Today, many people see NFTs (also known as Non-Fungible Tokens) as simple images of collectibles and digital artworks that users sell at high prices. But NFTs are way more than that: they are digital assets that represent actual items such as videos, games, and art pieces. When you consider all the possibilities that NFTs promise, it will not be misplaced to say that NFTs are more than simple images.
As you may know, one can’t talk about NFTs without mentioning the Metaverse. But what is the Metaverse? The metaverse is the internet in a 3D model, and it’s a parallel platform to the physical world where people can spend their digital lives. Every user has an avatar that represents them, and they use it to interact with fellow users in the metaverse.
Thus, the interrelationship of NFTs and the metaverse provides businesses and investors with many opportunities. With this information in mind, we shall discuss “When NFTs Get Crucial for Retailers in The Metaverse” in greater detail.
They are tokens that are 100% unique. Essentially, NFTs play the role of certificates of ownership on the blockchain platform. Minting a digital file like a video, an image, a GIF, or a video creates an NFT. Since digital art and 3D assets are prone to theft, NFTs address this problem by providing an unbiased ownership status of these assets' rightful owners.
How does blockchain technology guarantee this high security level to NFTs you ask? Every new block connects to the previous blocks forming a cryptographic chain almost impossible to tamper with. A consensus mechanism validates every single transaction on the blockchain by making it correct and true. In addition, no one can alter the characteristics of the blockchain platform because of cryptography, which adds an extra protective layer to users' data.
This implies that NFTs have a unique identity and can be traded safely. NFT data is generally stored on a blockchain, differentiating one digital asset from the other. Thus, this prevents people from quickly making digital replicas of these assets. The authenticity of the NFT avatars is guaranteed because you can verify their identity through the blockchain.
Assume a person has a particular NFT that conveys their liking, belief, and support for a specific cause or project. Those NFT avatars will give a glimpse of a specific player's identity.
The uniqueness of NFTs will come in handy in defining virtual lands and spaces in the metaverse. Users can use NFTs to prove they own the real estate in their possession. For instance, users can use NFTs to rent their land, sell it for profit, build shops, and host social events at the real estate spaces in the metaverse, which include Decentraland, Treeverse, The Sandbox, and more.
Metaverse will allow you to immerse yourself in a virtual space where you can interact with your colleagues in real-time. Instead of the typical Zoom call, which provides a two-dimensional view and uses the camera, users will use goggles to enjoy the best VR experiences. It will enable users to connect and collaborate with others seamlessly, regardless of their location globally.
The imposition of Covid-19 restrictions during the Coronavirus pandemic meant that people could not freely attend sporting and entertainment events. NFTs and the metaverse helped people to interact and meet with their friends in the comfort of their homes.
The metaverse platform gives users a better shopping experience to try on virtual outfits and even test virtual appliances before purchasing these items. The benefit of this is it reduces the chances that people will get malfunctioning appliances and ill-fitting clothes. Buyers get to hold their items and view them from different angles. Therefore, digital fashion innovations have significantly reduced the need for customers to get physical samples during shopping.
The best luxury brands such as Louis Vuitton use blockchain-based tokens to guarantee the authenticity of their items. It allows them to safeguard their intellectual property's integrity, and they can legally use NFTs to back up their digital fashion pieces.
Luxury fashion brands can also use NFTs to connect with clients uniquely and share their brand stories. Approximately 65% of customers will buy from a brand they feel connects with them. NFTs allow luxury brands to develop a unique and exclusive experience for their customers, resulting in more brand awareness, better engagement, and more sales.
Brands will increasingly make NFTs more accessible by bringing them into the mainstream. For example, American Eagle used this tactic when it sold 120 NFTs for $1 each. The release incorporated a physical release, too, where American Eagle launched a patch as a collectible, and customers could then sew this patch onto their jeans.
Virtual shops offer a great way of accessing the metaverse because they bridge the gap between online shopping and traditional and in-store shopping. The emergence of virtual showrooms will ensure that customers can easily shop virtually and immerse themselves in a unique and exclusive experience.
Through an online auction organized by Christie's, Gucci auctioned off their newly-minted NFT inspired by their Fall/Winter 2021 collection. Their NFT borrowed many aspects from Aria, a four-minute film created to complement their runway show. Gucci's auction wrapped up when the final sale price hit US$25,000.
Taco Bell, a famous fast-food brand, auctioned an impressive 25 NFT GIFs on Rarible (a community-owned NFT platform that allows users to develop, sell or collect NFTs from creatives) to create more brand awareness and show support for a good cause. These NFTs aimed to commemorate the famous Taco dish. Here, the physical and digital worlds meshed together, and the buyer of the original 'Transformative Taco' got a US$500 electronic gift card. Proceeds from the sale of NFTs were then offered to the Live Mas Scholarship, a program supporting the education of young children.
Nike has also released an immersive 3D platform on Roblox dubbed NIKELAND. The sneaker brand has also collaborated with the University of Oregon to launch the NFT and physical version of Air Max 1s.
Louis Vuitton launched a mobile game dubbed "Louis: The Game" to celebrate its 200-year existence in luxury retail. The game has 30 NFTs that Beeple has designed. Players can look for and get these NFTs inside the game. However, the players cannot buy or sell these NFTs in an open market.
NFTs play an essential role in helping people to own digital assets ranging from artwork, music, virtual real estate, cars, etc. The metaverse will continue offering a platform where NFT owners can showcase their digital assets and create a community around them.
As a retailer, you should leverage the fantastic features of NFTs and the metaverse platform to improve brand awareness and allow it to go viral quickly. As a result, you can significantly gain a competitive edge over your competitors and boost your sales!