The role of NFTs in creating a phygital shopping experience
The emerging role of NFTs in the fashion shopping experience
Famous brands, such as Louis Vuitton and Dolce & Gabbana, are already taking advantage of NFTs. This technology can be used in a variety of ways, from creating virtual collections to enabling augmented reality experiences in shopping apps and websites. That is why it can be a resource for creating a satisfying phygital shopping experience.
What are NFTs and how do they work?
NFT stands for Non-Fungible Token, and refers to a type of cryptographic token that represents unique digital assets.
NFTs are immutable and non-interchangeable and can be used to represent different types of assets like art, music, videos, or any other digital items. They use blockchain technology which makes them securely trackable and verifiable. It means that NFTs are resistant to counterfeiting, they cannot be changed or edited, and they have a record of ownership that is tracked. Plus, they are marketable. The NFT market is growing rapidly, with NFTs being used in the sale of digital assets like video games, artworks, and music. When someone buys an NFT, they become the sole owner of that NFT and can do whatever they want with it.
What is a phygital shopping experience?
This type of shopping blends physical stores with digital platforms to create an immersive environment. It brings together physical and digital elements to provide customers with a unique, interactive and engaging shopping experience.
Examples of physical shopping experience include providing personalised product recommendations based on customer data or integrating social media platforms into the buying process while the customer is looking at the items in the store, or offering augmented reality technology to virtually try on clothes and shoes while surfing e-commerce and then booking the pickup of the garment in the store.
Today, setting up a phygital shopping experience is necessary, especially if the fashion brand audience includes Millennials and Gen Zs. For these generations, the use of digital technologies is natural and expected, and companies must adapt if they do not want to lose competitiveness.
Ways in which NFTs are useful for creating a phygital shopping experience
Let's look at some of the reasons why NFTs can prove useful:
1) Secure and fast payments
NFTs can be used as currency for purchasing products and services from the brand. They provide a secure way to store digital payments and make transactions easier, faster, and more efficient. This makes NFTs an attractive option for fashion brands looking to offer customers a unique shopping experience with digital rewards.
2) VR e AR
NFTs can be combined with AR to create an interactive experience for customers, bringing fashion pieces to life in their own homes. For example, NFTs can enable shoppers to interact with a virtual version of the collection, making it easier for them to make decisions about what items they want to purchase. NFTs can also be used (both online and in brick-and-mortar shops) to give customers access to limited-edition items while they are shopping, as NFT marketplaces offer rare and unique digital assets.
3) Engagement
Through NFTs fashion brands can give customers access to exclusive content. For example, brands can create unique digital items and link them to their products and then offer customers a special reward for buying the NFT or the product. This could include access to limited-edition fashion pieces, exclusive fashion shows (both in the real world or in the metaverse), discounts, sneak peeks at upcoming collections, or even early access to new products.
4) Loyalty
NFTs can be used to reward customers for their loyalty with something that could one day be quite valuable - in 2021 the NFT "Beeple's Everydays: The First 5000 Days" was sold for $69.3 million!
Without flying so high, collectibles are a great way to build customer loyalty and keep the memory of the brand alive in them.
5) Physical products
The purchase of NFTs can be used to unlock access to physical products or services, especially products that customers might not otherwise have been able to purchase, such as limited edition items. NFTs also offer customers the opportunity to securely purchase items that may not yet be available in stores.
5) Authenticity
As mentioned above, NFT technology can protect digital assets so that they cannot be copied and ownership is certain. These peculiarities can also be transferred to the physical product to which an NFT is connected. Connecting an NFT to a physical product is thus a way to make the latter unique and make counterfeiting more difficult. Also, in case the item is resold online, the presence of a unique NFT would assure the new buyer of the authenticity of the item.
As we can see, NFTs can act as a bridge between online and offline shopping and enrich the consumer experience with extra elements. Something similar happens with connected products, which are items that have both digital and physical components, allowing companies to track and monitor data about the product itself, but also to communicate with the customer and offer services related to it.
The key to a company's success is primarily through the relationship it is able to build with the customer. Trust, engagement, loyalty, and authenticity are all values that help fashion brands create a strong bond with people. And both NFTs and connected products help to achieve this result.
