So what exactly are NFTs?
An NFT, or non-fungible token, is a digital asset that lives on a blockchain and can come in the form of art, music, in-game items, videos, collectibles, and more. They are bought and sold online, frequently with cryptocurrency. As opposed to “fungible” assets like Bitcoin and dollar bills, which are all worth the same amount, each token is unique. They hold speculative value – determined by the community – and can be exchanged or traded without the risk of duplication.
NFTs are popular because they put the power back in the hands of the community by letting them decide what’s popular and incentivizing them to support what they like. This is particularly valuable for creators who have historically relied on third-party platforms like Spotify, YouTube, and Instagram to share their content and gain from it.
As part of decentralizing power from the few to the many, NFTs are disrupting the current marketing landscape by allowing brands to find innovative ways to incentivize their audiences to engage. Tactics include creating exclusive content and shifting the focus to community building – on and offline.
NFTs are the basis for a multifaceted digital consumer connection.
While NFT’s are simply a fraction of the Metaverse Marketecture, the NFT ecosystem is significant (and influential when leveraged correctly).
|How Pilot44 broadly views the NFT Ecosystem for brands|
While crypto-millions and Discord-obsessed Gen-Z users might be fueling the current hype of NFTs, NFTs could be Web3’s gateway into traditional commerce. In other words, NFTs could empower brands to take back ownership of their digital consumer relationships by bypassing platform-centric marketing that has taken over Web2.
There are challenges to entering this new space, however there are also risks in not engaging. At Pilot44, we’ve analyzed case studies across dozens of consumer brands to spot the emerging use cases for NFTs. This post aims to inspire your brand’s strategic roadmap with a roundup of top use cases and notable startups helping to power solutions for brands.
Let’s dive into some use cases…..
#1 Leverage NFTs for rewards and community building.
Starbucks was one of the first companies to integrate NFTs with a loyalty program at scale. The multinational coffee shop created a new experience that combines the company’s successful Starbucks Rewards loyalty program with an NFT platform, allowing its customers to both earn and purchase digital assets that unlock exclusive experiences and rewards. Dubbed ‘Starbucks Odyssey’, the activation gives the brand new and memorable ways to engage with (customers) and partners (employees).
Starting on September 12, 2022, customers and partners were able to join the waitlist for a chance to be among the first to receive access to the Starbucks Odyssey experience, set to launch later this year. Starbucks Odyssey is meant to be an extension of Starbucks’ renowned rewards program where members can access it using their Starbucks Rewards login credentials. Once logged in, members can participate in Starbucks Odyssey ‘journeys,’ including playing interactive games or taking on fun challenges to deepen their knowledge of coffee and Starbucks. Members will be rewarded for completing journeys with a digital collectible ‘journey stamp’ (NFT).
|New Starbucks Odyssey experience will offer members the ability to earn and buy digital collectible stamps (NFTs) that will unlock access to new, immersive coffee experiences|
➜ Starbucks brings its brand values to life by creating connections over coffee, community, and belonging.
➜ This activation allows the brand to build on and strengthen its Starbucks Rewards ecosystem and engagement model (its powerful spend-to-earn stars approach) while also introducing new methods that emotionally engage customers.
➜ Starbucks is expanding its digital third-place community (“a place between home and work where you feel the warmth of connection over coffee, community, and belonging”) by offering a broader set of rewards that connect consumers to the brand and to each other.
#2 Invert the idea of an NFT as a digital token of physical product ownership by giving away a physical product tied to a digital NFT collectible.
Skincare and makeup brand, Clinique introduced its first NFT in 2021. The NFT set out to capture the spirit of their most iconic products in a campaign dubbed ‘Meta Optimist’. Instead of selling the NFTs, Clinique gave Smart Rewards members the chance to win an NFT of their limited-edition iconic hero products and a variety of other products once a year for ten years, by asking them to share their stories of optimism and hopes for the future. Meta Optimist was a unique digital embodiment of Clinique’s brand, representing the promise of great skin for the future.
|Instead of selling the NFTs, Clinique gave Smart Rewards members the chance to win its first NFT plus an assortment of products once a year for the next decade|
➜ The project helped to “modernize loyalty,” noting that rather than aiming for secondary market sales, it was better to give away an NFT for being loyal and give back something that transcends just a digital opportunity.
