In the brave new world of NFTs – non-fungible tokens – brands are having to rapidly create bleeding-edge strategies to take advantage of this new method of virtual trading.
In case you didn’t know, NFTs, broadly speaking, are a new way to invest via the blockchain. These ‘tokens’ often take the form of unique pieces of art, with undisputable ownership in the hands of the buyer. People are flocking to buy them and trade them as a way of generating short-term and long-term income.
In fact, in 2021, NFT trading hit $17.6 billion, with sellers making $5.4 billion in profits – an increase of 21000% from 2020, according to a report from Nonfungible.com.
But I’m seeing a trend where savvy brands are thinking outside the box and realising that NFTs can help create digital communities.
So, from a brand perspective, imagine creating a community of loyal fans eager to interact with your brand and buy limited edition items, such as a product image.
Internet entrepreneur Gary Vaynerchuck springs to mind. He’s ridden the wave of internet trends since the early 2000s, so it’s no surprise that when he discovered NFTs, he swiftly set up a community – VeeFriends – where people trade the tokens and earn the right to attend an annual community conference for the next three years.
As the pioneering website puts it, “Gary intends to actively be consulting, investing, advising and speaking about NFTs, and so he needed to have his own project to test, learn and understand everything about it.”
Today, I’m seeing innovative brands grab the chance to use NFTs to:
Establish new income streams
Nike, for example, launched a ‘cryptokick’ NFT, which links a digital shoe with its real-world counterpart, which means your metaverse avatar can sport the latest kicks. If you sell your Nike sneakers, you also sell their digital equivalent.
Nike’s NFT also provides owners with access to online sneaker forums.
Meanwhile, rival brand Adidas purchased an NFT, Bored Ape Yacht Club (BAYC) #8774, Indigo Herz, and branded it with the company’s logo. It has also bought a plot of (virtual) land in the Sandbox metaverse game. Partnering with BAYC, CryptoPunks comics, and influencer gmoney, it has released 30,000 NFTs.
Build brand loyalty and community
NFTs create investor excitement through rarity. Linking the physical and digital realms is still seen as a cutting-edge act for a brand; and those that have already embraced NFTs are certainly creating stronger brand loyalty among those engaging with the metaverse – potentially untapped markets.
But an NFT’s value isn’t just in the asset itself, it’s in what the buyer gets from the asset, such as exclusive access to a product, event, forum or exclusive service.
This is where you can start to build brand loyalty, through generating a sense of both community and exclusivity.
Bored Ape Yacht Club, for example, is a collection of 10,000 NFTs, which are viewed as both pieces of art and memberships to an exclusive online club – which has attracted celebrity investors such as Justin Bieber, Paris Hilton, Jimmy Fallon and Eminem. The inaugural annual 2021 Ape Fest in New York included parties, a limited merchandise pop-up, and a charity dinner.
Salah Zalatimo, CEO of NFT platform Voice, suggested to AdWeek that brands should: “craft [NFTs] in a manner that resonates with both your brand’s mission and your customers’ interests.”
Raise money for charity
Consumers have an expectation that brands will act with integrity, and ESG goals are certainly the buzzword for 2022. A brand’s work is not done when a consumer, fan or investor hits ‘buy’. To cultivate continuing consumer interest and loyalty, I’ve noticed brands ‘giving back.’
Coca-Cola springs to mind. Its first foray into NFTs was in 2021, when it launched biddable NFT ‘loot boxes’ full of digital brand merchandise. Proceeds from the event were donated to the Special Olympics.
Enhance brand culture
As Josh Schwarber, global digital design senior director for Coca-Cola, told The Drum: “The metaverse – which is borderless and ‘geo-less’ – creates opportunities to connect with others like never before.”
When globally significant brands such as Coca-Cola, Adidas and Nike are taking to the world of NFTs, you know it’s time to sit up and listen.
Today, it’s vital for a brand to inculcate a presence on line beyond a static website. We’ve seen savvy brands do some amazing things via social media, but now it’s time to step into the metaverse, and interact with a new breed of consumer.
NFTs, in my opinion, represent a bold new avenue for brands to develop loyalty, community and exclusivity. And brand culture – certainly if brands are to remain relevant – is now intrinsically linked with life online.
What’s abundantly clear is that the metaverse, NFTs and the digital realm are evolving at breakneck speed. It’s a revolution, and if you’re not strategising now, you’ll simply lose out.