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Ecommerce platforms are exploring the market for digital collectibles
Following the rise of NFTs, Walmart, eBay and Meta are launching new tools to facilitate the exchange of digital goods.
Ecommerce has put the tools of the internet to powerful use, but it has long been centered on the movement of physical goods.
Over the last several years, a new wave of technologists and entrepreneurs have begun to explore the introduction of digital goods to ecommerce, where the value exchange lives entirely in the world of bits, without atoms.
After a period of study and testing, large platforms and retailers are beginning to move ahead with putting new tools to facilitate these transactions into wide release.
The area of digital collectibles is emerging as one of particular interest. Limited edition, collectors’ items have long commanded their own markets. Think of trading cards, action figures, limited-run pressings or the art market as a whole. Now, these are taking digital form. The emergence of tools such as nonfungible tokens (NFTs), which store harness blockchain technology to allow individual versions of digital creations to be available for buying and trading via cryptocurrency, are enabling the beginnings of a new kind of market.
Of the large platforms where ecommerce takes place, eBay has been among the earliest movers in this area. Given that the marketplace is already a place where physical collectibles are exchanged, the extension into digital collectibles makes sense in theory.
eBay has taken steps to put it into practice. The marketplace began allowing buying and selling of NFTs on its platform in 2021. The stated ideas behind the launch made it clear that it saw digital collectibles fitting into the platform.
“eBay has always been the world’s destination for buying and selling the most unique and hard-to-find items - and we’ll continue to be the destination for collectors of all kinds, physical or digital,” said Jordan Sweetnam, SVP and general manager of the Americas for eBay, wrote in an announcement at the time of the NFT expansion in 2021. “This opportunity unlocks new assets for collecting, new ways for people to fuel their passion, and expands eBay’s appeal to a new generation of collectors.”
The marketplace has picked up activity in this area this year. In May 2022, it launched an initial collection of NFTs on the web3 platform OneOf, which were new interpretations of iconic athletes featured on Sports Illustrated covers. In June, the marketplace took another step toward facilitating transactions when it acquired NFT marketplace KnownOrigin, which allows artists and creators to showcase and exchange digital works for collectors.
The eBay vault. (Courtesy photo)
For eBay, this is part of a wider strategy to provide space for the digital exchange of collectibles as a whole. It is also making big investments in physical collectibles, including a new vault for trading cards that provides storage and a digital marketplace, and the $295 million acquisition of TCGPlayer, a marketplace for collectible trading cards like Magic the Gathering and Pokemon. Those goods will require specific tools to solve their own set of challenges, including authentication to ensure items are what they say they are, and ensure they are truly limited in quantity. Yet it is emerging alongside the digital collectibles, and it’s clear that eBay sees the two sides fitting under its tent.
“One reason that we're excited to launch the Vault is because it can enable real-time transactions for physical or digital goods,” eBay CEO Jamie Ianone said on the company’s recent second quarter earnings call. “This intersection is nascent, the one that collectible enthusiasts are increasingly exploring. This is part of the rationale behind our second quarter acquisition of KnownOrigin.”
A potential connecting point was made more clear on Monday, when Walmart entered the fray. The retailer announced a new partnership with the National Entertainment Collectibles Association that will result in a new platform, called AutoT, that enables digital collectibles.
AutoT will have a series of rare variants of collectibles and figures that are signed by stars and creators.
Here's how it works: To access the platform, customers will be able to purchase a box from Walmart that is tied to a specific pop culture property. Upon purchase, they enter the digital code found on their Walmart receipt into a personal account at AutoTVault.com. This reveals which collectible item they’ve received. Collectors will be able to store a digital collectible for up to two years free of charge in the NECA’s Vault, or have a physical item shipped to them.
Launching on Oct. 6 at Walmart’s website, the platform will debut with collectible figures from Teenage Mutant Ninja Turtles, featuring Shredder, Renet and Foot Soldier, with potential for fans to receive versions of the digital figures signed by co-creator Kevin Eastman. Exclusive lithographs from the TV icon and artist Bob Ross will also be available at launch. New products are set to drop at regular intervals, Walmart said.
