Lately, they have been discussed more and more: NFTs. Digital artefacts that make the hearts of the consuming and enterprising Netherlands beat faster. The market for these non-fungible tokens is growing rapidly, and entrepreneurs’ eagerness to dive in is even stronger. Suddenly, more doors open for online retailers, but what makes sense: to kick that door into the blind, or to look carefully through the keyhole?
First a little background. Because no matter how much you read about them, for most consumers they are still hard to understand, these NFTs. A non-fungible token is loosely translated as a non-interchangeable digital ownership certificate on the blockchain attached to a unique digital object. The buyer of an NFT therefore owns a unique digital product, which it is easy to find out via the blockchain that the owner is the owner of. The registration of the NFTs is linked to a personal digital wallet; this allows the owner to prove that he owns the digital product. However, the owner does not have exclusive rights to the specific item. It’s all about financial ownership.
It sounds complicated, and it is. Technical expert Jarno Duursma summed up this description on his blog as follows: ‘If we translate this into the physical world, you have a certificate of ownership that is in a safe that only you have the key to. Because you have the key, it’s crystal clear that you’re the owner. Because the safe is made of glass, everyone can see what’s in it and everyone knows you own it. ‘
So much for the explanation. The bottom line gives the arrival of NFTs a unique opportunity for brands to enter a new market. But is it wise to invest in it now? ‘I would not go blindly into NFT development right now. Firstly, it costs a lot of capacity and secondly, a large development budget, says Henk Hofstede, sector banker Retail at ABN Amro. He follows the development of blockchain and NFTs and recently wrote an article about the phenomenon. Bottom line: It will take some time for NFTs to make a significant contribution to the revenue of especially fashion retailers, but they are already adding value in marketing and creative areas. ‘We are still far from where we want or can be, but NFTs and more broadly the meta-verse will have an impact on the physical shopping street. If the creators of the metaverse do what they promise to do within the next ten to fifteen years, it will even have a huge impact. Because you can easily go into the shopping street, watch and buy products via new digital channels. It will become more common over time.
“It may seem like a far out show now, but one has to remember that not so long ago no one had a cell phone. It is now an indispensable part of our lives. The Internet is a 2D variant, and the meta-verse is the 3D variant, where you will soon be able to completely lose yourself in a new reality. ‘
Hofstede already mentions it: the metaverse. Since Mark Zuckerberg of Meta (the parent company of Facebook) announced the arrival of the new digital reality last year, a number of brands have eagerly jumped on this bandwagon. NFTs are closely linked to this because they allow consumers in the meta-verse to buy and own products and thus create their own digital identity. Hofstede also states that NFTs provide opportunities for fashion retailers, especially those active in the luxury segment.
One of these players is Winkelstraat.nl. Late last year, this platform launched an NFT (EE) in collaboration with artist Gab Bois [van Tee-shirt, red.]: specifically a physical T-shirt with the artwork Organic Organs on, human organs depicted in fruits, which can be admired through an AR filter and auctioned off to a lucky person via the NFT marketplace Opensea.io. ‘NFT is a hot topic, especially among young people’, begins Winkelstraat.nl founder Joost van der Veer: ‘We find it interesting to learn how we can combine the two worlds of crypto and fashion, and that’s how this project became born. The idea of NFT, ie the digital certificate of ownership, is very interesting to develop a concept around. We are constantly asking the question: how can we be relevant to the young target group we are addressing? And we launched the NFT (EE) under the banner of a new way of ownership. Our brand promise is: we help you own it and sell unique goods where we want to help people develop themselves. It fits in very well with that. ‘
According to Van der Veer, NFTs are still a thing of the future for retailers and entrepreneurs. This does not apply to young people. ‘Where fashion is very visible in the physical world, young people are already very much present in the digital world. Therefore, it is interesting to make the connection between the physical product and to be able to take it with you into the digital world. It started with games and in the days of Farmville. You used to be called crazy for spending money on a digital cow. It’s not that weird anymore these days. Virtual fashion is something that keeps getting bigger and bigger. You already have brands that offer more and more virtual products, for example sneakers. But also that you can wear those sneakers in a game. For example, Balenciaga developed a collection specifically for the game Fortnite. ‘
Of course, the Twinkle editors could not resist doing ‘anything’ with NFTs themselves. Therefore, this article – about NFTs – is also for sale as NFT. We are therefore the first trade magazine in the Netherlands to offer an article like NFT. NFT is available through the OpenSea.io marketplace and through the QR code pictured below. Unique opportunity!