➜ The program enabled entrants to promote Clinique’s brand by sharing the campaign on social media, resulting in increased social currency for Clinique.
➜ Naturally, Clinique acquired several new Smart Rewards members, enhancing its existing loyalty program and creating greater stickiness for the brand.
#3 Connect NFT issuance to participation in brand-associated experiences (e.g., sponsored events) and mint NFTs that document attendance of exclusive branded experiences.
The Paris Fashion Week 2021 event organized by the Fédération de la Haute Couture et de la Mode made an NFT QR code available to accredited journalists, influencers, and buyers who attended the event. The code unlocked many assets including a signed, unique digital artwork by a well-known artist and several social and AR features.
➜ The guests viewed the bonuses as VIP treatment which positively impacted their view of the brand.
➜ The brand secured extra media coverage, extending brand visibility and share of voice in a crowded market landscape.
#4 Engage consumers in new spaces while ensuring brand authenticity in any environment.
The beer brand, Stella Artois galloped into the metaverse using NFTs to auction virtual racing horses in an authentic branded experience. Partnering with Zed Run, the digital horse racing platform, the brand offered a 3D racetrack with limited edition collectible horses as NFTs for users to enjoy at the height of the pandemic when virtual horse racing went mainstream.
➜ This initiative demonstrated how a brand can authentically engage in a digital environment with digital assets that are on brand but not necessarily a core product.
➜ Stella leveraged its brand’s history connecting to horse racing and integrated it into why the user was there in the first place.
The above use cases represent a small sampling of the many cool examples we’ve seen or supported. Coming up with a unique way to wade into the murky waters of Web3 may seem daunting, but for almost every brand concept, there’s at least one, if not several, technology partners helping to power it.
Here are a few notable startups doing the heavy lifting…..
➜ The intersection of wallets, NFTs, community & music: Arianee is on a mission to empower brands and owners by giving digital life to valuable assets, experiences and communities through NFTs. They use blockchain technology to provide greater transparency, data privacy, circularity, and brand-consumer engagement. With no password required, owners experience exclusive features such as attending any event or logging directly into a brand’s website, a passport being the only proof of ownership needed. Brands can also have their own white-label app or integrate Arianee’s features into their apps to control the experience.
|Moonpay’s NFT Checkout Solution|
|NFT.Kred is helps brands and enterprises leverage NFT technology to create integrated and simple NFT experiences for customers and employees|
➜ NFT and collectibles from leading artists, teams, and brands: Sweet.io is an experience-driven NFT platform that connects the world’s biggest brands with the world’s most enthusiastic fans. Partnering with Sweet gives brands the flexibility to bring digital merchandise to market in many ways, including for-purchase on existing e-commerce stores, bundled with physical products via QR codes, as social giveaways via web-based reservations, and rewards for completing specific actions. Sweet also enables the distribution of one-of-a-kind, digital, tradable coins and cards custom-designed around a brand and then published on the blockchain for transparent ownership and authenticity. More than 600 artists and brands live on the platform.
|Burger King worked with Sweet.io to drive real guest engagement with a gamified NFT campaign delivered on the side of 6 million meal boxes|
While the future of NFTs is unclear and it’s still a bit too early to judge their impact at scale, results for marketers to date are quite compelling. According to HubSpot Blog research, 39% of brands who use NFTs say they have the best ROI of any channel in their media mix.
The true impact of NFTs will continue to unfold gradually over the next few years. For now, many brands are simply experimenting by extending product lines into digital worlds and creating collectibles and digital assets for avatars. But just like successful brands didn’t call it a day after buying a domain name and posting a website in the dotcom era, similarly, brand marketers today should be asking themselves what comes next in the NFT space, and who can I partner with to get involved now so that I’m ready to maximize future ROI at scale.
As Pilot44 Co-founder and Chief Solution Strategist noted in CPG Meets the Metaverse, “The initial NFT hype has started to die down, and we will continue to see the next wave of experiments that are truly tapping into the unique value that NFTs create: community. The future of successful NFTs projects will be measured based on the communities they create, not on the price they sell for. Brands that are capitalizing on this are creating early advantage for the next generation of consumer engagement and loyalty. ”
How will your brand explore this next frontier?
Get in touch to learn more.