How to use NFTs for your eCommerce Business | Article – HSBC VisionGo
What is NFT?
Non-Fungible Token (NFT) represents a digital asset recorded on the blockchain that can be purchased with cryptocurrency. All digital items such as a photo, GIF, JPEG, music, video, and even a digital ticket for real live events can be represented by a token. Anyone indeed can download or have a copy of any of the digital arts, but buying NFT means that you have the ownership of that digital asset. A token refers to an asset or a unit.
The word ‘fungible’ means replaceable by another identical item. Therefore, following the meaning of that word, there is no such thing as an identical NFT. It is just like two diamonds or two live performance tickets with seat numbers. One diamond will have different value with another diamond, and a ticket for a front row seat of a live performance will have different value with the ticket for a back row seat.
How does NFT work?
Here is the NFT minting process. The data will first be saved in a form of block, and then the information will be validated before it is recorded into the blockchain. There is also information about the owner of the NFT and it is easy to be verified.
Since one NFT can only be owned by one person, selling an NFT means that there is a transfer of ownership between the previous owner to the new owner. Ethereum blockchain is a public ledger that allows that transfer.
Owning an NFT means that you:
- Can easily prove that you own it;
- Own it and nobody can manipulate it;
- Can sell it and give a royalty to the creator of that NFT;
- Can hold it forever as your digital asset.
Creating an NFT means that you:
- Can easily prove that you are the creator of that NFT;
- Can determine the scarcity. On the other words, you can decide how many replica exist;
- Will earn the royalties every time your NFT is sold;
- Don’t need any three parties to mediate the transaction because you can sell it in any NFT market or peer-to-peer.
How can eCommerce Business make use of NFT?
Give NFT as a reward
Besides the importance of interacting with your prospective customer, doing some surveys or beta-testing for the future development of your eCommerce business is not going to run well without the customer's involvement. You may want to give them an NFT as a reward for doing the survey in order to increase their involvement and maintain the relationship between customers.
The NFT can be a token to grant early access to your newly released product or other rewards that you think will make your prospective customer interested.
Pre-access to the new product through NFT
The usage of the NFT will be similar to the previous idea, but this time, the NFT will put your soon-to-be-released product in the trends in order to increase your new product sales. It has become a top priority for brands to build the hype before they launch the newest product.
NFT as loyalty device
Merchants can use the NFT as a loyalty device to your eCommerce shop, which is similar to a membership card. Therefore, the NFT can be issued as a proof of membership or proof or purchase. Moreover, since NFTs are unique to each other, they can customize the rewards for each NFT holder, such as discount, event access, early access to new products, and others.
Build Community for your brand
Using NFTs for your marketing strategy is a good thing because the sense of ownership of the NFT is likely to be appealing to your customers. They can use NFTs as their avatars across the internet and it will build a connection between each of your customers which will be the start of your community.
Make use of the scarcity
If you use the NFTs as the access to an exclusive special drop, it will build a secondary market for you. When one loses his/her interest in the drop, they can sell the NFT to their friends and you will earn a royalty from it.
Sell a digital goods
It is just what it sounds like. You can get additional revenue from selling digital goods or you can use it as a complement to your physical goods. Meanwhile, this will help eCommerce shops to deliver unique experiences to the customer.