NFTs and Opportunities for Brands
2021 was the year of NFTs (Non-Fungible Tokens), with the English dictionary Collins naming them as the word of the year and record numbers in terms of transactions.
Despite the bear market, more and more brands are launching NFT projects for various purposes, and as the market is in its early stages, there is plenty of room for creativity and using NFTs in increasingly original ways.
Generally, however, brands launch NFT projects for one or more of the following reasons:
- Branding / Awareness: launching an NFT collection today is a way for a brand to position itself as innovative. In fact, it is a clear signal from the brand to all stakeholders that it is paying attention to the latest technological trends, exploring new frontiers, and new potential use cases. Furthermore, NFTs introduce the concept of digital asset ownership, which is the true innovation introduced by Web3 and will be increasingly fundamental for the development of initiatives in the Metaverse.
Metaverse is not meant as a virtual place where avatars move to experience digital experiences, but rather as the evolution of the internet that was born to satisfy the need to unite real life with digital life, having the latter increasingly weighing in terms of energy, time, and money spent that disappear as soon as we turn off the device or simply leave a social platform.
- Marketing and PR: a brand that launches an NFT collection has the opportunity to gain strong media coverage, generate advertising, and help educate its customers about new technologies. Obviously, launching an NFT collection makes it possible to reach new customer targets that may have extremely interesting characteristics, either for their demographic profile (certainly younger generations have a greater interest in this type of asset, having already experienced its effects in the gaming world) or for their attention to the concept of digital identity and digital status. Finally, NFTs can be used as a loyalty tool to reward the existing customer base by updating the concept of traditional loyalty programs.
- Extension of Products and Services: last but certainly not least, NFTs allow for the monetization of digital assets by creating a new offer or an extension of products and/or services offered. Particularly interesting is the possibility for brands to create additional revenue streams through royalties generated by sales on the secondary market: NFTs, in fact, allow a percentage to be applied to every exchange that takes place between users, a percentage that returns to the brand’s coffers. For example, it is as if for every sale on the secondary market of a luxury brand’s bag or car, a percentage returned to the manufacturer itself, in an entirely passive way. But the change that NFTs are bringing and will increasingly bring is much deeper and more complex and concerns the relationship between brands and consumers.
Thanks to NFTs, in fact, the role of a brand’s “fans” or rather a community of brand enthusiasts will become increasingly relevant and will include not only those emotionally involved in the brand who purchase its products and services but also those who want to invest in the brand and have economic return objectives.
Here, NFTs exactly combine these two apparently distant worlds and give consumers and fans the opportunity to feel part of the company’s economic success, opening up new models of co-creation of products and services and sharing the value created by the company.
In other words, brands can use NFTs as a lever to bring consumers closer to feeling part of the brand, and on the other hand, consumers can be advocates of the company’s values and mission, sharing its economic results through the growth of the value of their NFTs.