Last year the “NFT fever” took the world by storm with news outlets reporting the auction of artist Beeple NFT work entitled 5000 EVERYDAYS: THE FIRST 5000 DAYS at Christie’s, where it was “sold” for a record price of $69.3m.
And from that point onward, multiple NFTs have reached prices over $10m. But, truth be told, most people still do not know what on earth an NFT is, and more importantly, if the NFTs will impact e-commerce or not? Or if the NFT could be used as a powerful marketing tool for e-commerce?
Today we want you to have all the answers to these two questions, so you will enter 2022 with a keen grasp of what is trending in the e-commerce scenario. Let’s start!
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What is an NFT and why are they so valuable?
A non-fungible token (NFT) is a unique and non-interchangeable unit of data stored on a blockchain, a form of digital ledger.
Technically, an NFT could be anything that could be transformed into data, because almost anything can be transformed into data. The NFT phenomena have spurred a wide range of things: from works of art to videos, music, images, economic reports, political surveys, companies reports, sports statistics… you name it.
The only defining characteristic of NFT is the fact that it’s not an interchangeable bit of information. This concept, although a bit obscure for the general public, is pretty important to NFT value.
We could explain this non-interchangeability of NFT by saying that fungible cryptocurrencies, such as Bitcoin can be interchanged without actually changing the – copy-pasting – bit of information. This means that one Bitcoin is exchangeable for another Bitcoin. NFT can not be “duplicated”, at least in theory. This makes them the perfect canvas for works of art. Due to the underlying guarantee that the original piece of art will always remain the same.
The impossibility of duplication – or at least the fact that if you duplicate it, everybody will be able to tell the difference between the copy and the original – creates a scarcity that in turn, is one of the reasons why the NFTs have become so valuable: they are an immutable public record of ownership & transactions.
Can NFTs be used as marketing tools?
These first iterations of NFTs have proven so profitable and reliable that many big brands are getting in the game, with companies like Taco Bell, Pizza Hut, and Pringles coming out with their own NFTs for selling and in the future, as a form of payment.
These first NFTs offered by Pizza Hut and Pringle, for example, are works of art: digital images, gifs, and other multimedia representations of their real-world products, or even in some cases, special “limited” designs of their brand logos, icons, and other merchandising material. For example, Taco Bell “Blockchain Tacos” are the Taco Bell tacos represented as drawings or photos, in GIF format.
Even Visa bought an NFT for $150,000 this year, and Adidas forked over another $156,000 for a digital piece of art.
✔️ Some of the Taco Bell “blockchain tacos” originally sold for $1 have reached prices over $1000 in later actions. ✔️
Because these NFTs are totally traceable, the information contained inside them can be traded without losing the chain of buyers, meaning that at least in theory, NFTs can not be used for any illegal means.
All in all, it seems that NFTs will become an accepted payment option in 2022, due to the highly secure and traceable of its nature. This could in turn allow e-commerce owners to operate with a single and universal payment option, once a payment gateway for NFTs becomes fully functional for all the different e-commerce platforms like Shopify, Magento, Prestashop, or for the big marketplaces like Amazon or Alibaba.
NFT used as pieces of art and publicity stunts
NFT technology nature makes it unique and traceable this, in turn, makes NFT technology the perfect place for launching exclusive collections, unique designs, and limited editions.
And that is precisely what many brands are aiming for: they can double down on creating an exclusive collectible, that is at the same time, a great marketing action.
Asics NFT Sunrise Red Collection is another great example of marketing using NFTs. The NFTs auctioned by Asics are digital video representations of their shoes. Yes, they are selling virtual shoes.
This collection of 9 virtual pairs of shoes by Asics, was sold exclusively on OpenSea.io, as a way of further improving the exclusivity of the NFTs, propelling its value, and turning the “collectible” into a powerful symbol of prestige for the owners.
Using the NFTs to break into new markets
The NBA is also pushing into the NFT movement with the TOP SHOT NBA NFTS. The TOP SHOT NFTs are short videos of remarkable plays during official NBA games. Making them not only highly collectible, and “fan lovable”, but also a piece of sports history.
In their case, the NBA is using the NFT craze for promotion in the normally hostile-for-them European markets. The brand, although global, has always had a tough time in Europe, where Basketball is not so highly regarded as football, or “soccer” if you live in America.
The NBA NFTs are part of their “digital-first outreach” program for the European markets and also, are meant to launch a global campaign featuring its stars from around the world. And it makes all the sense in the world to use NFT short videos to promote the NBA style of basketball in Europe, where the game has been traditionally less flamboyant and far more tactical.
✔️ Rapper Quavo recently teamed up with the NBA for exclusive finals packs. Quavo’s Quest includes Top Shot moments from some of his favorite players including Trae Young, LeBron James, Kevin Durant, and Steph Curry.✔️
Is there an exclusive e-commerce market for NFTs?
Yes, we already have e-commerce platforms committed to the trade and auction of NFTs. And perhaps one of the best examples of that is ClubRare. Which also happens to be a magnificent example of the possible interactions between NFT markets and general e-commerce.
ClubRare is the world’s first physical goods-based NFT e-commerce marketplace, offering rare items in hard-to-find categories as Redeemable NFT.
Successful bidders, inside the platform, can receive real items or “hold them” – the property of such items – on the blockchain for an increase in value. Another example is Zora, a crypto marketplace that uses NFTs as a form of both currency and goods.
All in all seems that NFT technology is slowly becoming a pretty useful tool for e-commerce marketing, especially with limited or collectible products.