As Van der Veer points out: brands and retailers are fully committed to metaverse and NFTs. In fact, it is so popular that the undersigned, while writing this article, received a press release from the Spanish retailer Mango, which – yes – enters the meta-verse with three NFT works of art. But is it not too early? We talked about this with Kjeld Staps, owner of NFTs.nl, a company that helps Dutch entrepreneurs, artists, musicians and celebrities to create, launch and sell NFTs. ‘What we’re encountering at the moment is that the technology that NFTs offer is gigantic, but the backside of the digital infrastructure is not there yet. So the ideas that companies have now cannot be properly implemented yet. I would not say it’s going too fast, but it’s still evolving. Just like bol.com and Amazon started with book sales and later expanded it. ‘
According to Staps, in the near future many companies will be set up to offer new services related to NFTs because that market is still in huge development. But once the digital infrastructure is in order, there will be many opportunities for online stores, and not even just at the product level. ‘NFTs provide some verification, an NFT can prove you own something officially digital,’ Staps continues. ‘It works on a technique with codes, the blockchain technique. It makes it transparent and it can always be checked if it is actually the right product. Soon you will no longer only offer a product via NFTs, but you will also be able to attach a service to it. So as a consumer, you own a particular NFT of a brand, and that brand could give you the exclusive right to a part of a webshop that you would not normally have access to. A kind of entrance ticket. At the moment it is still the case that you log in to a webshop with username and password, later you can also log in with your digital wallet and also make transactions with it. So it’s very wide ‘.
The world of NFTs therefore does not end with digital fashion items, but for the time being, in addition to digital art, something that is often used. It makes sense, says Hofstede. ‘You can excel in this market. People like to wear an exclusive suit, dress or expensive glasses in the digital world that we will increasingly go into in the future. And not so much with a T-shirt from a mainstream brand. ‘ Van der Veer adds: ‘You have a large group of young people who go for premium and luxury fashion. Luxury fashion is already a very large segment. For them, it is super important to create an identity and an image. Make no mistake, for high school-age teens, crypto is already very much alive. It is simply the case that young people are much more involved in the digital world and therefore also with NFTs. ‘
Staps also sees the entry of luxury brands in particular at the moment. In terms of safety, NFTs are a step forward for these brands, he notes: ‘If you buy a Rolex now, you get a physical certificate with it, but how hard is it to counterfeit it? With the blockchain technology that NFTs are attached to, you can instantly check if it is a real certificate. A program is still to be developed in the system that contains certificates associated with physical products, but it will certainly happen. ‘
So the question that this article started with: should retailers and brands already connect, or is it better to just keep an eye out for a while? For Staps, this is clear: ‘Be patient now. Do your research and wait. Do not be afraid that you are missing something as a webshop owner. Better to wait for it than to jump in risky now. Because once you start working on NFTs, you make a promise because it’s on the blockchain forever. ‘
Finally Hofstede: ‘Many retailers currently have other concerns, such as recovering from the corona crisis, and they first want to establish a better omnichannel offering. NFT is then a step too far. You can not do everything at once. In addition, it is primarily the very large ones that have the capacity and budget for it. It is not yet for the average dealer ‘.
Shopify: ‘NFTs definitely interesting for shoppers’
Ecommerce Solution Shopify launched an NFT Beta program for merchants in America late last year. This provides an opportunity to create and sell NFTs through the platform. So far, the program can only be used by US vendors, but the platform sees many opportunities for the future. A short interview with Product Director Robleh Jama.
How does Shopify view the arrival of NFTs?
‘We think NFT is a very interesting tool that enables merchants to create great trading experiences. Of course, it’s nice to own NFTs, but even more exciting and attractive are the experiences that buyers can get with them. NFTs allow buyers and sellers to share a more targeted relationship – which is what trade is all about. “
What opportunities do you see for webshops?
“Through NFTs, Shopify enables merchants to showcase their individual creativity and authenticity. In addition, we believe that stores have many opportunities to build a deeper connection with their community using NFTs. Through token gating *, merchants can offer exclusive experiences to buyers who own their NFTs, such as the opportunity to purchase exclusive merchandise or attend special events. “
Is it something that is already for a wide audience, or is it for the ‘happy few’?
“We believe we are only at the beginning of discovering the potential of NFTs. In the future, we expect NFTs and token-gated trading to be available to a wider audience. The best thing about NFTs is not just buy them and show them off – it’s about what you get once you own them. “
In America, Shopify already has the NFT Beta program. Do you think this will be rolled out soon?
The ability to sell NFTs through Shopify store facades is currently only available in early access for the United States. But any merchant can start token gating on Shopify by installing an approved third-party app. “
* Provides exclusive access to a specific NFT.