NFTs are more than Bored Apes—and they could play a role in your organization

We’ve seen an explosion of non-fungible tokens (NFTs) in the consumer market over the last 12 to 18 months. At first thought, many consider them as nothing more than a tool to trade extortionately priced digital art pieces—you might have heard of the infamous NFT collection Bored Ape Yacht Club, which exploded onto headlines globally after individual NFTs were sold for millions of dollars. But delve a little deeper, and you will find a catalog of genuine business applications for NFTs and tokenization.

Enterprises of all shapes and sizes should look beyond consumer hype and endeavor to understand NFTs and how they could leverage them within their organization. Service providers are developing expertise to help you embark on the journey. If you’re a product manager responsible for driving innovation and exploring new use cases, partnering with a service provider might be the perfect place to start.

The NFT market has grown exponentially in recent years, but trading collectibles is just the beginning

NFTs are blockchain-based tokens representing unique assets. The tokens prove digital or physical asset ownership, which owners can trade. NFT ownership records are stored on the blockchain. The first NFT is believed to have been minted in 2014, but the tokens didn’t explode into the consumer market until 2020. NFT sales reached $25 billion globally in 2021, mostly attributed to digital collectibles and adoption in the gaming industry. However, the reality is that NFTs’ value extends far beyond their early use cases, and there are infinite opportunities for enterprise adoption.

A handful of forward-thinking enterprises are already leveraging NFTs in their organizations

Some enterprises have announced their plans to explore NFTs. Others have already developed proofs-of-concept, and a small number are already in production. One example is EY’s work with Italian beer company Birra Peroni, where Birra Peroni mints an NFT for each batch of beer it produces. Birra Peroni believes this will drive traceability throughout the supply chain, delivering transparency for key ecosystem players. Consumers can track the malt in their beer back to the specific fields in Italy it was grown in by following the NFTs.

A consumer-focused example is Spotify, which has been rumored to be testing token-enabled playlists that allow NFT holders to access unique music collections. Starbucks is integrating NFTs into its rewards ecosystem to enable consumers to access new experiences and ownership opportunities.

Enterprises should take three steps to kickstart their NFT exploration efforts

Leading IT and business services providers are working hard in the background to develop their NFT-focused offerings to support enterprise clients. In fact, in recent conversations for our upcoming enterprise blockchain Horizons study, NFTs and tokenization repeatedly emerged as one of the leading investment areas. To that end, we asked a handful of providers which key pieces of advice they would offer enterprises; three key themes emerged:

• Find a genuine use case. Enterprises must develop a basic understanding of NFTs beyond the consumer market and assess their usefulness in the enterprise context. Examine your organization and identify the best use cases for the technology, but also be willing to accept that NFTs might not be the right solution for you.
• Partner, partner, partner. Once you have identified potential use cases, find a service provider partner. A partner can support you with the technology, but a good partner will also help you navigate industry-specific nuances and existing and emerging regulations.
• Don’t be afraid of failure. NFTs, much like enterprise blockchain, still sit within the emerging technology category. That means there isn’t a detailed playbook for how best to leverage them, and early adopters will pave the way forward. To that end, not every initiative will be a roaring success; you need to embrace failure, fail fast, and move on even faster.

The Bottom Line: Enterprises should block out the noise around the consumer market and consider NFT’s potential value for their organizations.

If executives can look beyond the consumer applications and market hype surrounding NFTs, they might just identify opportunities to leverage them to drive new customer experiences or streamline business operations. You should allocate a portion of your innovation budget to exploring the opportunities for emerging technologies. NFTs should be on that list; otherwise, you might miss an opportunity to streamline your operations. Find a suitable partner with the right expertise and capabilities, and start your tokenization journey today.