participate in a brand's research and development stage is priceless as it helps companies understand a customer’s pain points and what features they admire most. Therefore, NFTs can be offered as a reward to customers for taking part in surveys and beta-testing. Holding NFTs could give unique rights to vote in a brand's product development roadmap, access to early product releases, and potential profit-sharing benefits.
Additionally, according to strategist Michael Miraflor, NFTs can be regularly distributed by businesses as "proof of membership," "proof of purchase," or personalized gifts such as discounts, private community access, etc., can be routinely airdropped to NFT holders.
Therefore, by maximizing cross-selling and enhancing the purchasing experience for customers, eCommerce brands can better cater to their customers while utilizing NFTs and other digital incentives.
For instance the value of digital goods in a vertical typically reserved for physically tangible assets was seen in December when Nike purchased RTFKT Studios, a producer of "next-generation" NFT collectibles, demonstrating how enthusiastic it was about the concept of NFTs. Seeing that the studio was able to sell 600 pairs of NFT sneakers in just six minutes for a total of $3.1 million makes it easy to see the studio's attractiveness to the sportswear maker.
Offer customized shopping experiences
Long story short, brands are being pressured to create more and more exclusive drops but are asked to do so while maintaining internal and budgetary efficiencies.
This is where Web3 comes in: Fusing online customer patterns and experiences with tangible and digital assets.
For instance, in order to display the line of digital clothing as NFTs that may be purchased from the virtual stores themselves, Trace Network teamed up with Technopak Advisors to construct brand stores in the metaverse.
“Once the user decides to buy a product by looking at the virtual brand store, they can also buy the physical products through e-commerce sites of the brands that deliver the product to their doorstep,” according to Financial Express.
Retailers might also offer to assist customers in exploring the possibilities of NFTs by customizing the virtual world with augmented reality (AR) technology. For instance, any eCommerce product like sneakers can be represented virtually by simply taking a picture of the physical piece, allowing people to view them from the comfort of their homes as holographic projections and gain a unique, individual experience and perspective on sneakers.
Community and relationship building to promote brand loyalty
Web3 also includes CRM 3.0 (Customer Relationship Management), which combines a social component that enables a firm to integrate customer interactions and dialogues from social networking sites into the CRM process.
The current emphasis of CRM 3.0 is on forging connections with the community through social platforms (e.g., YouTube, Facebook, and Twitter), but NFTs and the metaverse is next.
To build community relationships, a company like Ikea can produce 50 NFTs to sell or distribute. Therefore, if 50 NFTs are floating about and the blockchain verifies them, these pieces suddenly have value. In addition, people can purchase your goods or services with this unique currency, promoting brand loyalty. Moving from marketing language to community speak makes the conversation less formal and more "genuine." As a result, there is a chance to develop new services and programs that use this expanded version of CRM.
We'll see many more distinctive alliances, rewards, and collaborations where currency (NFT) holders go on unique adventures that ultimately result in rewards and benefits as more eCommerce brands and businesses start using NFTs to build stronger communities.
But, no matter what happens, the next version of NFTs must be entertaining and engaging to become a mainstream technology. Of course, it will take a few years, probably the next five to 10, to see wider adoption of NFTs as a tool to promote brands, build successful products, and stronger communities.