The integration of NFTs and blockchain technology into the consumer economy is poised to cause massive disruption to established models. For those in doubt, if cryptocurrencies, and the blockchain payment infrastructures that underlie them, are here to stay, they need look no further than the explosion in popularity of Non-Fungible Tokens (NFTs) last year.
NFTs are provably scarce digital assets that are stored and verified by blockchain technology, for which a growing number of uses are emerging. 2021 saw an exponential increase in the creation and trading of NFTs sparking a market boom of nearly $41 million, propelled further by the popularization of narratives around the metaverse.
The metaverse is projected to be an immersive virtual experience that users will connect to through their personal devices or plug into via headsets. It will be a virtual world with parks, buildings, shopping centers, and live events. Users will interact with the metaverse through the use of avatars, which will need to be clothed and transported.
Any physical asset that you can imagine, be it cars, jewelry, houses, or lands, will exist as NFTs in the metaverse, available to be bought and sold with cryptocurrencies.
NFTs can also function as our digital identities in these new virtual worlds. One could easily envision a future where instead of creating profiles containing personal information on a website, the customer will instead simply connect their blockchain wallet. The NFTs they hold inside their wallet will serve as their unique identifier.
The potential use of NFTs and blockchain in the future of our digital lives seems unlimited. Companies that educate themselves now and start to explore their options for e-commerce use will find themselves ahead in the race for the metaverse.
Friction must be overcome for mainstream adoption
NFTs and blockchain technology open the door to limitless economic opportunities in the e-commerce sector. Participation in this economy will require new users to become more familiar with the use of blockchain ecosystems and payment networks. However, e-commerce companies can ease this transition by reducing the friction involved in transactions on the blockchain.
For mainstream adoption to occur, the UX (User Experience) must feel as simple as the easiest banking and shopping transactions in our established payment structures. If they are not as effortless as this, the general population will be hesitant to get involved.
There are still many issues that need to be ironed out for the industry to continue to scale.
These challenges include:
- Isolated blockchains and wallet interactions
- Inability to pay for NFTs using fiat currencies
- Complicated wallet connection to stores and marketplaces
- Sub-standard customer support
One thing that is helping to advance adoption for retailers is the ever-developing infrastructure through cross-industry collaborations and partnerships. Shopify is one example of a widely familiar e-commerce platform that has recently entered the blockchain and NFT space. By partnering with a blockchain marketplace provider, Shopify now allows e-commerce stores to sell NFTs directly through their web stores, putting the technology at their merchants’ fingertips.
E-commerce stores that find and pioneer solutions to increase user adoption of blockchain and NFTs will be best positioned to capitalize on the growing trend of seeing these new technologies in the mainstream.
Point of sale must not be underestimated
How an e-commerce company manages its point of sale (POS) will be a key factor in this new economy. Companies that seamlessly merge their online shops to the POS in the metaverse will be positioned optimally to grow and profit from this new infrastructure. A shop that simultaneously offers both physical items for real-world use and digital NFT items for use in the metaverse will be attractive for people who want to move easily between physical and virtual realities.
E-commerce companies should ensure that they team up with the best blockchain technology providers to make the process of purchasing NFTs as simple, fast, secure, and cheap as possible for their customers.
There may not be one metaverse that rules them all
Two of the most well-known metaverse environments are The Sandbox and Decentraland. Major companies such as Samsung and Apple have already moved to snap up ownership of the virtual land that exists inside them.
In the future, it’s likely that different metaverse environments will emerge. They will have their own atmosphere and cultures, and companies will choose which metaverse to associate themselves with based on their brand’s values.
However, the number of metaverse worlds out there is currently limited. Until a greater variety exists, a prudent strategy would be to establish an e-commerce brand in the same metaverse as the world’s biggest brands. This association will offer a powerful boost as the mainstream population initially flocks towards the most established metaverses such as The Sandbox and Decentraland.
Guide your customers through the transition
Just like the evolution of any system, there will always be a portion of people who are unhappy with the transition. Unfamiliarity leads to discomfort, and the discomfort can be blamed on the innovators.
E-Commerce companies should take great care to explain the transition to their loyal customers. Lack of education and clarity about the steps involved may cause the loss of clients to rival brands. To lead their customers into this new world, e-commerce enterprises must make the process of participating in the metaverse as smooth as possible.
For example, a guide to showing how to set up a blockchain wallet would be key in helping customers transact financially. Another point of education would be about NFTs. Information about what they are, and their role in the metaverse would be vital for any potential participant. An e-commerce brand could launch an NFT with some special perks for the holders and airdrop it (give it away) for free to the wallets of its most loyal buyers. In this way, consumers could learn about this new technology while also enjoying the associated rewards. Ultimately, the informed, educated customer will be more likely to avail of future products offered by the brand that responsibly introduced them to this exciting field.
Match the blockchain to your brand
The world of blockchains is still divided into different ‘countries’ with their own strengths and weaknesses. A blockchain may be well established, with famous names in business and entertainment associated with them. However, the same blockchain may be slow, inefficient, and a substantial emitter of carbon into the atmosphere.
