E-Commerce & NFT's: Foundation 101
In the most foundational way, I wanted to dive into why and how NFT's could be a game-changer for the DTC industry.
I’ve waited for a long time, building up on my own knowledge base over the last weeks to be able to actually write this edition. Read through till the end for an exciting project that I’m working on that you too could be a part of.
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I’ve spoken to so many people who fear the unawareness around the crypto world. Believe me, I was one of you. And I started my journey into understanding some (and I use the word ‘some’ with utmost humility here) aspects of the Web3 world. And today we are diving into what WILL be a mammoth trend this year: NFT’s. Every word is cautiously used for a first time entrant in this space to grasp 100% of what’s written out here.
And we’re talking about: E-Commerce & NFT’s
Let's dive in.
WTF is an NFT?
To put it another way, NFTs can be viewed as digital files that make use of a blockchain platform for their distribution and owing to the fact that they are totally unique — and stored on a decentralised ledger — it is very easy to verify who their owner is.
Tenets of the blockchain world (specific & relevant for e-commerce):
- Non-fungibility (they cannot be copied or replicated)
- Lifetime tracking
- Data drivenness
- De-centralised decision making with token / currency owners
Here are reasons that make NFT’s an asset class of the future for e-commerce players:
- Streamline Digital Sales:
- In e-commerce, I see NFT technology as one way to help streamline digital sales and enable lifetime product data tracking, which was historically not possible. "eNFTs," as one can refer to them, could also empower a more transparent commerce ecosystem for the business as well as it’s customers.
- NFTs could have the potential to replace traditional SKUs with blockchain-based analogs, as well as encourage one-of-a-kind products. The model could also support a more equitable profit-sharing system, particularly for emerging brands.
- NFTs could enable e-commerce data tracking, as users can have lifetime access to every data point across the product's life span.
- Transparency in Online Supply Chain:
- What’s the one thing that e-commerce (of DTC) looks to eliminate? Middlemen. And I think that we've converged with the principles of blockchain here.
- NFTs alone have the potential to make it extremely easy for users to see the entire supply chain history of a product they've purchased, as well as "make the entire transaction life-cycle of a product completely traceable."
- It’s not just for customers, but also for businesses, it’s easy to tag the process at various stages of the product’s operational cycle and know if there’s been a drop in the process anywhere.
- Replacing Cash with Cryptocurrency:
- This is the easiest of the lot in the application of Web3 into e-commerce.
- But just imagine the hassle in tracking shipping, refunds or exchanges in ownership of products sold online. If one could buy using cryptocurrencies, not only would ownership be trackable, but also everyone involved in the transaction would be able to see the process since it's going to be available on a decentralised ledger.
- And this doesn't just start at the end of the e-commerce shop. Since the customer is paying in cryptocurrencies (say ETH), it could be backward integrated all the way to the source of the product, where the transaction is happening only in ETH.
- The sole reason why exchanging or returning certain products involves a lot of hassle is due to uncertainty of its ownership; thereby giving rise to customer frauds. All of this could be eliminated especially for reselling platforms, home rentals, coworking / coliving or any high-exchange products
- Increasing Backend Accountability:
- NFT’s are wired to demonstrate ownership and provenance.
- Now e-commerce backends are extremely complicated systems: a bunch of factory workers, quality checks, audits, etc can now be tracked as to who did them. Also the exact make, model, colours, ingredients of the products become easily accessible to end customers, thereby eliminating the risk of fraudulent activities throughout.
- Community Building:
- Unlike any other ownership, NFT owners are extremely vocal about the purchase of an NFT.
- The community consists of technology-adoptive users who are willing to be at the leading edge of the tech curve. If you are a business owner, who’s target demo converges with this mindset, you’ve found yourself a sweet spot.
- While traditionally building communities were restricted to the business owners to push out engaging content, the ownership of an NFT will foster engagement from each of its owners. And the increased affinity towards the brand will lead to higher recognition just by word of mouth. Straight up impacting LTV.
- Owners of brand NFT’s would be keen to sell them forward, thereby increasing the network organically.
The answer is YES.
A key part of the provenance of a physical object is associating a digital NFT and associated IDs and information. This can be done with tamper proof labeling such as QR codes and NFT smart labels which can be intrinsically linked to them. How does one go about buying / selling the NFT? Marketplaces available in India: OpenSea and WazirNFT Block-Chains that support and act as the backend fabric for sustaining the network for NFTs to be transacted.
- Binance NFT (India)
- Flow by Dapper Labs
Wallets that are must for both buyers and sellers of NFTs to have for conducting transactions using cryptocurrency. In India, the most reliable ones available are as follows.
Process – For new/first time NFT Buyers
Step 2: Backup the wallet.
Step 3: Buy the cryptocurrency you wish to use for transactions.
Step 4: Go to any NFT Marketplace of choice, select NFT to purchase.
Step 5: Pay/Bid using the cryptocurrency you already own.
Well, those were my two cents on how e-commerce & NFT’s could converge. Now on to some interesting game play:
If you are a DTC business owner and feel that you’d like to jump on to the NFT bandwagon, hit me up by spending 7 seconds on this form:
Link to form: https://forms.gle/sAE1A4KaHzXRcCqk6
This is only for e-commerce business owners who are looking to jump into the NFT world. I'm building (rather conceptualising) an interesting platform. Super-easy, very relevant and we're only testing waters. At best, we’d be a community of super-interested folks who can feed off each other’s knowledge base & energy to wade waters.
Also, couldn't help but share this: Lights Out got featured in Forbes, big one, yeah.
Well, that’s it from me on this one. I’ll write in soon with my next edition on another interesting topic. Until then,