Despite the volatility in the crypto markets, consumer brands and e-commerce platforms are trying new ways to transform NFTs from novelty collectibles to something more useful for consumers and businesses.
Rather than deploying branded NFT collections that are simply sold or given away, e-commerce platforms and consumer brands have experimented with “token-gating” to give NFT owners exclusive or early access to products, services or experiences. This helps brands and e-commerce platforms continue to penetrate the Web3 through NFTs and build communities there despite the slowdown.
“The NFT audience is more than an audience,” Balmain marketing director Txampi Diz told NFT.NYC about the French luxury brand’s NFT effort last week. “It’s a community and it’s very powerful for a brand to reach a community.”
After launching an NFT collection co-branded with Barbie earlier this year through a collaboration with Mattel, Balmain auctioned off three NFTs in collaboration with artist Jeff Cole to promote the launch of its new Unicorn sneaker silhouette. Along with the NFT itself, owners also received a pair of physical shows, an original sketch, and VIP passes to Balmain’s events during Paris Fashion Week 2022.
Balmain is one of many brands refining their approach to NFTs to go beyond simply offering consumers a collectible token. Other big marketers like Macy’s, Bentley, Starbucks and the National Hockey League are among the brands looking for ways to deliver exclusive experiences through NFTs and integrate them into more parts of their business.
One approach brands are now using to make NFTs useful is to build a community. For example, ahead of the July 4 holiday, Macy’s is giving away fireworks-themed augmented reality NFTs to the first 10,000 people who sign up for the retailer’s new server on Discord. Last month, Brady Brewer, CMO of Starbucks, said the coffee giant was looking to create a series of branded NFTs that would give owners access to “community membership” as well as “experiences.” and exclusive benefits”.
“We believe NFTs have broad potential to create an expanded shared ownership model for loyalty, delivering unique experiences, building communities, storytelling and customer engagement,” Brewer wrote in a blog post in May.
It’s not just big brands considering ways to make NFTs useful rather than just a collectible token for consumers now. Last week, three Colorado breweries – Denver Beer Company, Great Divide Brewing and Resolute Brewing – released a collaborative collection of 18 NFTs. Beer lovers who pay $200 for one of the tokens get exclusive access to an event next month featuring a tour of three breweries.
Clifton Oertli, founding partner of Resolute Brewing, said the breweries decided to experiment with NFTs after hearing that their payment processor was looking at ways to add blockchain capabilities. He added that he was excited about the possibility of breweries integrating NFTs into loyalty programs one day. Ideas also include giving NFT owners early access to exclusive beer releases or giving NFTs to beer fans as proof of purchase of limited editions.
“Now that we’re seeing a downturn in crypto and NFT prices have fallen, it’s a very natural evolution to really think about NFT utility versus speculation,” said James Sun, co-founder of MINT NFT, which built NFT projects for Balmain. and other brands.
Brand marketers aren’t the only ones tweaking their approach to NFTS. Last week, Shopify announced a number of new features for merchants, including ways to give NFT holders exclusive access to their online store to purchase products and collections. (On the same day, eBay announced it had acquired NFT Marketplace KnownOrigin, which comes a year after eBay began allowing NFT sales.)
With the hype around the price of NFTs dwindling, some say brands and tech companies are focused on finding new ways to use them. Extending blockchain capabilities to online storefronts is a “much more serious” way to incorporate NFTs into e-commerce strategies, said Alex Danco, chief blockchain officer at Shopify. By giving people ways to engage with brands and not play favorites with various blockchains, he said Shopify wants to be “wallet aware”.
“Price is the biggest distraction, price is a distortion,” Danco said. “When you’re a builder, those things get in the way of you finding what people actually want.”
While some brands and e-commerce platforms are looking to deliver something people would want via NFTs now despite the downturn, not all brands are full steam ahead.
While some brands are spending at least $50,000 on NFT launches, others are delaying others that were slated for this summer. Sasha Wallinger, head of web3 metaverse and strategy for design consultancy Journey, said some companies are waiting to see how the market reacts to the volatile NFT market while others are cutting back to reduce the numbers. and to make NFTs in a collection rarer. . However, those who go ahead do so if a project is tied to a certain event, date, or other brand announcements.
Total NFT sales are also down. According to data firm NFT NonFungible, total sales between Q4 2021 and Q1 2022 fell 47% to 7.4 million, while total dollar transaction volume increased 13.3% to reach $16.5 million. During the same period, the number of NFT buyers also fell by 31% to 1.2 million, while the number of NFT sellers fell by 15.6% to 816,000.
In some ways, the evolution of NFTs is reminiscent of how marketers used Web2 social media nearly a decade ago. But what started as organic posts on platforms like Twitter, Facebook, and Instagram quickly evolved into complex strategies and a whole new ecosystem for digital advertising.
Matt Wurst, CMO and co-founder of Mint, a white label platform that helps brands market and monetize digital assets, said brands that invested early in content, community building and social media in the age of Web2 recovered faster from the economic downturn of 2008. and emerged stronger. He said starting a new community with NFTs can start with short-term campaigns before evolving into token-based experiences.
Wurst, who spent nearly a decade at marketing agency 360i, recalled featuring big brands on social media in 2009 and being asked why they needed a Facebook page when they already had a website.
“Now brands are seeing the writing on the wall that they’ve given up too much control over their relationship with consumers,” Wurst said. “[Now they are] be more mindful of how they recoup some of that return from the platforms.
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