Being NFT & Metaverse Ready, What Does That Mean For Brands?

Defining the NFT hype is translating how the internet impacted our lives in 1998, according to the experts in that field. As an [un]-initiated NFT enthusiast, I am riding onto this journey to learn and be part of an early movement, which is redefining how we, as consumers, will engage with brands in the future.

NFT is an invitation for brands to bring consumers into a differentiated experience, showcase their values but also create a new community. It enables them to offer a broader access to their products and services but it also extends the opportunity to cross branding collaboration. And in that space, the potential can be quite significant.

A recent poll I held on Linkedin last week, gauging from my network which of two proposed channels may be accelerating the crypto adoption, got me to draw the parallel with the NFT adoption. Why is that you may ask? At the inception, the purchase of NFT was tied in to a crypto transaction, hence limiting the broader traction. However, recent developments in that space have now opened up the ability for users to purchase NFTs via a direct card transaction through certain platforms.

Therefore, if the purchase of NFT is simplified and widely promoted through trusted media and established payments players, what could be holding some brands back to start their crypto/NFT exploration?

My personal immediate take away from my small poll is that:

1. The ‘commoditised’ approach with crypto/NFT transaction will most likely drive a surge in mainstream adoption.
2. One channel on its own will not pull this off. The metrics behind consumers behaviours and conversions are complex.
3. A greater diversity of brands and use cases will appeal to a wider audience. This being with more brands either offering crypto on their checkout page or brands building different NFT use cases.

Some high end brands have already made good headway into that space (e.g. Gucci, Louis Vuitton, Stella Artois, The Economist, etc ) but of course this is not meant to work or suit every brands in its current stage.

The more prominent retail use cases revolve around the launch of physical products with crypto/NFT as a storefront or the development of video gaming with collectibles in the metaverse. The focus seems largely to be on creating, selling or giving away [digital artworks]. Early adopters to NFT were driven by the emotional, uniqueness value the digital asset represented, whilst retailers in return enjoyed a spike in related physical sales. These cases have however not necessarily done much to promote continued crypto/NFT tractions beyond the PR focus once the momentum subsided.

Recently, the industry has seen a new phase of ‘brand-created’ NFTs, with the use cases evolving to include

1. Building community
2. Rewarding loyalty
3. Granting special access to brands across physical and digital environments??

Forming a community on the back of the payment’s evolution is what I resonate the most with. This presents an opportunity for brands to learn, grow and define more purposeful models, which can be led by users, albeit the consumers' voices. A community naturally implies focusing on the loyalty opportunity and expanding their network beyond just the purchasing gains, which is often driven by discounting products or services. The deeper connections and shift in the consumer demographics interacting with the brands are priceless gains. Consumers follow their interests, therefore where brands can follow these through, they will be able to create new engagement models that will appeal to a new and diverse demographics. ?

Here are a couple of new use cases built with the above-mentioned principles in mind:

CLINIQUE

Their NFT efforts focus on community and utility. They started a traditional contest inviting users to share their “stories of optimism” on Instagram, Tiktok and Twitter, in exchange for free supply of beauty products for 10 years. Yes that is not a typo, 10 years worth of products supply. Instead of selling NFTs, the beauty brand opted for giving shoppers on their rewards scheme the chance to receive products along with one of three editions of an NFT artwork called “Meta Optimist” synching in with their “stories of optimism” contest. By opening up the NFT access only to its loyalty programme members, Clinique is both rewarding membership and incentivising new shoppers to join their club. In their own words, they saw this project as an effort to “modernise loyalty”. Using loyalty as a simple step up into the NFT game is a good move, considering the importance of data to brands and the direct connections with consumers.

ADIDAS MEET PRADA

Adidas and Prada introduced a global community NFT art project, whereby participants submit an anonymous photograph, of which 3000 will be randomly selected to be compiled into a single NFT tile designed by the digital artist Zach Lieberman. The artwork will be sketched as a nod to the brands recycled nylon collection. The project brings together a new community of art, sports, tech and high end fashion lovers on an NFT educational journey, whilst collectively building one together. The final piece is to be auctioned off with the proceeds going to a non profit organisation supporting climate justice and marginalised communities. The selected participants are rewarded for their creation with a share of the final artwork auction sale. Pretty cool!?

What makes this different is the educational approach Adidas took on their own NFT journey by bringing in a community of enthusiast to ultimately contribute in the creation process of such a complex digital asset, free of charge to the participants. The exercise of creating an NFT is referred to as “minting”. Possibly an area of exploration for another article;- Adidas also associated themselves with a brand that shared similar ethos in their approach to the metaverse opportunity.

And lastly, they put the spotlight on the community by essentially inviting cross segments of enthusiasts to chip in on their NFT journey. They are promoting sustainable concepts and are supporting greater community causes with the proceeds. An exchange of co-education, co-creation and co-ownership first in its kind.

While the NFT ecosystem is still young, these are just great examples of projects exploring free distribution and community building in a way that is already generating great value for creators and consumers.

In a nutshell, what brands may take away from this, can be summarised as:

1. Looking at the opportunity to become a student themselves in that universe. To observe, experiment and learn organically.
2. Thinking Community and Loyalty whilst considering how to raise their brands reach with special experiments, free distributions etc...
3. Being involved, follow the movement. One cannot learn from the sidelines alone.
4. Exploring brands collaboration, where a synergy exists
5. ?Having fun first and foremost whist figuring it out!

SOURCES

5 Ways Brands Can Level Up Their NFT Knowledge (forbes.com)

Clinique’s first NFT ties to loyalty and products as uses expand | Vogue Business

https://www.adidas.co.uk/metaverse

https://www.voguebusiness.com/technology/prada-teams-up-with-adidas-to-launch-first-re-source-nft

https://www.clinique.com/nft

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