FEATURE
NFT – A Token of
Ownership, Forever
C
ovid-19 accelerated the consumers’ shift to digital shopping. The retailers & the brands had to look for leveraging the power of technology to remain relevant in the pandemic-era world, and beyond. NFT is one such next big emerging tech trend for the retail industry.
What is NFT? To put it simply - “Non-Fungible Token” or NFT, is “A digital certificate (token), issued against a unique (non-fungible) digital asset, when traded digitally”.
Umesh Agarwal
Retail Business Professional and Practitioner GUCCI acquired the much talked about Ghost GIF which it bought in $3.6K and put on sale for $16k. McDonald’s launched NFTs for their iconic Menu Items
The owner of the asset lists it for trade on a block chain (a secure digital ledger technology) and buys NFTs against it. Thus, the token becomes available for others to bid/buy/view. Every subsequent buyer becomes the new owner while the original owner still retains and remains the owner of the physical asset forever. All the past and present details of the creator, owner(s) and the reserve price are dynamically updated and always remain accessible to all. NFTs have some unique advantages for the Retail Industry as they can be used: By the consumers to pay for their purchases To issue against each product a consumer buys so that they own it in both physical and digital format To replace loyalty points with NFTs
The year 2017 is when the NFT came into existence with CryptoKitties, a block chain game, where each NFT was a unique digital pet.
NFT – How retailers and brands can leverage NFTs? NFTs became prevalent with the digital artwork space. With the passage of time, it creeped into other industries as well including the retail. The fashion designers and luxury fashion brands were the first ones to jump on the NFT bandwagon. Below are some classic examples of the humongous monetary benefits it offers: A digital artwork referred to as “Everydays-The First 5000 Days”, was sold in $69 Million in March 2021 at Christie’s. Nike sold its very own, one-of-a-kind, digital sneakers. It patented a block chain enabled system called CryptoKicks.
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To customize products as per individual consumer’s preferences To create limited edition products in partnership with celebrities, artists, sports clubs etc. To prove authenticity and fight against counterfeits To sell to raise funds for a social cause or to create an alternative revenue stream As entry invitations/tickets to exclusive events It shows that, with some innovation, retailers and brands can take advantage of the current NFT frenzy and elevate their consumer engagement & brand positioning. NFTs have the power to provide sustainable growth and work as catalyst in their “road to recovery” in a faster manner.
