September 21, 2023

More than just a jpeg

Did you think it was over? With the NFT art craze running out of steam, we can finally focus on what those unique digital tokens are really good for.

In a space as over-hyped as crypto, it’s easy to forget that the boom and bust cycles have nothing to do with what blockchain technology can actually do. That’s particularly true for NFTs. Behind all the headlines about jaw-dropping prices for digital art – and then all the mockery – is the fact that non-fungible tokens aren’t actually monkey business. They’re just a deceptively simple tool that can be put to use in so many powerful ways.

As US regulators take aim yet again at “unregistered securities” in the crypto sphere, and NFT floor prices wallow in their prolonged slump, it’s a good time to look at shining examples of companies using this innovative technology to deliver real value – just as it was always meant to do. These smart contract-bound digital tokens have a unique capacity to record and leverage user activities, making them ideal tools for brand building in any industry. If you’ve been looking for the best way to get a foothold in Web3, you might find some inspiration in these examples.

1. Events

One of the clearest practical use cases for NFTs is in ticketing, where there is a pressing need for counterfeit-proof and scalper-resistant tickets, and an obvious route to adding value through extended functionality.

Think of music concerts, where many attendees are likely to be core fans who are the best prospects for future sales. With the NFT serving as durable proof of participation, after the event, NFT ticket holders could claim benefits such as special pricing or early access to tickets for future concerts, backstage experiences, exclusive video footage or merchandise, and more.

Ticketing giant Ticketmaster has leapt on the opportunity. While its first NFT initiatives were designed as digital collectibles to go with ticket purchases, soon it allowed event organizers to add special perks and began offering tools such as face value restrictions on resale and other strategies to weed out scalpers. Most recently, in response to a request from band Avenged Sevenfold, it has introduced token-gated ticket sales.

Lesson learned: Build from the ground up. Ticketmaster uses NFTs as a natural extension of its core business, and launched each feature in steady progression as it could assess the response from clients. Even if you can see huge potential for a suite of benefits, you don’t need to dive in all at once. Give your company time to learn and refine your NFT offering.

2. Loyalty  

Lufthansa and Starbucks have both launched NFT-based reward programs. Lufthansa’s Uptrip  is built around collectible digital cards related to the destination, airplane model and more. The cards are tradable, helping members to work towards completing themed collections that can unlock access to perks (and air miles). Starbucks Odyssey also has a trading feature – but the tokens are issued based on online activities as well as purchases.

Stretching the possibilities even further, Amsterdam fashion brand Scotch & Soda has expanded its existing Club Soda loyalty program with Club Soda 3.0, adding co-creation to traditional rewards such as discounts and early access. The move is intended to appeal to new audiences, build on brand values of community and “give everyone a sense of ownership”.

Lesson learned: Go the extra mile. Conventional loyalty programs already work well, and you shouldn’t neglect that aspect, but in Web3 you have a chance to think more creatively. See what you can do to give your customers even more value, and even more ways to engage.

3. Into the metaverse…

Gaming is a natural home for NFTs, which can provide a way to trade and display coveted in-game items. But broader metaverse experiences may hold even more potential. Digital fashion has already proved very popular, with some virtual luxury items selling for even more than their physical counterparts. And here again there is an opportunity to go beyond the obvious. Brands that don’t just sell NFT fashion but involve their customers in its creation reap rewards that go far beyond the sales price.

Nike has firmly established itself as a leader in this field, embracing NFTs’ many possibilities with a range of initiatives. While its CryptoKicks offering last year was a major phygital fashion event, with NFT sneakers launched as real-world sneakers (available at first exclusively to token holders), the .SWOOSH platform allows Nike fans to design – and sell – their own virtual creations. And now, as the company had teased at launch, those NFTs will be usable in EA games.  

Lesson learned: Just do it. Don’t be shy to give your customers skin in the game – having a tangible sense of ownership, and multiple ways to use their NFT assets, is a powerful draw.

4. …and beyond

Lacoste dived into Web3 with an adventurous initiative called UNDW3. We may not be sold on the brand name, which forces every single article we’ve read to explain the pronunciation (it’s “underwater”), but we do like the scope: the UNDW3 initiative is designed to encourage engagement, with games to deliver fun and prizes, and unlocking more benefits the more users interact. Community feedback is also prioritized. And recently, UNDW3 token holders were invited to an immersive virtual retail space where they were able to buy exclusive, community-designed physical goods, each tied to a digital wearable.

Lesson learned: Layering is always in style. You can use NFTs to provide special access and phygital goods and creative opportunities and AR experiences and just about anything you can imagine – and you can choose whether all that gets unlocked simply by buying the NFT, or through interaction.

5. Exclusivity

Finally, NFTs are ideally suited to meet a need for verification of scarcity or provenance. Dior’s B33 sneakers, for instance, are real-world shoes that each come with an NFT “digital twin” – but in contrast with Nike and others, the NFT is oriented to real-world use, not metaverse fashion. It functions primarily as a certificate of authenticity, as well as granting holders special access to future collections; it’s not meant to provide customers with cred in Web3. This works for any luxury industry, even something as fundamentally tangible and experiential as fine wine.

Lesson learned: Even the most tangible of luxuries can benefit from a virtual label. Maybe your product doesn’t need to be digitalized; if your customers are more comfortable in the real world, you can still use NFTs to offer them real-world benefits – and provide a stepping stone to Web3 down the road.

With all these possibilities, the only limits on what NFTs can do for your brand are your imagination. Still need more support? With THE RELEVANCE HOUSE by your side, you’ll have the A team equipped to help you strategize on the best way to conceptualize, design, and communicate your NFT initiative. Get in touch to find out more.

Photo credits

Image 1 by vecstock on Freepik
Image 2 by Freepik

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