It goes without saying—all this Web 3.0 business is the next big disruption in tech.
Web 3.0 is the next generation of the Internet and it is heavily built on cryptocurrency, blockchain tech, and decentralizing power. Consumers will be treated like royalty and put on a pedestal.
In a sense, Web 3.0 will “reset” the power of consumers—giving it back to them instead of the advertisers who preyed on data. Of course, the big question on people’s minds is: how will this affect the eCommerce industry as a whole?
Last DTC Breakthrough, attendees got up close and personal with Dimitri Nikolakakis, Founder of DimNiko.com. He gave an in-depth talk about how Web 3.0—NFTs, in particular—will change eCommerce as we know it.
Crash course on NFTs
Non-Fungible Tokens or NFTs are still taking the digital world by storm, and they are essentially the boundary or the gateway to the Web 3.0 future.
An NFT is basically a certificate attached to a digital asset that is stored on a blockchain. Each NFT is unique because it can show actual proof of ownership and traceability.
To say this is a solid breakthrough is an understatement. After all, it’s very difficult to claim ownership of an asset once it’s uploaded on the web, right? It becomes easily shareable with the rest of the world and makes it easy for anyone to claim it as theirs.
The impact of NFTs on the art industry has been overwhelming, with teen artists who are making millions by creating and selling NFTs. NFTs have also infiltrated the gaming industry with NFTs integrated into play-to-earn games. Next up, as Dimitri emphasized—is the eCommerce world.
4 ways that NFTs can transform your eCommerce brand
Though cryptocurrency is on an upward trajectory, it is experiencing quite a crash right now. However, Dimitri mentioned that there’s going to be a massive spike in 2024, and that’s what brands would want to prepare for.
Here are four ways that will surely encourage eCommerce brands to start creating their own NFTs.
I. Experience precision and accuracy in identifying your most loyal customers
By releasing a limited number of NFTs, loyal customers can avail of token-gated content. Essentially, brands can set up exclusive deals or content that only customers with their brand’s NFTs can access. NFTs can also double as a membership card
What does this mean? Not all customers will purchase NFTs. So those who will buy NFTs can be tagged as loyal customers. Brands can zero in on them and focus on strategies to continue increasing their lifetime value.
Here’s an example: A brand called The Hundreds (an apparel brand in the US) released an NFT collection called Adam Bomb Squad. They released 2,000 NFTs and raised around 10M USD overnight. That is a true testament to the interest in NFTs plus the brand’s customers willing to buy in to be part of their exclusive membership circle.
II. Scale your loyalty programs like never before
Dimitri told another story, this time about an apparel company in Australia called Ichpig.
“A customer went to the counter to pay for a shirt. The guy behind the counter notices the hoodie that the customer was wearing and informed him that there was a very special product that was not part of the display—only available exclusively for the customer because he already had the shirt he was wearing,” Dimitri explains. “Naturally, the customer converted because the product was tailored just for him.”
This experience is something that Ichpig and other brands are trying to replicate at scale. And traditional loyalty programs hosted in Web 2.0 won’t help.
Here’s how Web 3.0 can help scale loyalty programs massively:
- The blockchain will help identify customers who have purchased NFTs
- These customers can then be added to the exclusive loyalty program
- The brand can offer token-gated content, benefits, perks, and other deals
III. Generate a secondary source of revenue
Here’s a quick list of how NFTs can contribute to eCommerce stores’ revenues:
- Selling the NFTs themselves can add to your eCommerce revenue as a secondary revenue source.
- If they are resold, you can still get a percentage that can be programmed to be collected from each secondary sale.
- NFTs will have a floating value based on how your brand is doing. If your brand is growing, the scarcity element will come in. Customers will want to have NFTs, and the existing NFTs will increase in value.
Dimitri gives an example:
Same thing with NFTs which can be sold for much more on the secondary market depending on their perceived value.
So for eCommerce brands that are into creating and selling NFTs, you can take a cut out of that secondary market, and not just make money from the first sale—the ultimate game-changer for the world of online shopping.
IV. Build a tight community around your brand
As your NFTs and your brand increase in value, you’ll start getting free referrals. You will start noticing brand ambassadors, loyal fans, and influencers.
What can you do with this newly formed online community?
- Collaborate with other brands and further increase your community of brand followers
- Strengthen relationships with NFT owners or brand advocates by creating top-tier token-gated benefits
In the UK, a brand’s NFT holder gets access to a VIP lounge where they can hang out with artists. Another brand offers a special customer support phone number for customers who own NFTs.
In short, NFTs not only help with generating revenue. They also help in community-building and creating a tight-knit network of engaged customers who are invested in supporting your brand.
Wrap-up: Don’t just hop on the trend—be one of the first brands to dive into it
Who knows what else Web 3.0 will bring us? The shopping experience may further transition into even more immersive experiences.
Stay ahead of your competition and start exploring what NFTs can do for your brand. Often, the best strategy is just to begin.