Blockchain meets luxury: The role of NFT authentication in luxury retail platforms

Abstract

With the growing popularity of online luxury retail platforms, authentication of luxury products and institutional trust in online retailers are becoming increasingly important. Due to the inability to physically inspect offerings in person, consumers may have heightened anxiety and reduced trust in luxury products and retailers. Therefore, this research explores how a novel retail technology––blockchain-enabled non-fungible token (NFT) authentication––can address this issue. Specifically, grounded on warranting theory and institution-based trust theory, this research explores how NFT authentication influences purchase intention through warranting value and structural assurance. Using a two-stage experimental approach with a sample of U.S. luxury consumers aged 18–58 years, who are known to represent the majority of consumers in the luxury market, the research initially focuses on new luxury consumption (Study 1) and extends the insights to pre-loved consumption (Study 2). The serial multiple mediation analyses show that NFT authentication significantly enhances purchase intention in both new and pre-loved luxury platforms, mediated by warranting value and structural assurance. Notably, NFT authentication directly increases purchase intention only for pre-loved luxury goods. This study contributes significantly to the body of knowledge on digital transformation in retailing and luxury consumer research. The implications suggest that luxury retailers can strategically leverage blockchain technology to differentiate themselves in a competitive market.