Contrast this to a less well-known blockchain with little or no famous associations. Yet it may be fast, cheap, and carbon neutral. An e-commerce business must think deeply about which one they choose to associate themselves with.
One real-world example of this is the case of WWF, which tried to launch NFTs on Ethereum – and it backtracked. Ethereum is a large emitter of carbon due to its energy-intensive method of verifying transactions. WWF initially claimed that its use of the Polygon blockchain, which can interact with Ethereum while sparing much of the carbon emissions, would negate the environmental damage of their NFT campaign. However, even with Polygon, WWF still grossly underestimated the project’s carbon footprint. Under fire from their supporters, they terminated the sale of the NFTs after only a few days.
It’s a learning curve. A brand with a strong focus on sustainability, like the WWF, would be wise to avoid a blockchain that does not go out of its way to protect the environment. A mistake in this selection process could lead to an alienation of its customer base and a loss of identity that could hamper chances of success in the future.
NFT communities = economic opportunities
An e-commerce store may choose to link with an established NFT community. Adidas, for example, has formed a partnership with possibly the world’s most famous NFT community, the Bored Ape Yacht Club (BAYC). Sports superstars such as the NBA giant Stephen Curry and football idol Neymar are members of the BAYC. Partnership with BAYC gives Adidas association with sporting behemoths such as these two, making their brand more attractive to the hundreds of millions of people who adore these titans of basketball and football.
Businesses may offer perks or special benefits to holders of their partner NFT community holders. For example, NFT holders could be given the first option on limited availability items. They may also offer discounts and deals to loyal NFT holders. How about being in with a chance to meet one of their associated celebrities? New Adidas jacket and a one-on-one meeting with Stephen Curry, anybody? The ability to offer this NFT utility will open the potential for a huge new customer base. However, like with the choice of blockchain, a business must ensure that the values of the NFT community agree with its brand reputation.
So where does all this finish up?
Several UX problems still exist. Companies should be alert to any opportunities to simplify this process. Those that team up with the best technology providers to streamline the buying experience of their customers will likely see the benefit in their revenues.
We will one day exist in a fully integrated world of blockchains that interact with each other flawlessly. However, this is not the current situation. Therefore, continued education and excellent partnerships will be crucial for all e-commerce as we enter the digital age.
Author:
Yan Ketelers, chief marketing officer at Venly
You are in: Home » Guest Comment » GUEST COMMENT New digital paradigms lead to fresh ecommerce opportunities
GUEST COMMENT New digital paradigms lead to fresh ecommerce opportunities
by Yan Ketelers
The integration of NFTs and blockchain technology into the consumer economy is poised to cause massive disruption to established models. For those in doubt, if cryptocurrencies, and the blockchain payment infrastructures that underlie them, are here to stay, they need look no further than the explosion in popularity of Non-Fungible Tokens (NFTs) last year.
NFTs are provably scarce digital assets that are stored and verified by blockchain technology, for which a growing number of uses are emerging. 2021 saw an exponential increase in the creation and trading of NFTs sparking a market boom of nearly $41 million, propelled further by the popularization of narratives around the metaverse.
The metaverse is projected to be an immersive virtual experience that users will connect to through their personal devices or plug into via headsets. It will be a virtual world with parks, buildings, shopping centers, and live events. Users will interact with the metaverse through the use of avatars, which will need to be clothed and transported.
Any physical asset that you can imagine, be it cars, jewelry, houses, or lands, will exist as NFTs in the metaverse, available to be bought and sold with cryptocurrencies.
NFTs can also function as our digital identities in these new virtual worlds. One could easily envision a future where instead of creating profiles containing personal information on a website, the customer will instead simply connect their blockchain wallet. The NFTs they hold inside their wallet will serve as their unique identifier.
The potential use of NFTs and blockchain in the future of our digital lives seems unlimited. Companies that educate themselves now and start to explore their options for e-commerce use will find themselves ahead in the race for the metaverse.
Friction must be overcome for mainstream adoption
NFTs and blockchain technology open the door to limitless economic opportunities in the e-commerce sector. Participation in this economy will require new users to become more familiar with the use of blockchain ecosystems and payment networks. However, e-commerce companies can ease this transition by reducing the friction involved in transactions on the blockchain.
For mainstream adoption to occur, the UX (User Experience) must feel as simple as the easiest banking and shopping transactions in our established payment structures. If they are not as effortless as this, the general population will be hesitant to get involved.
There are still many issues that need to be ironed out for the industry to continue to scale.
These challenges include:
One thing that is helping to advance adoption for retailers is the ever-developing infrastructure through cross-industry collaborations and partnerships. Shopify is one example of a widely familiar e-commerce platform that has recently entered the blockchain and NFT space. By partnering with a blockchain marketplace provider, Shopify now allows e-commerce stores to sell NFTs directly through their web stores, putting the technology at their merchants’ fingertips.
