Digital artist Beeple’s first NFT artwork, auctioned off this asset for $69million. Actor William Shatner released a collection of NFTs of personal memorabilia from his career, selling 125,000 units in 9 minutes that included an X-ray of his teeth. While food giant Taco Bell commissioned a series of GIFs based on dishes from their menu then sold them online as NFTs with proceeds donated to their charity foundation.
NFTs or “non-fungible tokens” – “non-fungible” describing goods and assets that are not interchangeable such as owned cars and houses, while “fungible” is something like money which is easily converted. This doesn’t really hit the mark when clearing up the confusion about NFTs or why they are breaking a virtual ceiling, but the cool tech kids are lining up to buy them and if Beeple’s art is a sign of things to come – walk this way.
These unique tokens are a kind of crypto asset in the Ethereum blockchain with each NFT representing a real-world object like music, a video, a product and even in the case of Twitter CEO Jack Dorsey, his very first Tweet which sold for nearly $3 million. NFTs give the ability to assign or claim ownership of any unique – and that’s the kicker – piece of digital data made trackable by using Ethereum’s blockchain as a public ledger.
Bread and jam for retailers is the ability to pursue different strategies, all rooted in self-preservation. As suggested in a recent www.thehustle.com article the NFT hype cycle has gone nuclear in the last year with early use cases for brands seemingly fuzzy at this stage, and the retail sector seemingly figuring it out. For instance Nike acquired RTFKT, a virtual sneaker company that makes NFT’s in a push to outfit the footwear of the metaverse while Walmart filed patents to sell virtual goods in categories you might find on its shelves e.g. electronics, appliances, and sporting equipment. Each brand or retailer will want to make sure that if the metaverse does manifest that no one steals its existing value prop.
To date probably the largest beneficiaries of the NFT uptake have been artists. The idea that you can claim ownership by having it written on blockchain switches things up as reported by NextEarth – with advertising figuring this out around the concept of brands packaging “moments” and selling them as NFTs and the virtual real estate industry hooking onto the concept of combining virtual land with business development. Even suggesting that there is work underway by Decentraland, a 3D virtual world browser-based platform where users may buy virtual plots of land, to find a way to allow users to import NFTs form other blockchains, creating the potential to open up the world of commerce by giving it a completely new perspective on ownership.
Are NFTs for retailers the next big thing in retail innovation? Global RFID software provider Detego focusing solely on retail, believes there is but that it depends in part on your brand and target market. According to a survey by MorningReport, 15% of male respondents said they collected NFTs, compared to only 4% of female respondents. Based however on the growth of NFTs in the latter half of last year, it’s clear that NFTs will continue to increase in popularity in this sector. While NFTs for retailers are unlikely to go to market for some the Beeple-like extraordinary prices, it’s evidence of the profit they can create. The entire NFT market is expected to grow to $240 billion by 2030, and NFTs for retailers could offer brands a lucrative opportunity to enter a burgeoning digital asset market.
Detego noted furthermore, that in 2021, 80% of NFT purchases were made by retail buyers, despite the growth in high-value collector and institutional transactions. For this reason, the market for NFTs for retailers is promising – it could prove to be a major retail innovation in the next five to ten years. Additionally, the audience for NFTs for retailers is already there. 42% of millennials say they already engage in these types of purchases followed by Generation Xers, of whom 37% say they are collectors.
In addition, when considering if NFTs for retailers represent the future of retail, it’s also worth considering the as-yet underdeveloped applications of the technology. As tech becomes more accessible it will be easier for brands to explore these types of opportunities. Beyond investing in collectible NFTs, an additional advantage of blockchain technology that often goes under the radar is that retailers can use it to establish something like product authenticity and work ways to highlight supply chain transparency. Existing technology like RFID can be harnessed alongside blockchain to provide customers with additional information about their products.
Closer to home, Finder.com conducted a survey in 2021 which revealed that South Africans are less likely to use NFTs compared to our global counterparts with 8.3% stating that they owned NFTs -which is just below the global average of 11.7%. In contrast, “continental neighbours” Nigeria has a forecasted adoption rate of 35.4% which to date hands it the title of NFT capital of Africa. ITAfrica.com reported that it is still early days for NFTs in South Africa despite several high-profile auctions, including one – an image of apartheid struggle legend OR Tambo’s spy pen and a limited line of NFTs released by SA cricketer Dale Steyn.