Did you know, Chloe Clem – a young girl who went viral after a picture of her unimpressed went viral, has sold her original photo at an auction for thousands of dollars.
The picture is being offered as a “non-fungible token” (NFT), which represents ownership of the digital image. Unlike Bitcoin, which was looked upon by many as a digital form of currency, NFTs are now seen as a digital form of collectibles, although many fear they might be the next bubble.
Let’s take a ride on all things NFT and how Shopify helps e-commerce brands to leverage digital tokens in their store.
NFTs – what are they?
For a long time now, the acronym ‘NFT’ has been floating around the internet, but people are still trying to figure out what they are. NFT stands for “Non-Fungible Token” a digital product that can be purchased online using a blockchain.
An NFTs are digital assets (in the simplest sense), like links to files and records of their owners. NFTs can be produced (certified) by adding them to the Ethereum blockchain, which acts as a ledger – a sort of digital certificate that can’t be tampered with or lost to ensure they belong to a specific individual. Customers can purchase NFTs from creators on online marketplaces that act as “trading floors” and receive ownership of them on a blockchain and by using a crypto wallet on the blockchain, you can manage the NFTs you own.
How will NFTs affect e-commerce?
E-commerce brands, technology solutions, and agencies are all benefiting from the growing popularity of NFTs. Due to the growing demand from consumers who wish to build a personal connection with the brands they purchase from, loyalty and rewards programs are in high demand. Here’s where NFTs come in, they’re like loyalty programs on acid. NFTs give e-commerce brands the ability to offer discounts, grant membership access to exclusive events, etc. In addition, early supporters and loyal customers may be given NFTs as gifts. Customers who receive financial rewards are more likely to participate and promote the growth of your brand.
For e-com brands, NFTs can also create a sense of community and encourage people to invest in your brand (by offering NFTs to your customers, they can become collectors).
And the benefits aren’t limited to businesses. NFTs along with all its perks can be sold for a big profit to early supporters of growing brands.
Shopify helps merchants who want to sell NFTs.
Although NFTs have been around for some time, most people are only just beginning to understand them. Shopify realised the importance of NFTs as they were among the first e-commerce platforms to allow merchants to sell them through the platform. Using their Shopify Plus store, the NBA Chicago Bulls began accepting credit and debit cards for the sale of NFTs (digital artwork of champion rings) in 2021.
At this time, Shopify Plus merchants can join the NFT beta program, which lets them create and list NFTs on popular blockchains using apps from Shopify’s partners. After that, they can sell them however they want, whether that’s Shopify Payments, credit or debit cards, cryptocurrencies, or Shop Pay.
In the future, what will Shopify and NFTs do together?
Getting started with NFTs is exciting for Shopify, but there is still uncertainty regarding their future. For instance, the NFT beta program is not clear which blockchains are available to merchants. Currently, Shopify provides only Ethereum and Flow, but in the future, it will be possible to select which blockchain to use.
In addition, Shopify has not stated when this program will be officially launched, and the beta phase remains exclusive to US-based merchants.
While this may be true, the fact that Shopify is the first e-commerce platform to offer an NFT solution indicates the platform is leading the way for e-commerce to participate in NFTs and making it easier and more profitable for both merchants and customers at the same time.
In our opinion, based on the ever-increasing number of e-commerce stores built on the Ethereum network, Shopify’s next step should be to integrate crypto into their platform – for instance, through a Shopify app.
Let’s wrap up
As a result of the pandemic, e-commerce has seen massive growth over the past few years and that trend will only continue. Similar to these NFTs, which began as online communities for digital artists and small businesses, now feature in loyalty programs and online stores for household brands. It seems safe to suggest that they won’t just be another trend with their increasing popularity and rapid mainstream integration. As a result, it is now time to educate yourself about NFTs and use them to your advantage if you have not already.
Get in touch with us if you have any questions on NTfs or if you’d like to know more about Shopify products and how to keep your store up to date with industry trends.