When most people hear terms like distributed ledger technology and non-fungible tokens, they immediately tune out. While these terms may sound like inside jargon, they actually represent the beginning of a new era of retail and eCommerce.
The next billionaires will be transacting in NFTs through the metaverse. New technologies such as blockchain and the metaverse are creating infrastructure for a digital world which will revolutionize business models across the board.
In this blog, we explore what the metaverse is, how NFTs will be used in the metaverse, and how big brands and eCommerce alike are being disrupted by this new technology.
What is an NFT?
A non-fungible token (NFT) is a unique, digitally scarce asset that can be transferred from one person to another.
These tokens live on the blockchain, which means there are records of NFT purchases across a distributed network of computers.
Just like with cryptocurrency, each time a transaction takes place, a series of nodes (computers) on the network must approve it. Once approved, the transaction forms a block which is added to the chain. This means that there is no central authority governing the transactions on the blockchain and that no transaction can be altered or destroyed.
This technology has many applications, most famously cryptocurrency such as Bitcoin. Each token of these digital currencies is equal in value to one another—one Bitcoin is equal to any other Bitcoin.
In the case of NFTs, blockchain technology is used to prove digital ownership and originality of virtual items. That means no NFT is alike and thus are not equal to one another.
NFTs are typically digital art, but they can also be digital products, like skins, or concert tickets, or even used as a way to invest into a business.
NFTs are typically bought and sold using cryptocurrency.
What's the metaverse? Is it the same as Web3?
The metaverse is a shared, persistent, nearly infinite digital space. It is a universe where all virtual worlds, created and managed by their users, exist together in a common space.
Though the metaverse is part of web3, the latter term represents the future of the internet specifically. It's an idea for a new iteration of the World Wide Web that is based on blockchain technology. Rather than relying on big banks or large companies to manage the internet, it incorporates concepts such as decentralization and token-based economics.
The metaverse and eCommerce
NFTs are the future of eCommerce and brand awareness. In the past few years, we've seen companies like Shopify add support for NFTs, an entire ecosystem of NFT-based startups emerge and grow, and big brands like Forever21 invest heavily in creating their own digital spaces in the metaverse.
Forever21 opened the doors to its virtual store in Decentraland's Fashion District in March of 2022. It features everything you'd expect in a physical location including avatars of Forever21 team members, background music, and decor. The virtual storefront was created in partnership with the Tokens.com Corporation, a public company solely focused on web3 assets and businesses.
The store's opening coincided with the launch of a series of NFTs from Forever21, digital clothing for their customer's avatars based on items found in the physical retail location.
The benefits of this move have been twofold for the brand. First, it has brought Forever21 to a new set of young demographic, bringing a newfound sense of confidence in the once fading brand. Secondly, the investment in virtual real estate and NFTs has brought a new revenue stream to the company.
This model is one that any major brand can rinse and repeat—any many have, including major fashion house Gucci. By creating an NFT collection and a virtual storefront, they can build brand awareness in a new way with a new audience while opening up new business opportunities.
Although we may perceive the virtual world as infinite, Decentraland only has a limited amount of space available in its Fashion District. Just like in the physical world, it's important to invest early before space runs out and land prices skyrocket.
NFT collections by big brands
Other big brands have taken a different approach, focusing only on launching their own NFT collections. The benefits are the same as outlined above, without the large investment in real estate required. What's more is that these limited edition NFT collections create a sense of exclusivity and offer more opportunities for collaboration.
Adidas is a great example of a brand that chose strategic partnerships and used NFTs to build awareness. The company launched an NFT collection in December of 2021 that was available to purchase on Opensea. These NFTs were not just digital products, but rather a kind of membership to the exclusive Adidas metaverse.
These NFTs allow exclusive access to the launch of any digital drop, which also allow NFT holders to claim a physical product. The physical products are hoodies, sweatpants, and accessories designed in collaboration with their partners: Bored Ape Yacht Club, Punks Comics, and GMoney.
The brand was able to build on the existing buzz of these virtual powerhouses to capture new customers and sell out their NFTs in minutes, earning over $23 million.
Start your web3 journey
The world is moving toward a digital future, and it's time for you to get involved. Whether you’re interested in virtual real estate, NFTs, or accepting cryptocurrency as a payment method in your eCommerce, it’s time to get started. The internet is changing and it’s time to change with it.
If you've been doing any research on how best to grow your brand in the blockchain space, you'll know that NFTs are one of the easiest ways to get started. They are easy to create and sell. They don't require as much investment as a digital storefront. Plus, they can help you build brand awareness through engagement with fans and followers—and also through collaboration with other artists or brands. You can even create an entire community around your work by creating an NFT-powered marketplace where users can buy and sell their own creations!
Using Shopify to sell NFTs
In July of 2021, Shopify began allowing merchants to sell NFTs on their storefronts, where it allows people to mint NFTs without cryptocurrency, opening them up to an even broader consumer base. If you’re in the United States, apply to the NFT beta program to get started. Shopify plans to open the program up globally down the road.
Shopify currently works with the following blockchain technology:
Though Shopify itself does not have a built-in NFT minting functionality yet, it does have several third-party apps that do.
Better yet, by using Shopify to sell your NFTs, you can take advantage of the full catalogue of apps to promote your digital products.
The Hundreds, an LA based streetwear brand (Shopify plus merchant) launched one of the most successful NFT project called Adam Bomb Squad. Since launch, they have made over $70 million from Opensea secondary sales alone.
They are one of the first apparel brands who bridged the gap between NFTs and fashion, and since then, a lot of other apparel brands started following their footsteps.
To learn more about how to launch an NFT collection as a Shopify Merchant, please get in touch with Startup Slang, they are a web3 development agency who specializes in launching NFT projects for eCommerce brands.
Work with web3 professionals
Launching your own NFT collection is straightforward, but not easy. You'll need to have a solid roadmap your audience will get on board, find an artist who can create something unique for the artwork, a smart contract developer who can put your digital art on the blockchain and finally you need to have a detailed marketing plan for selling out your collection.
If you're new to cryptocurrency or NFTs, working with a company like Startup Slang, a full-stack Web3 agency who specializes in helping eCommerce companies launch their NFT collections. They can take the hard work out of the equation and give you the tools and strategies you need to sell out an NFT collection from beginning to end.
Schedule a free consultation with Startup Slang and learn how eCommerce brands can take advantage of NFTs.
The future of eCommerce is web3
There is no doubt that the retail landscape is going to change. This new tech has the opportunity to affect your bottom-line. So why wait around? Big brands such as Nike and Adidas are already gearing up their transition into NFTs. If they're starting to adopt NFTs, then it's only a matter of time before others follow suit.
Whether it's for your budding eCommerce venture, or just for branding and product awareness, NFTs are going to be a revolutionary new frontier in the future of internet branding and the advertising landscape.
With the right approach and proper planning, you can benefit from the NFT revolution without having to drastically change your marketing strategy.
The sky's the limit when it comes to what NFT technology can do for businesses going forward.
If you're looking for some distance on your competition and want to reach new customers before they are even aware of your brand presence then, yes, it's time for brands to launch their first NFT collection.
Before you leave, learn more about clever eCommerce marketing strategies you must try in 2023.