Whether you are for or against NFTs, or still don’t really understand them, it’s hard to ignore the combination of consumer interest and brands moving into the space. As a consumer researcher with a focus on emerging technology, I knew I needed to learn more about this space, but struggled to find time to properly dive in. So at the end of last year, with a period of extended leave coming up over summer, I made a commitment: I would learn enough about NFTs to buy at least one.
I made this journey out of personal interest. Still, as a CX researcher I couldn’t help thinking about my ‘journey’ – the barriers and facilitators I experienced, and how I felt along the way. I discovered quite a convoluted path to purchase that can go wrong in many ways. Yet once I figured it out and made my first purchase, I noticed a real sense of achievement and desire to do it all again. I now own eight NFTs, which is seven more than I thought I ever would.
Based on my experience, I can see the potential for NFTs and am starting to understand the appeal to consumers. At the same time, there are quite a few big CX barriers that limit appeal to a wider audience of consumers, in addition to the big issues around security and the environment noted above. Below I’m going to share my experience as a first-time NFT buyer, to highlight these CX issues, and also explore how I think they can be solved. Let’s dive in!
You mean there’s more than one blockchain?
As I started my journey, I knew my goal was to buy an NFT but I hadn’t thought much further than that. I didn’t have any idea of what sort of NFT I wanted, or really even what types there were. I deliberately avoided reading too many technical guides, as I wanted the true new consumer experience. I naively assumed a good place to start would be finding an NFT collection I’d like. Yet, as I started that search, I discovered there is a preliminary step: deciding which blockchain I wanted the NFT to exist on.
This was a real surprise to me, as most articles I had seen appeared to talk about ‘the blockchain’, as if it was a single network that linked everything together. In fact, there are multiple blockchains that operate completely separately, based on different cryptocurrencies. While I don’t quite understand the technical differences, I know they don’t integrate with one another – at least not easily. This means if you buy an NFT on a particular blockchain, it stays on that blockchain. The most popular one for NFTs is Ethereum. Yet there are also NFTs on a Cardano blockchain, and some on Solana. There may be others, but finding three was already enough complexity for me as a new buyer. I imagine it would be overwhelming for others, too.
This step reminded me of a highly influential academic paper1 on omnichannel retail that I have used frequently. The authors detail the joint decision all consumers must make regarding which brand to buy, and which purchase channel to use. Those choices are linked; the choice of brand affects channel choice, and vice versa. The choices of NFT and blockchain are similarly linked. As a consumer, you have to decide whether to choose an NFT you want to buy and use whatever blockchain it is on, or pick a blockchain and select from the NFT options that exist there.
This can be challenging, even for consumers who understand the differences between the different blockchains. For the average consumer, it adds an extra level of complexity that many will neither want, nor be equipped, to consider. I followed the majority and chose the Ethereum blockchain, partly because it seemed to be the most developed. It will be interesting to see whether future consumers will accept multiple blockchains that don’t really integrate. Will one win out as the home of NFT projects or will a way to integrate these chains emerge?
We don’t accept that currency here
Once I had limited my search to Ethereum, I thought it was time to buy Ether, the cryptocurrency for the Ethereum blockchain. I learned I needed to access an exchange to use my Australian dollars (known as a fiat currency) to purchase Ether. I signed up for Coinbase (quite easy) and used a debit card to purchase Ether (also relatively easy), for a relatively small transaction fee. I was feeling confident – I now owned cryptocurrency!
Then, I searched the OpenSea marketplace and found an NFT I liked. It was a “Shut Up Jason” GIF from comedian Jimmy Rees. I thought it was fun, supported a local artist, and was potentially a good personal reminder to have on hand. I went to purchase – and found multiple currencies. While other NFTs were listed in Ether (which I had), the one I wanted was listed in Wrapped Ether (which I did not have). It turned out this NFT was on Polygon – a sidechain to Ethereum. It felt a bit like having Australian dollars but wanting to buy something in American dollars. They are both called dollars but are different things.
This left me with two options. I could exchange my Ether for Wrapped Ether by paying a large transfer fee. Or I could buy Wrapped Ether instead, essentially starting the process again. Neither option is the kind of seamless CX we now expect in retail, and this made me appreciate how far most e-commerce payments options have evolved. I decided to buy new currency, as the idea of losing most of my value in fees was not appealing.
Have you got your wallet?
Even after I worked out what currency I needed, I was still left with the challenge of figuring out where that currency needed to be. I thought of the exchange I used (Coinbase) a bit like a net banking app. I could see the currencies I owned and could transfer them in or out, so I assumed I was ready to purchase. That’s when I discovered wallets. Think of it like this: An exchange is where you buy or sell cryptocurrencies themselves, a wallet is where you withdraw those currencies to make purchases.
I needed a wallet to pay for my NFT, and to store it once I bought it. There are quite a few to choose from, but I saw that MetaMask was one of the most common. I set one up relatively easily, noting the many warnings to keep my unique source phrases tightly secure. Now my problem was that my money (Ether) wasn’t in my wallet, it was on an exchange. I could transfer from the exchange to my wallet, but would again have to pay a transfer fee that was more than the purchase I was trying to make.
At this point, I was ready to give up. After all, I’d now bought multiple currencies on an exchange I couldn’t use to make my purchase. That is when I saw my saviour – a ‘Pay with Card’ button. This is a relatively new feature on a select few NFT marketplaces, and not available in all locations. Instead of transferring in cryptocurrencies and paying blockchain transfer fees, I was able to use my card to pay the exact amount I wanted. It was by far the easiest experience I’d had to that point, and, honestly, is the only reason I continued with the process. It was also a perfect example of why we talk so much about designing facilitators to support CX, and trying to remove so many barriers. This one feature essentially saved my purchase journey, and meant I could achieve my goal. I am now the proud owner of a GIF telling me to shut up – because who wouldn’t want that?
Where to from here?
My experiment of buying my first NFT taught me a lot about the space, and highlighted a lot of CX challenges. Some detractors have listed these challenges as evidence that NFTs are at best a novelty that will die, or at worst a complete scam. While these challenges are definitely barriers to adoption, I still see the potential of NFTs, for two main reasons. First, after successfully making my purchase, I felt a real sense of achievement and subjective ownership over my GIF. When I shared it, many people I had never met congratulated me on owning an NFT and welcomed me into ‘the club’. While I made a small purchase for fun, I had already started to see and experience the subjective value that NFT ownership can have.
Second, barriers to CX are common in any innovation. They are part of the natural innovation process and lead to new solutions – some of which are already emerging. For example, Sydney-based Immutable operates a ‘Layer 2’ solution that is a bit like a shared marketplace. Once funds are deposited (which can be done with a normal payment card), NFTs can be bought or traded instantaneously without any fees. Immutable even has ‘play and earn’ games like Gods Unchained and Guild of Guardians, where players can earn NFTs just by playing, which is free. These types of solutions could have a big impact on the mass market, and major retailers agree. Immutable has already partnered with GameStop to support NFT gaming.
So while there are numerous challenges, and some that are quite impactful, I’m curious to see how the NFT market evolves. As more big brands and retailers enter the space, the big question will be how they help new consumers get involved. The current CX challenges will limit the mass appeal of NFTs but once consumers are in, they seem to stay. My first NFT purchase has now turned into eight – so who knows what could be next?
1 “The interrelationships between brand and channel choice”, by Scott Neslin et al, Marketing Letters (June 2014).