NFTs Can Be Integrated Into Web2 E-Commerce
Previously I wrote about how NFTs function on a technical level. Today I will give an overview of how this technology can be applied to the real world, specifically to e-commerce.
Put simply, the ability to reliably verify ownership, transaction history, and digital identity are essential e-commerce utilities that the blockchain can easily provide.
An NFT that grants membership in a certain brand’s loyalty program is a valuable asset in the right hands and represents a certain level of ownership over that brand’s success. As the brand grows, so does the value of the NFT and the value of what the NFT offers. The more popular the brand is, the more the NFT will appreciate. The owner of the NFT helped to build the brand with their purchase and is free to sell that asset at any time.
Transaction history, or sales history, is obviously vital data for any store. The blockchain provides a ledger to trace sales history, helping to verify the authenticity of purchases, which is important when determining the value of a product. Verifiable sales history can help determine if the product is original or owned by influential individuals. It can also provide 100% attribution to sales in affiliate marketing. There will never be any confusion over who made the sale.
Personal digital identity will eventually be a fantastic tool to help reduce fraud and bad actors in the marketplace. For now, the ability to identify individual products down to the unit level will have huge implications as well. SKUs and barcodes convey limited amounts of information. SKU data is only useful within an individual brand, and barcode data is generalized and can become expensive. NFTs will provide a universal inventory management system that can be accessed from any platform and can identify product and sales data on each individual item.
Below are some of SHOPX’s products, ReserveX, CommerceX, and MintX, and how they relate to ownership, sales data, and inventory.
Customer Engagement And Brand Loyalty
ReserveX is a SHOPX product that allows brands to mint brand-specific NFTs to give or sell to their customers. These special NFTs can be sold or rewarded to customers in any way the brand sees fit. Holding it will give the customers rewards or perks, which are also decided by the brand. While the NFT is sitting in the customer’s wallet, those perks will be applied at checkout.
One of the more notable perks of this ReserveX NFT is to allow the owner to “hold their place in line” when new, highly-anticipated products are released. In typical Web2 e-commerce, Automated Checkout Bots are often used to buy exclusive merchandise the moment it is made available, and then they resell that merch at a high cost. Loyal customers aren’t allowed to buy their favorite products at a reasonable price.
The ReserveX NFT will only allow loyal customers to participate in product drops. Each customer will be able to buy as many items as the brand decides is fair. If the customer is not holding a ReserveX NFT, the checkout button will not be clickable. Customers will also be able to see how many ReserveX NFTs have been distributed, how much product is allocated to each NFT, and how much product is left on the shelves.
This gives store owners an easy, convenient way to reward loyal customers with guaranteed access to product drops, discounts, and other perks. All of this utility at a low cost and through the use of a single NFT.
MintX, as you may know, tokenizes your real-life inventory. Commerce X uses this eNFT inventory to enable affiliate marketing. Consider it a B2B SaaS program that connects brands and their products to affiliates.
Each product represented as an eNFT will be placed into a global inventory that everyone can access. Affiliates can visit this inventory and select which product they want to sell.
eNFTs are built to automate the affiliate marketing process and give affiliates complete autonomy. When an affiliate sells an eNFT, their commission is sent to them directly. The brand then ships the product to the customer. The brand and affiliate do not need to interact during this process and this process also cuts out the need for expensive third-party intermediaries.
For a new brand, it can be incredibly difficult to access affiliate marketing options. Affiliate networks come with high fees, and dealing with various influencers is a full-time job. Contracts need to be negotiated and accounts need to be paid.
But with SHOPX, brands don’t need to do… anything. When you use MintX to create your tokenized inventory, you automatically connect yourself to CommerceX. The affiliates do the rest.
When an affiliate sells an eNFT, they get a commission based on what the brand is offering. If you want to offer 5%, then that’s your choice. It’s possible that your product warrants that low of a commission. You may find that increasing it to 6% or 7% results in a sudden increase in affiliate activity. Or if the holidays come around, you could increase it to 10% to see a surge in sales.
You might even find that a whopping 20% is justified based on your margins and volume. Or you could use a large number like that for a limited time to acquire new customers.
That’s how easy it will be to fine-tune customer acquisition costs based on your budget and margins. The best part is, those costs are only applied at the moment of a successful sale. No more paying and praying. Every dime you “spend” goes directly towards acquiring that new customer. Nothing is wasted on a lackluster sales campaign.
Inventory Management System
MintX’s eNFTs tokenize real-world products to standardize inventory management data. This will create a global database for all branded consumer products. Whether you are a consumer or a large brand, this data will be completely protected with blockchain technology.
New brands won’t have to worry about SKUs and other proprietary inventory management systems. Only one system will be needed, and it will stay neat and organized forever. No need to worry that the “website” will go down or that you will lose your data. It will all be safely stored on the blockchain, and the blockchain won’t fail nearly as easily as a centralized server might. Finally, your inventory will update in real-time across all marketplaces.
For example, if you have ten t-shirts listed in five blockchain-enabled markets and one sells, the other four markets will reflect nine in their inventory instantly. If all ten sell at one market and another market tries to make a sale, the sale will fail and the customer will not need to be refunded their money after being disappointed that the product was in fact out of stock when they bought it.