How do merchants use NFTs to promote sales and loyalty?

Authenticity certificates have long accompanied the acquisition of high-end products, collectibles, and artworks. These serve as confirmation of asset validity and ownership.

Corporate giants are quickly adopting the multibillion-dollar NFT business. However, how are merchants utilizing NFTs? What role will non-traditional retailers play in the future of retail? Learn about the potential that NFTs provide merchants, as well as how major brands are using NFTs to promote sales and foster loyalty.

NFT Explained for business

A non-fungible token (NFT) is a digital data unit based on blockchain technology. NFT is used to generate a unique code for any real-world product that cannot be replaced by another code.

NFT can digitally replace anything, including drawings, songs, shoes, license plates, and more. As a result, NFTs cannot be traded in the same way that cryptocurrencies can. A digital ledger governs NFT, and all transactions are conducted online.

The NFT market expands the popularity of NFT and transaction management. This is why venture capitalists (VCs’) interest in the NFT market has skyrocketed in the last year and shows no signs of abating.

In addition, the NFT is poised to disrupt the traditional concept of ownership. Transactions are recorded on a ledger, making it possible to determine the purchase information.

NFT is similar to economic innovation. It enables creators around the world to transact and pay quickly. This is significant because the trading market is broadening beyond the borders of a single country.

How do NFTs work?

As previously stated, the NFT markets are the first place to look if you want to purchase a non-fungible token. However, it is not all of the information you require. NFT cannot be purchased with a credit card or PayPal. This procedure necessitates the use of cryptocurrency wallets and currencies.

The pricing of NFTs on Binance Smart Chain is virtually always denominated in BNB. Ethereum NFTs are often denominated in ether (ETH). Both of these coins are available on the Binance platform and may be purchased. Send the funds to your wallet to interact with the NFT services.

Browser extensions for wallets include Binance Chain Wallet and MetaMask. Both can be linked to NFT fields. Simply transfer cryptocurrency from Binance to your wallet, then visit the NFT marketplace website and connect it to your wallet. Be cautious of bogus or dubious websites. If you use the site frequently, double-check the URL and consider bookmarking it.

If you prefer a mobile experience, Trust Wallet is an option. It is accessible on iOS and Android and supports a variety of blockchains.

Why NFT?

It's easy to see why, with a stunning $23 billion spent on NFTs in 2021.

Attention is followed by commerce. It tracked people's movements from stores to highway signs to television to social media and the internet.

Retailers are counting on blockchain technology (NFTs) and the metaverse becoming a new focus of consumer interest, with NFT sales surging, Facebook changing its name to Meta, and NFTs being named the word of the year in 2021.

NFTs introduce verification of validity into the digital arena, making digital asset ownership demonstrable, safe, and part of the public record. This opens up new options for firms in a variety of industries, bringing new value to everything from digital clothes to artworks to branded collectibles.

How do Merchants Use NFTs to Promote Sales and Loyalty

Maintain product quality

If a product is faulty, blockchain history allows businesses to check all the way through the supply chain. Retailers can easily recall products and address supply chain issues in a timely manner.

This means that blockchain, among other things, helps retailers better track the origin of their goods, gives them more control over what they sell, and ensures food safety. Because changes to data such as the date and location of production can be tracked, blockchain can also be useful for supply chain control.

This helps to eliminate untrustworthy suppliers, low-quality raw materials, and so on.

Handling counterfeit goods

Every year, counterfeit fraud costs the global economy an estimated $5.38 trillion. In this context, the advantages cannot be overstated.

To prevent procurement fraud, companies can use blockchain to ensure the validity of invoices. The requirement that all parties confirm transactions also helps to reduce fraud.

Because counterfeits lack this history of verification, retailers can guarantee product authenticity using blockchain. Of course, the information entered into the system must be verified.

Drive new business opportunities

Beyond all of the feelings about awareness, engagement, and loyalty, NFTs may provide merchants with something very tangible: new income sources. NFT sales are unlikely to overtake traditional sales, but they are a developing market with a massive industry.

Adidas' NFT sale generated $22 million in income thanks to its tremendous marketing value. In less than a year, NBA Top Shot produced nearly** $700 million** in total sales. In under seven minutes, RTFKT, which was acquired by Nike, sold over $3.1 million in virtual footwear.** Disney made $3.3 million** from the release after selling over 50,000 Pixar Pals NFTs.

In a nutshell, NFTs enable firms to increase their product range while strengthening their brand. They open up the possibility of a whole new revenue source.

NFTs are relatively inexpensive to create, may be made in any number, and can be sold without the need for manufacturing or shipping. This implies that you have complete control over the pricing.

All of these instances demonstrate that with NFTs, producers may set their own prices. Because the item is digital, the manufacturing and delivery expenses climb only slightly with scale.

Major merchants' best practices for using NFTs to build brand partnerships and collaboration:

1/ Louis Vuitton cooperated with renowned NFT artist Beeple for their NFT video game.

2/ Nike acquired the massive NFT sneaker brand RTFKT

3/ Gucci collaborated with NFT artist Superplastic.

4/ Visa announced its commitment to NFTs.

5/ Puma collaborated on four cat-themed NFT projects.

NFTs: the new frontier in retail?

The early days of NFTs are sometimes likened to those of the Web. The world was awash with forecasts about the Web's and eCommerce's future. Many people thought that websites would be the future of everything. Others argued that tech stocks were overpriced and that techno-optimism was wrong.

If the parallel isn't clear, many regard cryptocurrencies and NFTs as having the same life cycle. It has all of the same characteristics. This was true in the early days of the Internet. It was the case with Web 2.0 and e-commerce. The question is whether it will apply to Web 3.0 and NFTs and whether it's a risk your company is willing to take.

Explore our latest NFT project: the KFive Ecosystem, using NFT and Blockchain Ecosystem genetic code testing technologies to protect the rare genetic resources of Ngoc Linh ginseng. Don't hesitate to drop us a line if you need to build a blockchain solution for your business!