The NFT Craze is Coming to Retailers Near You
First published in the Sydney Morning Herald on 25 July 2022
From Pringles to activewear, there are few retail categories that have been left untouched by the NFT craze over the past year — and global tech companies are tipping Australians will soon see even more opportunities to buy digital tokens.
The rise and rise of “non-fungible tokens”, or one-of-a-kind assets that leverage the blockchain, has come at the same time retailers across the globe have faced citywide COVID shutdowns, rising inflation, and fears of recession.
In 2021, global brands started testing the waters by asking some of their most loyal fans to buy tokens. Adidas sold millions of dollars worth of an NFT which gave owners access to physical products, while Pringles launched a “CryptoTwist” flavour, available only in a digital format.
Closer to home, Penfolds launched a token that would give its holders access to winenot available for public sale.
While companies are still just experimenting with tokens, retail tech companies are taking notice.
There’s plenty of hype around tokens, says Loni Stark, vice president of content and commerce products at design software giant Adobe, with more to come.
“I think that what you’re seeing is that there is going to be a hype cycle of NFTs – it is like when mobile apps first came along,” she said.
“We went through this whole period where there were so many mobile apps and then people really figured out where they were valuable.”
Adobe, which makes blockbuster design software such as InDesign and Photoshop, is also an e-commerce platform for businesses. It has been rolling out tools to help companies launch NFTs since the end of last year.
Stark says the hope is that brands and developers push their way through that “hype cycle” to a place where tokens add value to physical products or build up communities around brands.
“There are companies that are investing in these in a smart way, thinking about the core business that they have and how NFTs can increase the value of that product.”
Brent Bellm, chief executive of BigCommerce, the Australian-founded retail software business, agrees there are ways retailers can use the tech well — but we’re not at the point of these being mainstream yet.
“It’s bleeding edge, not leading edge. Very few consumers have yet adopted them, and there aren’t a tonne of examples yet where it works,” he said.
Despite the hype, there are ways retailers can use tokens effectively, he said.
“Some of the clever use cases are getting into physical goods that come with an NFT. You authenticate that your physical item is the real thing.”
Tokens can also be used to simply better engage with customers – a critical task in a post-COVID world where consumers have shown just how sophisticated they are in navigating the thousands of buying options out there.
The consumer is so empowered and so knowledgeable these days. That really favours brands and retailers that respect that knowledge,” Bellm said.
Nick Abrahams, global co-leader of digital transformation practice at Norton Rose Fullbright, thinks NFTs will become a mainstream trend for consumers within the next couple of years.
Shoppers looking to buy a token from their favourite retailer with hopes it will be an investment that will go up in value should beware, however.
“I’m not a big proponent of corporate NFTs as an investment proposition. As an interesting way to become more engaged with the brand though, I think it’s good for people to buy them.”
Retailers that want to launch tokens will have to be thinking about how they are of use to customers, Abrahams said.
“It is a big sandpit at the moment, where people are experimenting – but there needs to be utility to it. The question [to the company] would be, ‘what’s the utility’?”
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