How your brand should use NFTs
While the present hype around Web3 might be fueled by crypto-millionaires and discord-obsessed Gen-Zers, non-fungible tokens (NFTs) are proving to be the gateway into traditional commerce. For brands, entering a new revenue stream can be daunting— the real question is how can brands enter the Web3 space in a way that makes sense for them?
Much of the buzz around NFTs relates to digital art but as this space grows we are seeing the model applied beyond digital artworks to different use applications that better suit a businesses needs.
For example, companies in the media industry utilize NFTs to create a new class of assets. NBA’s TopShot is currently the most compelling legacy example in their product line expansion. The site has racked up to $200 million in sales, with one Lebron James dunk shot selling for over 200k. Jack Dorsey, former CEO of Twitter auctioned off his first tweet, which had a bid of $2.5 million.
Companies in the fashion industry have begun to digitize versions of their physical clothing and accessories. Just this week Scandinavian fashion brands Rotate and Remain released an exclusive collaboration with metaverse platform Ifland, South Korea’s largest mobile provider which boasts 12.8 million users. Ralph Lauren has already sold branded digital apparel in virtual worlds like Zepeto. Dolce & Gabbana auctioned millions of dollars worth of NFT-based digital couture on their online platforms.
Each of these projects ports a current product line into the metaverse, expanding how consumers engage with and experience the brands. Apparel brands have recognized that releasing collectibles was a good starting point but was only the beginning of their Web3 endeavors. The next step is for brands to look for ways to tie in NFT projects with their core product. The transitions have been especially seamless for well-known sneaker companies with unlimited capital. Nike has gone as far as acquiring RTFKT, a startup specializing in NFT-based digital sneakers, while Adidas has created a line of virtual gear for the characters of NFT leader Bored Ape Yacht Club.
Web3 presents brands with unique ways to engage directly with their fans and customers in a way that big social platforms do not. Brands are beginning to think outside the box and come to realize that NFTs can facilitate the creation of digital communities.
NFTs have allowed brands to establish new income streams, build brand loyalty, enhance culture, build community among new user groups, and even raise money for charity. In March 2021 Taco Bell auctioned off 25 NFTs on a well known NFT marketplace called Rarible to support the Live Mas Scholarship and raise brand awareness. Coca Cola quickly followed with the announcement of their own animated NFTs for The Special Olympics.
Consumers, now more than ever, are aware and concerned with how their favorite brands are getting involved, the world’s most popular brands acknowledge this and have focused their marketing efforts on the rise of Web3.
Brands need to be looking to the future of Web3 for their next metaverse moves. NFT authentication technology is going to be the next step for traditional commerce. While NFTs are mostly being used for unique digital assets (a specific Bored Ape image or NBA video clip), the technology could just as well identify a unique experience or a unique physical object. It’s a question of how companies use the digital identifier that forms the basis for each NFT’s assertion of uniqueness and authenticity.
Today, emerging technologies facilitate the creation of digital identifiers encodable into an NFT derived from the actual material or structural properties of the physical items in question. With the Authentique app from The Ordre Group, companies can virtually verify luxury items and place a digital twin on the blockchain during the point of sale of the physical product. The digital twin or NFT lives in the Authentique app and can be transferred upon the resale of the item.
While the concept of minting, buying, and selling digital art in the form of NFTs may still strike some as unconventional, it’s a trend that is definitely here to stay. As Web3 continues to evolve and cryptocurrency becomes more integrated into our daily world, brands will further step into the business of creating, sponsoring, and being a part of the NFT trading world.
