What do NFTs mean for brands?

NFTs are one-of-a-kind digital tokens that can represent literally anything, and use blockchain technology to prove ownership.

Wondering if there’s money to be made in something so intangible? Christie’s generated $69 million for the first NFT to be sold at an auction. The artist, known as Beeple, took 5k images over 13 years and paved the way for the future of digital art by creating a buzz in the NFT market.

NFTs are establishing themselves as a complex and misunderstood buzzword whilst creating a completely new industry. Everyone wants a piece of the pie, but there is mass confusion around what the pie actually is, how to bake it and what eating it really means.

What do NFTs mean for brands?

NFTs offer brands an opportunity to explore innovative and impactful ways to engage with their audience and build their community. Through early adoption, forward-thinking brands are paving the way for the future of NFTs. Brands have taken to NFTs in different ways. Most are jumping on the sale of them, but many are facilitating the use of them — mainstream social platforms now let you use NFTs as your profile picture. The value of digital products can be difficult to gauge, but NFTs have succeeded at giving intangible digital value measurable substance. Brands are creating tangible value by pairing NFTs with a service or a digital product. With an ever-growing list of brand examples to show us how it’s done (we’ll feature these in our next article), the tricks of the trade are becoming a bit more clear.

As NFTs become more mainstream, utility and value are essential: brands shouldn’t jump on the hype just for the sake of keeping up. Brands wanting to enter the world of NFTs need to identify IF their fans will engage and HOW NFT offerings can deepen that connection. The biggest risk a new NFT strategy poses are high costs and niche audiences. If your existing audience doesn’t include a crypto-native subset, this move may be premature as the concept is yet to be adopted by mainstream audiences.

Getting into the space poses complex barriers to entry for brands; it requires a deep understanding of the world of crypto. The most effective way to get started is by establishing your brand strategy and roadmap. If your dive into the world of NFTs is supported by our research, we can introduce you to our network of experts who can set you up on the major NFT platforms.

What is the future of NFTs?

NFT X resale authenticity

NFTs have the power to revolutionise secondary markets for physical items. As it stands, few physical items are worth more on the release market than they were when purchased new. Manufacturers rarely capture value when their items are resold, only high-value items (such as classic cars and vintage Chanel bags) accrue value and justify the certification and verification when being resold. An NFT-seal of authenticity could be the answer to resellers’ prayers by creating substantiated trust. It could also empower brands to invest and integrate secondary trading into a branded retail experience that furthers their sustainability credentials.

VIP access

NFT trailblazers have taken the Nando’s black card blueprint, and taken it a step further. Instead of a physical membership card, customers can use NFTs to grant themselves access to exclusive discounts and events. There’s also the opportunity to link NFTs to experiential activations, and still push exclusivity as a value-driver.

Exclusivity incentivises purchases, and provides brands with free advertising opportunities. The NFT can then accrue value beyond the recurring discount and can be resold or traded. Discounts drive immense value in the e-commerce world, encouraging repeat purchases and keeping your customers loyal.

NFT X product pairing

E-commerce brands have adopted the use of tokens to build loyalty and engagement with their audiences. Many brands are pairing NFTs with physical products to skyrocket their value. Brands could create a limited edition series of their product alongside a bespoke matching NFT to allow users to showcase their purchase in the digital world as well as IRL. They can also create virtual currency to spend on digital goods and services, and reward actions with real-life currency.

NFT X lifetime warranty

Is there anything more reassuring than knowing a physical purchase has a lifetime warranty? NFTs can offer this value guarantee in a way that will last forever. By attaching a warranty to an NFT, the users can ‘show off’ their limited edition NFT version of their purchase immediately, instead of having to wait for the physical product to arrive.

NFTs will play a huge part in the future of brand offerings and community engagement. Brands need to create an agile, tech-savvy strategy to engage with their community and subsequently grow their loyal fanbase. Whilst it requires a specific skill set to succeed in the field, brands that nail their brand and actions thereafter will make serious money. Not only will NFTs transform the relationship between brands and customers, but they will also pave the way for the future of business and its marketing.

Get in touch to discuss your brand and NFT strategy: hello@lovegunn.co.

Keep your eyes peeled for part 2: HOW BRANDS ARE USING NFTS & HOW YOU CAN GET STARTED.

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Co-Founder @LoveGunn

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Christian Gunn

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Co-Founder @LoveGunn

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