With a 55% increase in sales compared to 2020 and moving around R$128.1 billion in 2021, NFTs have become a real trend in the cryptoactive world.
Thanks to the path opened by Bitcoin (BTC) and Ethereum (ETH), this new digital asset format has been attracting the attention especially of retailers, who are betting on NFTs to generate extra revenue and more opportunities for customer engagement.
The fashion industry is one of those that have adopted NFTs, reaching other levels of the purchase journey and resignifying the way people are consuming, and transforming their sales channels. You can read more about the industry innovations in the full article "3 innovations of the fashion industry in digital"available here on our blog.
But, after all, what is NFT? How can it be used within your business strategy?
These are the questions we will talk about in the following topics.
What is NFT?
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NFT is an acronym for "Non-fungible Token".
NFTs are tokensNFTs are tokens, that is, numerical codes with a record of digital transfer that ensure the authenticity of their owners. In other words, they are a way to validate ownership over a digital or real-world asset represented by a token.
Anything digital can be an NFT: an image, video, audio, a domain name, music albums, and even in-game digital assets (the famous skins, for example).
As the name suggests, unlike cryptocurrencies - such as Bitcoin - and various utility tokens, NFTs are not mutually interchangeable: if you exchange one coin of R$1 for another, it will remain with R$1. Now, if you exchange one NFT - such as a piece of art - for another, you will get something completely different.
What are the opportunities for NFT within retail?
Many brands are experimenting with NFT to attract online customers and have even developed their own non-fungible token designs to not only understand this market, but also capture sales. But there are other strategies where using this digital asset can pay off.
Check below some of the opportunities related to NFTs:
1 - Conquer new audiences
When a brand adopts or even develops a collection of NFTs, it can reach new audiences, especially the younger generations (Generation Z and Alpha).
This kind of strategy is excellent for those who seek a connection with future consumers, those who were born digitalized and don't see any difference between buying an outfit for themselves or for their avatar in a game, for example.
2 - Generate desire through scarcity
"NFT changes the digital game from abundance to scarcity," commented consultant Mitch Joel during the NRF Big Show 2022, an event where we were present and brought the review in three articles telling how the three days that brought together major retailers went.
As said above, NFTs are unique and with guarantee of origin, developing new product lines 100% digital stimulates the feeling of scarcity and increases the desire of customers for the brand, something quite common in the physical world and that is usually a good strategy.
The younger generations were were already born digitalized.
3 - New business opportunities
From a retail perspective, NFTs represent a new product line, expanding the brand into the digital and moving into several categories. An omnichannel omnichannel store can take a lot of advantage of this, since there are no barriers between the physical and digital worlds.
4 - Expand product co-creation
The digital universe opens up the great possibility of producing items that may have a life of their own in the physical world. For example, the clothes or shoes of a video game character can be so successful that they eventually take their place in the "real" environment as well.
Several retailers in the world are exploiting the power of NFTs in their brands. Particularly the omnichannel retailers that, due to the great opportunity this trend has brought, are increasing customer relationships, expanding shopping frequency, as well as generating new product lines and creating a virtual business arm.
So, did you like to know what NFTs are and how they are being used in the market?
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