September 14, 2021
A Non-Fungible Token represents the best form of digital ownership to date, when this incredible technology is securely linked to the physical, it embeds a significant amount of value to what it is attached to. One of the main advantages that NFT-enabled physical products now have is the ability to be easily resold in virtually any marketplace on a particular blockchain.
The use of NFT’s is still very nascent, however, it will blend into our everyday lives in places you may least expect. NFT sales exceed a few billion dollars right now and though they’re mainly from trading digital art, we’re just beginning to learn to significance of its impact in modern commerce transactions.
The NFT marketplace allows for complete verifiable transactions that don't involve an intermediary—trustless and transparent. The eCommerce marketplace can be reconstructed to operate like an NFT marketplace but with physical items as opposed to solely digital collectibles.
Are NFT marketplaces solely limited to artwork, music, videos and other digital-only assets? Is there a place for NFT integration in places not associated with digital art like Bored Ape Yacht Club and Doodles in the near future? . We think NFTs can evolve and transform the trading of goods in eCommerce with NFT-enabled products.
They are physical objects that have blockchain provenance in the form of a NFT coupled with an encrypted NFC (Near Field Communication) tag that is embedded into the item. This NFT, stored on a blockchain, will be a way to prove true authenticity of the physical product.
This physical link between a physical item and its digital counterpart is one of our products called a SmartSeal Smart Tag. The encrypted NFC tag is securely connected with the NFT that is specifically minted for its physical counterpart creating an immutable digital twin. This solution will allow eCommerce stores to operate like NFT marketplaces by selling physical goods with the security and transparency that blockchain technology provides.
NFTs merging with physical products will create a new asset class called phygital products. These physical NFT-enabled products can represent provenance, digital identity, a certificate of authenticity and more. Think of it as a digital deed that can be attached to virtually anything. Now why should online stores be excited about this?
This dynamic concept can now take the convenience of online stores and the decentralization of NFT marketplaces to create a new marketplace meant for the first generation of Web3 all powered by a suite of our solutions. This is one where consumers will purchase their products with a new foundation of reliability which offers a more trusted shopping experience.
What does this mean for small online stores that want to connect more meaningfully with their end customers, and smaller brands that are limited to a few traditional online marketplaces?
Our soon-to-launch product where brands, creators and manufacturers can mint and manage their NFT-collections turned phygital products. The Notature application will allow product makers to encode each minted NFT within a collection into any of our SmartSeal Smart NFC tags, which are then embedded into each physical product.
Imagine the end customer experience where they buy your product, redeem its digital twin, and prove that they have sole owner rights. This means of authentication, makes it easy to transfer ownership if an end customer decide to put an item up for resale on the secondary market; the instant access across all marketplaces on a chain provides far greater liquidity for NFT-enabled goods.
Trends in the eCommerce industry suggest that global online sales will increase year after year as more online brands are launching and competing for market share.
Lifetime customer value is top of mind for current direct to consumer brands as performance-marketing has changed due to high advertising costs and major changes in user data privacy protection.
With this in mind, the rise of NFT-enabled products powered by our Smart Tags will give way to convert today's eCommerce store to a marketplace made for Web3. This means brand engagement and customer loyalty can be unified through the product, not only leading up to purchase, but beyond purchase as well. This creates a new status quo in the shopping experience dynamic for both brands and customers.
The reality of phygital assets as product necessity, and not just an exclusive feature is here. Customers are more knowledgeable surrounding their purchasing decision and want to be a part of a community so online retailers are producing more content on brand loyalty to gain the trust of potential customers. With phygital assets their experience can extend beyond initial purchase further strengthening customer loyalty.
Most online retailers typically only sell items to customers, it’s a one-way transaction. Imagine if your online store could also be the place for peer-to-peer transactions like one would find on eBay. Instead of having your products leave your store to be placed on a different secondary marketplace, provide competitive incentives that allow for that transaction to stay within your store's ecosystem. This can result in a community that is rewarded to keep continuing to engage with you.
Secondary retailers have their own “proprietary multi-step verification process with a team of expert authenticators;” but with the concept of in-house verification, consumers can resell directly to other consumers within the same marketplace where they initially purchased the item. This can dissolve the need for third-party resellers and authenticators with phygital assets making for a more streamlined shopping experience.
Buying and selling online with confidence is top of mind for consumers. Embedding NFT’s into products through SmartSeal Smart Tags can reshape the relationship people have with products, leading to the transformation of how online marketplaces will operate in a more Web3 environment. It can reduce and eliminate an array of steps because of the blockchain paired with encrypted NFC tags that are embedded into the enabled products.
Right now, online retailers should be open to exploring how they can innovate their online store with the NFT marketplace model in mind to create a new dynamic that gains back a waning customer's trust and confidence.
Notature is a SmartSeal Product. To enable your physical products, contact us here.