Amazon's Debut into ✨ NFTs ✨
Hey everyone, it's Chad! Before we jump into this week's newsletter, I've got some big news—I'm officially a graduate! This weekend, I received my MBA from the Wharton School and a Master of Arts in International Studies from the Lauder Institute, both at my beloved alma mater, the University of Pennsylvania. Writing for this newsletter has been an incredible experience this year! I want to thank all of you for being a part of this awesome community, and I'm pumped to keep working with Kendall on delivering fresh content for you all. So stick around because there's more exciting stuff coming your way!
This weekend was also a big one for Amazon, or at least that was the word on the street. And no, they weren’t canceling Prime Day (I think we’d cry) or acquiring AMC theaters (...yet), but it was the anticipated date for a big Web3 play from Amazon. In fact, it was the date Amazon was set to finally launch their NFT Marketplace!! What is it? Is it going to happen? What does this mean for NFTs? Let’s break it down in this week’s newsletter! And if you need a quick refresher on NFTs, check out our newsletter from last year!
So, what’s the tea on Amazon’s NFT Marketplace and why are they hopping in the game?
We all know Amazon has been a dominant force in the consumer space, and in an effort to stay ahead of the curve they made the decision to build their own NFT marketplace. Essentially, they’re creating NFTs (digital goods) that will be linked to physical goods, and these physical goods will be delivered directly to consumers. So far, here’s what we know:
There will be 15 NFT collections available to U.S. based customers upon launch, before expanding worldwide.
Users can purchase the NFTs / digital collectibles with their own Amazon account using debit or credit cards. No wallet necessary!
Customers will receive NFTs delivered to their NFT accounts while simultaneously receiving the physical piece of clothing tied to it at their doorsteps.
Wondering when this is set to release? Well, we are too. 😂The launch date has been pushed back for months now, and we were hopeful that it was going to be released by the time we wrote this piece, but here we are… no worries though, it’s a huge feat that we’re sure Amazon wants to get foolproof before they release it to their U.S customer base. Sometimes it’s hard to imagine what we haven’t yet experienced, but this has the potential to be huge.
A lot of people use Amazon… like A LOT
Sometimes we forget just how big Amazon actually is, but it’s MASSIVE! And here are a few figures to put things in perspective:
$434 billion dollars earned in revenues last year
300 million customers on the platform
95 million Americans subscribed to Amazon Prime (1 in 3 Americans)
1.9 million small and medium sized businesses selling on Amazon
7400 products sold per minute
So, as you can see - Amazon has a massive reach. When you have that kind of influence and you're a household name that's practically woven into everyone's daily routine, people naturally trust you. And when a company like Amazon puts their weight behind a concept that's been getting some serious heat in the media (*cough cough* NFTs), you can change the narrative. This could seriously boost NFT adoption! On top of all that, Amazon is a powerhouse when it comes to AI and other cutting-edge technologies. Just imagine the mind-blowing possibilities that could come out of that combo!
BUT… it can also backfire…
Case in point: Meta. Mark Zuckerberg took a huge bet on the metaverse a couple years back and it hasn't exactly been smooth sailing for them. In 2022, they poured a whopping $13.7 billion into the metaverse, and let's just say the results weren't exactly mind-blowing...
So what does this mean for Amazon? If Amazon makes a bet on an NFT Marketplace, and it doesn’t pan out, it’s not only a bad look for Amazon but for the entire NFT space. How many of you out there hear the words metaverse and immediately cringe now? We’d hate for that to happen with NFTs too, especially since NFTs have already gotten so much flack in the media though there’s so many great use cases out there for them.
What does this mean for the future of web3 consumer trends?
Of course this has the potential to go either way for Amazon–it could be a smashing success or a failed attempt at finding their lane in web3. But let’s imagine that everything goes according to plan and their NFT marketplace becomes a win for the company and the industry. What happens next?
An article by Sensorium shares some examples of how web3 retail & consumer may change in the future. See below:
Connecting online and in-person shopping experiences where users can also co-create products
Leveraging virtual and augmented reality technologies to allow customers to test products or try out items in immersive environments before deciding on a purchase
Personalizing product recommendations and enhancing shopping experiences based on AI algorithms to present customers with the right products
Better data privacy and customer protection via an opt-in system
Unlocking new monetization avenues through NFTs, collectibles, and other blockchain-based tools
Greater efficiency across supply chain with increased traceability and product sourcing transparency
Tackling counterfeiting and fraud across goods and services
On the positive side, in the case of Amazon, we’ll see much more adoption and acceptance for NFTs because it’s been validated by a tech giant. On the other hand, there could be questions around trust and safety for consumer data especially since Amazon and other tech giants have shown exploitative behaviors in the past. It feels like every week, we’re writing about the push & pull between needing big players to step into the space for validation and also recognizing that a fully decentralized world powered by blockchain technology might have to exist without them one day. In the meantime, we can’t be mad at them for trying! Let’s keep seeing how this plays out.
Thanks for reading ✌️
– Kendall & Chad