When we talk about NFT, or non-fungible token, many people see it as a new form of digital art ownership. The reality is NFT, an emerging technology, does not center around digital arts. NFT provides new opportunities for businesses to connect with customers, enhance interaction and customer loyalty, and build new revenue streams. The following are some utilities and business use cases.
- Branded NFT Collections
The avatar is our digital identity in the virtual world. Similar to the physical world, people also want to dress up digital accessories like dresses, bags, and shoes for self-expression. Selling branded NFT collections not only helps attract public attention but also helps build new revenue streams. Some large brands are already making money by creating NFTs. According to the NY times, Nike sold an NFT Sneaker for $134,000. Adidas released an NFT collection called into the metaverse and earned more than $22 million from the sales in the first afternoon, according to the Verge.
Another NFT brands case study on performance analysis of large brand NFT projects on Ethereum Blockchain by @kingjames23 on Dune, in terms of total NFT revenue, Nike is topped the list at 183.77m, followed by Dolce & Gabbana and Tiffany, respectively at 23.67m and 12.62m. And as to the total royalties, the top one is still Nike at 90.66m, followed by Adidas and Time Magazine at 4.75m and 3.71m respectively.
2. Loyalty Program
Traditional loyalty programs have less flexibility. Most rewards have expiration dates, cannot be transferred nor sold in the marketplace, and are limited to points redemption in exchange for branded-specific products. NFTs, backed by blockchain technology, can be traded on secondary NFT marketplaces, such as OpenSea.
NFT is rare. It provides NFT holders with a sense of unique status and scarcity. By introducing NFTs into the loyalty programs, the future of the loyalty program will not only be used as proof of membership but also an ownership and achievement that allows brands to create a new and unique experience for loyalty and rewards programs without being restricted to traditional formats. Some big brands have already adopted NFTs in their loyalty programs.
Starbucks announced its web3-based rewards program by incorporating NFTS into parts of its loyalty program. In one of the Starbucks blog posts, Brewer and Brotman wrote, “We plan to create a series of branded NFT collections, the ownership of which initiates community membership and allows for access to exclusive experiences and perks. The themes of these collections will be born of Starbucks artistic expressions, both heritage and newly created, as well as through world-class collaborations with other innovators and like-minded brands.“
Adopting NFT into loyalty program is not limited to Food and Beverage industries. Beauty brand Clinique ran a competition for its Smart Rewards program, offering limited-edition NFT, early access to new physical products to three lucky winning members, and giving them access to various Clinique products once a year for the next decade. Hospitality brand Marriot Bonvoy launched its NFTs during Art Basel. The brand partnered with digital artists to allow three lucky individuals to win one of the NFTs and 200,000 Marriott Bonvoy points.
3. Exclusive Access or Offers
Another use case of NFT is to give NFT holders access to exclusive rewards, such as limited edition products, exclusive content, and VIP tickets for music festivals, concerts, and conferences. Some brands have begun implementing NFT-based memberships to grant exclusive access, reward most engaged customers by airdropping limited edition NFT or exclusive access or privileges, and provide special offers to NFT holders.
Gary Vaynerchuk, a social media master, prestigious keynote speaker and podcast host, will open the “NFT restaurant’ Flyfish Club in New York City, but only NFT holders of the Flyfish Club can gain access to the restaurant. According to Fortune Magazine, the Flyfish Club has already raised 14 million through the sale of nearly 1,500 tokens. His other NFT project, Vee Friends, offers holders three-year access pass to VeeCon. The one-to-one access holders have the opportunity to one-to-one meet him via Facetime.
Another example is The Bored Ape Yacht Club, a collection with a fixed supply of 10,000 unique Bored Ape NFTs that the NFT holders can access to members-only benefits, the first of which is access to the BATHROOM, a collaborative graffiti board. In the secondary NFT market Opensea, the floor price of the Bored Ape Yacht Club is 77.28 eth with 6.5K owners.
NFTs have huge potential. Australian Open Art Ball, the first official Australian Open NFT, provides NFT holders voting privileges, whitelists for future events, members-only Discord, and virtual access to live match data and match-winning points for every match of the Australian Open.
4. Experience Land
Some big brands have developed NFT-powered experience lands like Gucci Town, NikeLand for their Brand promotion, and NFT Collectibles in the metaverse. According to Nikelandstep, “Nikeland is a decentralized virtual world sandbox building game that supports NFT creation and trading and Play To Earn mode. Anyone can own virtual land in the Nikeland world, design and create various buildings and virtual items, and realize the auction and exchange of virtual items through NFT.”
Tony Hawk, an American professional skateboarder, is building the metaverse’s biggest skatepark providing a comprehensive web3 experience for skaters who dream of finding a virtual place to enjoy the distinctive experience outside the constraints of the physical world. According to the press release, “Autograph will create Tony Hawk avatar NFTs based on Tony Hawk and his most iconic skateboards, equipment, and apparel including the legendary skateboard Tony Hawk used to land the 900 at the X Games in 1999.”
5. Charity Fundraising
NFT has become a global trend. Some charities are adopting NFT for charity bidding. Tung Wah Groups of Hospitals (TWGHs) launched the NFTs marketplace in 2022 for charity sales and bidding on NFTs. On TWGHs’ website, the purchase will be donated fully with no deduction for management costs to support the various services provided by the Tung Wah Group of Hospitals.
Final Thoughts
Although NFT utilities are still in their infancy, the possibility of NFT utilities is endless. NFT offers new opportunities for brands to connect with the community, build deeper relationships, reward the most engaged customers, and create an unforgettable experience. Therefore, brands should have a long-term vision of NFT marketing.
Key Takeaways
- NFT offers new revenue streams to businesses via selling NFTs or receiving revenue from royalties.
- Brands can offer exclusive rewards or access to branded NFT holders or specific NFT holders.
- NFT is not limited to digital collections. It can also be used to sell exclusive physical products. For instance, Tiffany released 250 digital passes called NFTiffs that can only be purchased by CryptoPunk NFT owners. The digital passes allow the owners to redeem custom physical jewelry items
- NFTs empower brands and customers’ collaboration. To make the NFT holders feel more engaged with the brand and reduce the churn rate, brands can even give them voting rights for business decisions or co-creation involvement for new products or features.
