In a time when the real world is giving way to the metaverse, a jpeg that can be viewed digitally is crucial for major brands like Gucci, Nike, Super Bowl, Adidas, Dolce & Gabanna, and MAC. The term “non-fungible token,” or NFT as it is more frequently known, has become extremely popular in recent years. They are kept on a blockchain, which serves as the cryptocurrency’s central database. NFTs cannot be swapped for other digital assets because they are all completely unique, unlike crypto. Blockchain technology is utilized to establish exclusive ownership & digital provenance for each NFT that is sold.
How NFTs are a help?
Many people, who are knowledgeable about this market trade of digital goods know its value. NFTs may provide the impression of being a particularly individualized kind of shopping, in contrast to purchasing at a real store. When an independent seller sells an NFT, for instance, it is a unique digital asset (it is non-fungible), yet when a huge retailer sells an item in-person or online, it is often not that distinct because it has no original value (it is fungible). It turns out, though, that there is space for businesses in this area, and it is growing more well-liked than ever imagined.
Types of NFTs
Non-fungible Tokens, or NFTs, are typically produced using the same kind of coding as cryptocurrencies. The blockchain technology serves as the foundation for these digital assets. They cannot be traded or exchanged in the same manner as other cryptographic assets. Any item categorised as a “digital collectible” is an NFT as it’s unique. NFTs come in a variety of more popular forms, including:
- Trading cards
- Memorable sports moments
- Domain names
- Items in a game
Why retailers are interested in NFTs
Major brands are entering the NFT market, which has improved their visibility and awareness. The majority of NFTs have been digital artwork or collectibles, and brands are starting their own NFT collections. But NFTs have much greater potential. For instance, clothing companies like Louis Vuitton and Gucci are developing digital copies of their clothing lines for usage in the metaverse. However, a lot of them are also connecting these digital versions to tangible goods. The metaverse as a whole, as well as NFTs specifically, have virtually limitless potential for monetization.
The additional layer of consumer interaction that NFTs provide is another reason why merchants should consider them. NFTs are a component of Web3, a new version of the Internet that makes use of blockchain technology. Users now have control over their data and identities thanks to Web3’s decentralized web software protocols. As a result, both brands and their clients may control their online interactions.
Consumers can feel more connected to their favorite companies than ever before because of Web3 and the metaverse, which are built on community and authenticity. From any location in the world, they will be able to engage in immersive interaction with a brand’s virtual area.
There is no way to fake NFT ownership because it is validated through the blockchain. Therefore, an NFT’s benefits are exclusively available to token holders.
Token gating, and NFTs generally have the major advantage of placing distribution and, thus, earnings, in the control of the NFT designers. Since there are few “middleman” costs involved in producing and selling NFTs, inventors keep all of their profits.
How retailers are using NFTs
Nike entered the NFT market by purchasing RTFKT, a significant producer of digital footwear and collectibles. For their virtual shoes, they even got a patent. Video games can make use of digital sneakers, but they’re also connected to real-world footwear. In order to generate unique variations, the virtual shoes can also be digitally crossed with other virtual shoes. Then, such hybrid digital shoes can be made into actual shoes. More than 12 million users have visited Nike’s NIKELAND on Roblox. There, users can participate in games and tasks. Additionally, they sell virtual footwear and offer complimentary (virtual) branded bags and headgear.
As a result of a partnership between Adidas Originals, GMoney, Bored Ape Yacht Club, and PUNKS Comic, Adidas debuted their NFT line, Into the Metaverse. Adidas also purchased Indigo Herz, a Bored Ape, and outfitted it with a specially made tracksuit bearing the Adidas logo. 30,000 NFTs were sold in total for around 0.2 ETH, or about $765. They generated $22 million for Adidas and were quickly sold out.
With the release of the Gucci Garden on Roblox, a metaverse video game, Gucci celebrated its 100th anniversary and entered the metaverse. Gucci has currently offered land in The Sandbox, a gaming platform regarded as one of the first metaverses, following the success of its NFT series created in partnership with Superplastic. Based on the Gucci Vault platform, this area will provide immersive experiences with a concept store that features experimental items from the Gucci archive and a metaverse-themed shop.
One of the first companies to enter this market was MAC Cosmetics, which did so by releasing a collection for SIMS 4 and a pair of limited-edition lipsticks through Honor of Kings. Its first NFT collection developed in collaboration with the Keith Haring Foundation, MAC Cosmetics is entering the metaverse. Three images of the MAC Viva Glam lipstick bearing works by Keith Haring are part of the NFT collection.
Coca-Cola joined the NFT market in July 2021 when they began selling loot boxes. They went a step further and integrated other digital items, such as the aforementioned NFTs and digitally branded clothes from the interactive virtual platform Decentraland, in these loot boxes. Coca-Cola adopted the experience and made it physi-digital by subsequently integrating a real Coca-Cola refrigerator for the NFT buyer. For Coca-Cola to provide a comprehensive experience for the people who purchased their digital items, retailing for more than 575,000 dollars, linking NFTs to the actual world was crucial.
For retailers, NFT has a variety of uses, such as virtual shops where customers may use bitcoin to purchase virtual items. The brand opportunities in NFTs for shops are mind-boggling; with so many individuals possibly accessing the metaverse having avatars, there is an opportunity for companies to sell their items and receive much greater visibility throughout the world. The metaverse, despite being a recent development in retail, has the potential to fundamentally alter how consumers purchase.