Phygital NFTs — Opening Doors to New Web3 Adoption Opportunities
NFT is the talk of the town when it comes to cryptocurrencies and the DeFi space. This is even more evident when it comes to the non-tech audience and industry newbie community. While people are talking about Web3, DeFi and GameFi space, there are only two terms which are very popular among the audience — tokens(cryptocurrencies) and NFTs. Even those who are unaware of the existence of crypto wallets are still aware of NFTs.
NFTs owing to their Non-Fungible nature have a wide range of use cases and applications, which we have explored in some of our earlier posts. However, the utility examples primarily explored revolve around use cases limited to DeFi & GameFi space. Given its nature of existence, NFT is the one piece of Web3 & blockchain tech that can truly expand outside of these two industry spaces and truly help bring about the mass adoption of Web3 usability.
How is NFT able to open the door to newer opportunities?
NFTs exist in many forms such as audio or video or a certificate document etc., But these are primarily used inside the DeFi space. On the other hand, NFTs are also being used in Metaverse and exist as a digital asset in the virtual space and here comes the door to newer opportunities. Phyigtal NFT — also known as physical and digital NFT is a traditional NFT which is minted to represent actual physical items that exist in the real world inside a digital space (blockchain/metaverse) environment.
As more and more brick-and-mortar businesses look to onboard and adopt Web3 space there are two entry points where they can act immediately in today’s market — Payments space and providing a virtual experience of their service online via AR/VR experience in the Metaverse.
Phygital NFTs exist as an amalgamation of physical and digital nonfungible tokens, enabling these retail firms to provide their customers with a virtual environment where they can experience the firm’s products and services.
Aside from providing an opportunity to experience their products and services, Phygital NFTs can also be used to sell these products and services thereby creating an immutable proof of ownership which can be easily tracked in case of transfer/secondary sale of the goods. This helps prevent counterfeiting while also promoting customer retention for these businesses. Phyigtal NFTs also have their own large collector community especially if these NFTs are involved in sports and wearable industries.
Examples of NFTs in the retail business use-cases
Sports & Clothing brands are two primary sectors where Phygital NFTs are currently being used actively. Despite cryptocurrencies seeing a rocky price momentum, Phygital NFTs have served as great and consistent profit-generation tool for firms from these two industries. Some of the big brands that are active in this space include — Nike, Addidas, Gucci, Dolce & Gabbana, Starbucks and Tiffany.
As per a report from Analytics Insight, Nike — the sportswear giant was one of the earliest adopters of NFT and earned nearly $183.69 Million in total NFT sales & $90.59 Million in royalties while also seeing a whopping $1.3 Billion worth of secondary transaction volume. Addidas another sportswear giant and a rival of Nike also entered the NFT market with the debut of “Into the Metaverse” NFTs which were completely sold out soon after hitting the markets and recorded a transaction volume of $10.95 Million.
Here is another case study that shows performance data from various luxury clothing, sportswear and other retail brands active in the NFT space → https://dune.com/kingjames23/nft-project-possible-data-to-use
The ability to promote marketing initiatives in a highly engaging manner is the main advantage of adopting NFTs. Brands are able to allow their customers to participate in campaigns in a more immersive way by providing interactive experiences with NFTs. They are able to achieve this by creating unique digital assets, which can be used to offer exclusive experiences or access to products or events and this has proven to be a highly effective way to increase brand awareness. For this reason, more and more retail brands from the Web2 space are starting to adopt the use of NFTs as a means to enhance their client interaction and marketing initiatives.
Phygital NFTs have a strong value add and can be a part of any brand’s community initiatives. With more and more brands jumping onto the bandwagon, there is a high likelihood for more practical and cost-effective solutions to come into existence to allow retail businesses of any and all sizes to make effective use of NFTs as a tool to onboard and promote their products and services in the Web3 space.
The global NFT market size stood at nearly US$ 15 Billion in 2021 and is expected to grow as high as US$ 200 Billion by 2030 driven by the widespread adoption of NFTs, demand for collectables and the growing popularity of the metaverse. This makes Phygital NFTs a pivotal and effective tool to onboard the next billion users from retail markets to Web3 space.
