Consumers are much more familiar with NFTs (non-fungible tokens) these days, which has spurred companies and brands to develop ways to increase business growth by utilizing them.
To date, NFTs have mostly been embraced by the highly valued young adult (ages 18-34) demographic, and businesses are becoming interested in or already tinkering with using NFTs in their marketing strategies to better reach their customers directly and offer a unique, digital experience.
With this consumer demographic familiar with the latest technologies, such as blockchain and cryptocurrencies, NFTs are quickly emerging as a valuable tool for standing out from the competition.
A digital token that is created and recorded on a decentralized blockchain network, NFTs can digitally represent brand assets and be used in a variety of ways by their issuers to provide a more efficient, and new personalized consumer experience.
In this blog, we’ll discuss 5 reasons why major global companies and brands have or are experimenting with NFTs and examples of their implementations.
Reason #1: Build brand awareness
Companies are always searching for ways to onboard more consumers, promote brand awareness, and ultimately drive business growth.
To do this, brands have engaged in traditional marketing campaigns ranging from celebrity endorsements to product placement advertisements in print and digital media and live events, among a host of other initiatives.
In today’s rapidly expanding digital landscape, NFTs now bring the potential to offer new and unique consumer experiences, including rewards such as exclusive access to events or limited edition goods for holders. The NFT holders could also choose to trade these tokens to others who may be interested. The NFTs also contain verifiable proof of ownership history and other relevant information in the token metadata to enhance transparency.
Since NFTs are digital assets that can be created and distributed instantaneously by companies for a fraction of the cost of traditional marketing campaigns, they hold immense potential to reach new and existing customers.
Payments for the NFTs could also be settled quickly through the usage of supported cryptocurrency wallets.
Brands could also work with savvy influencers to reach early adopter consumers who can create network effects for NFTs. Over the long run, this kind of NFT campaign could strengthen brand awareness, consumer loyalty, and engagement if done effectively.
For example, Yves Saint Laurent (YSL) Beauty launched its NFT debut with 10,000 exclusive YSL Beauty Golden Blocks. These were 3D blocks on a white background and quickly became a collectible with them all being claimed within 48 hours. Each one of these NFT collectibles opened the door for the brand to start building its own exclusive Web3 community.
The iconic company then launched a new NFT collection to honor its fragrance line Black Opium. These NFTs were gifted to those who purchased one of its limited physical Black Opium fragrances from the company’s website.
In total, the company has launched four NFT collections to date, with one selling nearly 1.3 million tokens in seven days to more than 24,000 people.
Related reading:
- Here are 5 practical NFT real-world use cases
- 5 common myths about NFTs
- Why Cardano is an ideal blockchain for real-world asset tokenization
Reason #2: Launch new customer programs
Companies also regularly develop and launch new services such as customer programs to target new areas for business growth, gain consumer insights, or reward loyalty.
NFTs can be used to experiment with these sorts of programs to resonate with younger entrepreneurs and consumers. For instance, loyal consumers with a transaction history could get first access to certain NFT collection launches or be rewarded with NFTs that can then be redeemed for exclusive physical items or in-person experiences.
As mentioned above, these NFTs could also be traded globally to other interested buyers.
In one example, Visa launched a one-year Visa NFT Creator Program for young digital creators in art, music, fashion, and film who want to accelerate their small businesses through NFTs. This initiative was planned to enable the company to “follow the future of commerce.”
The program helps these creators access new entrepreneurship strategies in distributing their content using NFTs and experiment with integrating the usage of various traditional and digital asset payment options while allowing Visa to forge connections with young up-and-coming digital entrepreneurs and gain NFT market insights.
Reason #3: Engage with an existing consumer base
NFTs can also be used to drum up further interest and excitement with their passionate consumers through an exclusive NFT drop.
For instance, Lamborghini, a luxury sports car manufacturer, has long been popular and well-known within the cryptocurrency community.
With this knowledge in hand, the brand launched an NFT sale that lasted for eight months in 2023. According to their site, the “NFTs will be released in a string of monthly collections of four pieces over four days. Each piece will only remain available to be purchased for 24 hours after the unveiling. Each month will feature three NFTs plus a unique limited-edition piece. A super-exclusive NFT will be waiting for those who collect all monthly releases.”
With many of their consumers and those interested in the brand familiar with cryptocurrencies and NFTs, Lamborghini was able to further connect and engage with a community to forge deeper connections and build more interest in their brand.
Read more: How NFTs can boost the sports and entertainment industries
Reason #4: Build and access a Web3 metaverse
The metaverse refers to a virtual world made up of 3D technology, blockchain-based products & services, and other emerging technologies, with users interacting with each other and known brands through avatars. It enables humans to enter into a digital playground to socialize, learn, and collaborate more easily than one might in the physical world.
NFTs can be used in a metaverse to digitally represent items that are limited or high in demand. Brands can use them to entice users to enter their metaverse, buy and collect them, or even make them redeemable for physical items. Curious users will be more likely to register for the metaverse and start experimenting or collecting these NFT collectibles to store or trade them. Metaverse participants can also be given exclusive access to other brand rewards or limited edition products to incentivize registration.
As the metaverse is completely digital, a company can try out new marketing ideas and campaigns they would normally try in a physical store for a much lesser cost. By being digital, creativity and innovation can be further unlocked. Incorporating 3D technology, NFTs, and other technologies also helps to make NFTs and the metaverse a unique and cool experience for a younger audience.
In one example, Adidas Originals, a lifestyle brand and subdivision of the popular athletic apparel and footwear company, launched an NFT collection entitled “Into the Metaverse,” a collection of 30,000 digital collectibles that grants holders access to exclusive physical merchandise along with other digital rewards.
Reason #5: Promote certain business values
Each company or brand has its own set of values it prioritizes and promotes to its consumers. For instance, a lifestyle brand might promote a certain set of values and the image they would like to evoke while an environmental-friendly brand might promote a different set of values.
NFTs can also play a role in supporting the promotion of a brand’s values by encouraging their consumers to align.
To demonstrate, Starbucks Korea launched an NFT campaign to reduce demand for single-use cups and promote its environmental initiative earlier this year. According to the company, it “saved around 600,000 single-use cups within two weeks since launching the service” with 260,000 customers participating. For the campaign, Starbucks Korea offered their special NFTs through three different “reward missions.” Each time a customer ordered and chose to use a personal tumbler was given an “eco-stamp” which could be exchanged for different NFT types depending on the number of stamps.
NMKR: Enabling anyone to create NFTs
NMKR is an NFT and Tokenization service leveraging the Cardano blockchain. It allows businesses and individuals to create NFTs by providing tools that do not require coding knowledge.
As an established platform, NMKR’s services have been used by businesses, gaming projects, creators, and more to successfully mint NFTs of various assets.
Its various products including NMKR Studio and NMKR Pay with multi-language support enable businesses and individuals to enter the Web3 space seamlessly and even provide traditional fiat payment options to mint NFTs.
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You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by EMURGO to invest.
