Four Innovations Shaping Retail’s Future

What are NFTs?

NFTs can be confusing, but they become clearer if you know what NFT stands for: non-fungible token.

It gets even easier if you think of the dollar as a fungible token. If you give a friend a dollar and they give you a dollar, you’re both neither richer nor poorer. But if your friend gives you a bicycle for your car, obviously your friend has made an excellent trade, and at least you’re getting some good exercise.

A non-fungible token is something that can’t be easily exchanged for something else of the same value, like cars, bicycles, houses or land. So an NFT on the internet is kind of a rare and exciting thing. It’s a digital token that can’t be easily copied. Even though it’s on the internet, the digital image is unique. As it turns out, some people attach a value to an NFT.

Some businesses clearly think there’s money to be made in NFTs. Nike recently bought a virtual shoe company that makes NFTs.

Why you should care: The good news, if you find NFTs confusing, is that you might retire someday not having needed to deal with them. It could be a passing fad. But it also might be a future gold mine as the digital world becomes more and more popular — you might have no interest in owning a really cool NFT, but your customers might.

What is Social Commerce?

Compared with NFTs, social commerce is a breeze to understand, though it can be harder to execute. Social commerce is the act of selling products or services directly on social media. It’s not advertising a business on social media and getting people to go to a website after checking out a post on Facebook, Twitter or Instagram. Social commerce means shopping and paying for merchandise or a service directly on the social media platform.

Companies are noticing. Nu Skin, a beauty and wellness company, has invested heavily in its ability to offer social commerce.

Why you should care: The easier and faster a customer can give a retailer money, the better off its business is. Two more words to consider — impulse shopping. Social commerce was made for that.

What is Web3?

This one is a little tricky to explain because nobody really knows what Web3 is, or if there will be one. Imagine trying to explain the internet in 1985, when it existed but wasn’t being used by billions of people. That’s kind of where Web3 is now — more hypothetical than reality. If it comes to pass, Web3 would be a new type of internet service running on decentralized blockchains, the same kind of technology that cryptocurrencies use.

Why you should care: If Web3 comes about, it could mean that someday the internet is more decentralized and more democratic. Some visionaries imagine that some of the bigger tech companies like Google and Amazon would have less power on the internet and smaller businesses would have more. Stay tuned.

What is the Metaverse?

Kind of like Web3, the metaverse isn’t really here yet, but it’s on its way. The best way to think of the metaverse is as a digital, 3D type of universe. But the metaverse as many people imagine it will be a large interconnected digital world where users have a deeper, more intimate experience than staring at a phone or at a desktop computer.

Why you should care: The metaverse is coming, whether you’re ready or not. You don’t need to be ready now, but ideally your business will be prepared when the metaverse has arrived. Some businesses are already preparing; consulting giant KPMG recently opened an office in the metaverse.

Plenty of metaverse proponents envision customers who will someday buy goods and services in the metaverse. You could be supplying those goods and services, and chances are, you’ll pay for some of them yourself. Which will be interesting: Gas costs plenty in the real world; you have to wonder how much you’ll pay to fuel up your digital car someday.

Source: National Retail Federation