Demystifying NFTs: Brand Tactics

Published 05 May 2022

Author

Rebecca Hobbs

The use of non-fungible tokens (NFTs) skyrocketed 21,350% in 2021, with 11.6% of consumers globally now owning one (Statista, 2022). But crypto-collectible hype threatens to overshadow projects boasting enduring commercial utility. We unpack how to overcome barriers (portability, sustainability); locking in loyalty; afford access; reclaiming resales and sharing royalties, and dissect their mainstreaming, via social media and stores.

Currently, NFTs don’t allow digital objects to travel from one virtual world to another (they’re the deed to the asset, not the asset itself). However, pioneering players including The Dematerialised, Yahoo Ryot Lab, and FlickPlay are future-proofing their NFTs – meaning they’ll be able to function across multiple online worlds when interoperability arrives.
Selfridges and Harvey Nichols are both creating in-store spaces for selling NFTs via credit cards instead of cryptocurrency as well as reselling (and authenticating) NFTs to woo crypto virgins. Meanwhile, social media giants’ forays into NFTs offer gateways for fans to display digital wares outside crypto-native worlds.
The fully trackable nature of NFTs means they are ideal keys for experiences, as brands can easily add elements and unlock members’ access. Recent leading initiatives include British luxury shoe brand Nicholas Kirkwood’s one-on-one NFT-unlocked masterclass; luxury NFT marketplace Exclusible’s ‘prosumption’; and AnamXR’s tiered spaces for “music for the metaverse” collective Blocktones.
Tiered NFT-based membership schemes are acting as the ultimate customer relationship management system, allowing brands to identify and reward loyal fans while letting devotees show their allegiance via passport-stamp-style proof, among other initiatives. Straddling beauty, luxury fashion and hospitality, brands including Clinique, Gucci and Dutch hotel chain CitizenM are leading the way.
The terms of reselling NFTs can be encoded into blockchains, so that linking physical goods with NFTs will finally let brands recapture resales. Meanwhile, US streetwear brand The Hundreds shares royalties with co-creators, connecting with the growing numbers of young consumers who expect a greater level of participation, and keying into the rise of decentralised headless brands.
The excessive energy required to mint and trade NFTs on mainstream blockchain platforms, which use carbon intensive proof-of-work systems, has attracted backlash. But vastly more energy efficient proof-of-stake systems are answering these criticisms – meaning that brands will be able to mint NFTs while adhering to their sustainability goals and attendant eco engagement.

Demystifying NFTs: Brand Tactics

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Topics

Art & Design
Science & Technology
Ecommerce
Advertising & Branding
Retail
Gaming
Hospitality & Service
Social Media
Brand Experience
Media & Entertainment
Architecture & Spaces

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