A Shredder action figure. (Courtesy photo)
For Walmart, this is an extension into a new form of commerce as it looks toward the future of retail, which has long been built around physical goods. Coupled with last week’s announcement that it is building a large experience in Roblox, it’s clear the world’s largest retailer wants to have a presence wherever goods are being bought and sold. The throughline here is that digital collectibles can usher in an evolution of shopping.
“At Walmart, we are always finding new ways to bring innovation and one-of-a-kind offerings to our customers,” said Laura Rush, SVP of electronics, toys and seasonal at Walmart US, in a statement. “NECA’s unique collectibles and inventive AutoT platform offer a new type of shopping experience to shoppers, ensuring that Walmart is bringing the best in tech and entertainment to customers nationwide.”
This may be a test not only of the tools and shopping functions, but also where value is shown. Will a person find value in a digital work that can be linked to its creator in the same they would a physical work that has touched the artist's hands? In other words, can Bob Ross' resurgence courtesy of memes and YouTube translate to people wanting to own a piece of his work?
NFTs on Instagram. (Photo via Meta)
Given that art is involved, it's also worth considering what will happen when the gallery wall is removed. The ability to display and share collectibles in common spaces may also be valuable. One avenue arrived last week. Meta opened up the capability for users to share digital collectibles that they have purchased or bought on Facebook and Instagram to everyone. These collectibles can also be shared between the two platforms. Making good on an announcement it made in May, Meta said users can now connect a digital wallet and display NFTs from those wallets on the platform, The NFTs will have a shimmer effect, and public information like a description of the NFT can be displayed. The work can be attributed to both the creator and collector.
As Ianone referenced, these are nascent launches. They may not be the versions that last, but they are important steps toward pushing this form of collectibles into wide release. Provide the tools, figure out what people find valuable and new markets can take root.
Trending in Economy
Walmart launches online hub for clean beauty
The retailer debuted a Made Without List to identify ingredients that customers may not want to be included in beauty products.
A new online shop at Walmart is helping customers find products that leave out the ingredients that don't live up to environmental standards, or their values.
The news: Clean Beauty at Walmart launched this week to help customers find products that are transparent about the ingredients included, and ultimately are made without chemicals that are harmful to the planet.
What’s in the shop? The online shop has more than 900 products, and Walmart said 80% are under $10. In an announcement, Walmart spotlighted products such as e.l.f. Mascara, Kinlo sunscreen, earth Shampoo and Cetaphil face wash.
How it works: To inform product selection for the Clean Beauty platform, Walmart developed a Made Without List to identify the ingredients that customers don’t want, and align with clean beauty standards. It contains over 1,200 ingredients, such as formaldehyde and PFAS. To develop the list, Walmart reviewed state and federal regulations, consulted suppliers and worked with the Environmental Defense Fund.
The clean beauty products are also “reimagining entire products,” Walmart said. This includes exploring sustainable packaging alternatives, evaluating carbon emissions associated with production and adopting cruelty-free and ethical standards.
Key quote from Walmart SVP of Sustainability Jane Ewing: “Our customers want to buy products that reflect their values, and for many customers, that means providing greater transparency into product formulations and products made without certain ingredients.”
Trending: Clean beauty doesn’t only align with values and sustainability; it is also popular. The #cleanbeauty category has over 5.8 million posts on Instagram and 1.3 billion views on TikTok, signaling popularity among Gen Z and millennials. Walmart cited data from Statista that indicated more than 70% of consumers want to buy products that align with their values.Putting the face on: With the clean beauty shop, Walmart is providing a home for the popular category so it is easy to find on the company’s growing marketplace. The destination could also help attract younger, internet-savvy consumers at a time when the retailer is seeing increased visits from people who are giving Walmart a closer look than usual as they seek to save money amid inflation.