The Morning Consult survey found that one in three Americans collect physical items. Whereas, one in ten gather NFT collections. Millennials (23%) are the most interested in virtual shopping, followed by Generation X (8%), Z (4%), and baby boomers (2%). The number of NFT collectors continues to grow as the virtual world actively develops. Thus, increasing its influence on various areas of human activity.
With the popularization of NFT and blockchain technologies, businesses get new opportunities for advancement. Successful retailers understand that they need to be in the trend to increase profits. That is why this article discusses what NFT is, its role in the retail business, and how it is already in the influence marketing area.
NFT is a non-fungible token that exists in a single instance. It is a type of cryptocurrency representing virtual collectibles: GIFs, tweets, images, skins from video games, etc. NFT is based on blockchain technology – a chain of continuous blocks that contains all the information about the transactions of the system participants. It resembles a typical database but differs in that all users can access it, and it is impossible to change or delete information.
Thus, NFT is a kind of digital certificate assigned to a unique object. We can compare it to a deed to a house, confirming your ownership, only in the virtual world. But what benefit can NFT bring to the retail industry?
The evolution of digital technology is causing it to permeate every area of human life, and marketing is no exception. In 2022, the Influencer Marketing industry was valued at $16.4 billion, making it one of the most common channels for increasing consumer loyalty and brand awareness. With the support of stars, bloggers, and other media personalities, retailers promote their products by displaying them in a virtual format to a broader audience.
By creating their own NFT collections, brands are opening up new opportunities to make money and promote themselves. For example, in 2021, Nike bought RTFKT, a studio specializing in augmented reality, NFT, and game engines. In collaboration with artist FEWOCiOUS, they developed a series of NFT sneakers. The first batch of 600 copies was sold out in 6 minutes, bringing the company over $3.1 million.
Next, let’s look at the benefits of using tokens in retail.
Creating exclusive NFT items provides retailers with new ways to engage audiences. Virtual collections allow you to:
World-renowned companies such as Adidas, Warner Music, Gucci, Nike, and others are developing new revenue-generating ways. By creating NFTs and attracting influencers to advertising, they are founding their communities of loyal customers.
By developing digital twins for physical goods, retailers can track interest in products after the initial sale. However, since blockchain is an open system, it will provide all the information about what transactions are made with the product after purchase. Thus, brands can:
NFT can serve retail as
To determine how to use tokens in business, you should focus on the brand image, tone of voice, industry, target audience, etc. It’s important to remember the same when choosing influencers who will promote your NFTs. This will allow you to get the most out of your innovative technology.
Statistics show that in the first ten months of 2021, most NFT purchases were less than $10,000, making them retail. Influenced by trends, giants such as Adidas and boohooMAN launched their token collections that year. Following them, the haute couture brand Dolce & Gabbana also took to the virtual world.
In 2023, the number of retailers using tokens in influencer marketing campaigns is increasing significantly. Let’s take a look at the most popular and successful cases.
In collaboration with Pakistani artist Sara Shakeel, the French mineral water brand Evian launched its first NFT project in April 2022. The collection consisted of 20 virtual paintings depicting sparkling landscapes of the Alps. It then sold for about $620 apiece. The project was timed to coincide with the launch of a new line of sparkling water. It became a shining example for small retailers to strengthen their brand identity with art.
The fashion house has partnered with NFT artist Beeple to launch NFT’s own video game. The player can find 30 built-in tokens during a playthrough. The development is filled with the brand logos and prints of the fashion house. This approach drew attention to the brand among the younger generation, the zoomers.
The automobile manufacturer struck a deal with five representatives from fashion, architecture, music, graphic design, and real estate. The result was a collection of tokens inspired by a series of G-Class cars. The NFT sale kicked off on Jan. 23 on the Digital Art Nifty Gateway online auction site, at prices from $222 to $1,554.
The pop singer has released a token collection with digital artist Beeple. These are three videos that have been put up for sale on the online platform SuperRare. The profits were donated to three nonprofit organizations. Also, in March 2022, Madonna purchased an NFT tattooed monkey from the Bored Ape Yacht Club collection for 180 ether (at the exchange rate at the time, it amounted to $560,000). Needless to say, how many fans of the star became interested in cryptocurrencies and non-fungible tokens?
There are failures among such projects, so retailers should be careful when creating tokens. For example, film director and producer Quentin Tarantino also decided to join the NFT movement. He released tokens dedicated to the cult film Pulp Fiction – NFT of the original handwritten script and seven deleted scenes. They were put up on the online marketplace OpenSea, but Miramax, which owns the rights to the picture, later sued for copyright infringement.
Retailers just entering the token sphere need to understand that releasing an NFT collection for a retail brand that violates copyright is subject to removal from the marketplace. Therefore, for you to make a profit, every digital item must be 100% unique.
Among those already actively using NFT and those just looking at the new technology, there are disputes about the advisability of financial investment.
Gartner predicts that by 2026, about 25% of Internet users will spend up to an hour daily in the virtual world. At the same time, the market of the metaverse, where cryptocurrencies “rule,” could reach $42 billion. Since NFT is a commodity purchased with various digital money, developing branded tokens gives retailers a pass to the promising market.
However, many beginners have questions about pricing, authenticity, and scalability.
Many luxury brands use the price divide to have a more stable income. For example, luxury goods start at $10,000, while samplers or small accessories are more affordable for the average shopper. At the same time, the brand retains the “exclusive” label. Precisely the same approach is easy to implement in NFT. Thus, they can make a profit by positioning themselves as a supplier of luxury items.
Another advantage to launching such an influencer campaign in retail is the ability to reach a broad audience and gain brand advocates. The point is that you can use blockchain technology to verify the authenticity of this or that product. Therefore, a customer attracted by a media persona will be confident in their purchase. It also helps many retailers to fight counterfeits, which positively affects profits.
On Twitter, Tether co-founder William Quigley said:
“All consumer products – that can’t be eaten – in the next ten years will have digital twins. They will have NFTs.”
Many enthusiasts and experts in the tokenization industry share this opinion. Moreover, retailers can produce collections that replicate real products and scale by developing NFT projects in the metaverse. A striking example is the video game from Louis Vuitton.
Creating tokens of creative items or various goods is gaining momentum among retail giants and small companies. Many stars and media personalities are eagerly joining this movement. Thus, there are new opportunities for business promotion in influencer marketing.
It is necessary to follow trends to receive stable profits, increase customer loyalty and popularize your own brand. If you want to create a successful NFT collection for a retail brand, it is essential to study the target audience carefully, set specific business goals, and choose the right influencer for the campaign.
The article was written by Slava Todavchich, founder of Unikee