E-commerce stores that find and pioneer solutions to increase user adoption of blockchain and NFTs will be best positioned to capitalize on the growing trend of seeing these new technologies in the mainstream.
Point of sale must not be underestimated
How an e-commerce company manages its point of sale (POS) will be a key factor in this new economy. Companies that seamlessly merge their online shops to the POS in the metaverse will be positioned optimally to grow and profit from this new infrastructure. A shop that simultaneously offers both physical items for real-world use and digital NFT items for use in the metaverse will be attractive for people who want to move easily between physical and virtual realities.
E-commerce companies should ensure that they team up with the best blockchain technology providers to make the process of purchasing NFTs as simple, fast, secure, and cheap as possible for their customers.
There may not be one metaverse that rules them all
Two of the most well-known metaverse environments are The Sandbox and Decentraland. Major companies such as Samsung and Apple have already moved to snap up ownership of the virtual land that exists inside them.
In the future, it’s likely that different metaverse environments will emerge. They will have their own atmosphere and cultures, and companies will choose which metaverse to associate themselves with based on their brand’s values.
However, the number of metaverse worlds out there is currently limited. Until a greater variety exists, a prudent strategy would be to establish an e-commerce brand in the same metaverse as the world’s biggest brands. This association will offer a powerful boost as the mainstream population initially flocks towards the most established metaverses such as The Sandbox and Decentraland.
Guide your customers through the transition
Just like the evolution of any system, there will always be a portion of people who are unhappy with the transition. Unfamiliarity leads to discomfort, and the discomfort can be blamed on the innovators.
E-Commerce companies should take great care to explain the transition to their loyal customers. Lack of education and clarity about the steps involved may cause the loss of clients to rival brands. To lead their customers into this new world, e-commerce enterprises must make the process of participating in the metaverse as smooth as possible.
For example, a guide to showing how to set up a blockchain wallet would be key in helping customers transact financially. Another point of education would be about NFTs. Information about what they are, and their role in the metaverse would be vital for any potential participant. An e-commerce brand could launch an NFT with some special perks for the holders and airdrop it (give it away) for free to the wallets of its most loyal buyers. In this way, consumers could learn about this new technology while also enjoying the associated rewards. Ultimately, the informed, educated customer will be more likely to avail of future products offered by the brand that responsibly introduced them to this exciting field.
Match the blockchain to your brand
The world of blockchains is still divided into different ‘countries’ with their own strengths and weaknesses. A blockchain may be well established, with famous names in business and entertainment associated with them. However, the same blockchain may be slow, inefficient, and a substantial emitter of carbon into the atmosphere.
Contrast this to a less well-known blockchain with little or no famous associations. Yet it may be fast, cheap, and carbon neutral. An e-commerce business must think deeply about which one they choose to associate themselves with.
One real-world example of this is the case of WWF, which tried to launch NFTs on Ethereum – and it backtracked. Ethereum is a large emitter of carbon due to its energy-intensive method of verifying transactions. WWF initially claimed that its use of the Polygon blockchain, which can interact with Ethereum while sparing much of the carbon emissions, would negate the environmental damage of their NFT campaign. However, even with Polygon, WWF still grossly underestimated the project’s carbon footprint. Under fire from their supporters, they terminated the sale of the NFTs after only a few days.
It’s a learning curve. A brand with a strong focus on sustainability, like the WWF, would be wise to avoid a blockchain that does not go out of its way to protect the environment. A mistake in this selection process could lead to an alienation of its customer base and a loss of identity that could hamper chances of success in the future.
NFT communities = economic opportunities
An e-commerce store may choose to link with an established NFT community. Adidas, for example, has formed a partnership with possibly the world’s most famous NFT community, the Bored Ape Yacht Club (BAYC). Sports superstars such as the NBA giant Stephen Curry and football idol Neymar are members of the BAYC. Partnership with BAYC gives Adidas association with sporting behemoths such as these two, making their brand more attractive to the hundreds of millions of people who adore these titans of basketball and football.
Businesses may offer perks or special benefits to holders of their partner NFT community holders. For example, NFT holders could be given the first option on limited availability items. They may also offer discounts and deals to loyal NFT holders. How about being in with a chance to meet one of their associated celebrities? New Adidas jacket and a one-on-one meeting with Stephen Curry, anybody? The ability to offer this NFT utility will open the potential for a huge new customer base. However, like with the choice of blockchain, a business must ensure that the values of the NFT community agree with its brand reputation.
So where does all this finish up?
Several UX problems still exist. Companies should be alert to any opportunities to simplify this process. Those that team up with the best technology providers to streamline the buying experience of their customers will likely see the benefit in their revenues.
We will one day exist in a fully integrated world of blockchains that interact with each other flawlessly. However, this is not the current situation. Therefore, continued education and excellent partnerships will be crucial for all e-commerce as we enter the digital age.
Author:
Yan Ketelers, chief marketing officer at Venly
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