Key Takeaways (6-minute read)
- Get the details on non-fungible tokens (NFTs) and where they can be procured.
- NFTs could offer new revenue opportunities for innovative and creative brands.
- The growing metaverse makes NFTs a valuable resource for consumer connection.
- Companies can even use NFTs as a tool for expanding corporate social responsibility.
Unless you’ve been living on another planet recently, you’ve heard about the recent NFT craze. But for those of you who have not yet dived into the waters of cryptocurrency or blockchains, we want to provide a quick guide to NFTs and how they could be the next big asset for leading brands. Whether your company operates mainly in the digital sphere or not, these virtual products could attract new customers, give new and existing ones incentive to engage with your brand, and up your cool factor, especially among the millennial and gen-Z markets who hold the most influence in digital spaces.
What Is an NFT?
Wikipedia defines it: “A non-fungible token (NFT) is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded. Types of NFT data units may be associated with digital files such as photos, videos, and audio.”
And Merriam-Webster further defines a blockchain as “a digital database containing information (such as records of financial transactions) that can be simultaneously used and shared within a large decentralized, publicly accessible network.”
The token in NFT is the asset itself, which functions like a digital collector’s item or product. It might represent a virtual item such as a video game avatar, weapon, or tool; or the token could be used to represent a real-life piece of property such as real estate, a vehicle, an original artwork, or an exclusive piece of apparel. Essentially, collectors can purchase items as NFTs or convert real-life items into NFTs in order to buy, sell, and trade on a blockchain ledger like Ethereum. This virtual marketplace uses secure technology to greatly minimize the chance of hacking, falsifying information, or other digital foul play.
Now, when you enter your virtual home or space in the metaverse, you can fill it with all your NFT collectibles and have your friends over for a housewarming party! (Click here to see how the metaverse is changing business in 2022, as well.)
Three Ways NFTs Could Help Grow Your Business
- Expanding your customer base and driving revenue: The blockchain market is growing rapidly, and with the promise of more immersive metaverse technology and platforms on the way, we don’t anticipate it dying off anytime soon. Digital assets could become just as important to consumers as their corporeal ones once—no doubt some users already consider this to be the case. Your brand has something unique to offer consumers, so why not translate that to the digital world through an NFT? This could help your brand reach a market you have not yet tapped. A new revenue stream could be at your fingertips, just a keyboard away.
- Engaging consumers through unique e-commerce opportunities: If you create it and put it online, they will come. The emergence of digital lifestyle platforms that are transforming social media and online life as we know them also presents brands with the chance to merge their real-life and virtual offerings. It solidifies consumer recognition and engagement online and off, plus creates interest for those consumers by giving them something all-new—perhaps unlike anything they have seen before.
Nike recently took the virtual plunge when it bought a digital NFT creation studio, RTFKT in late-2021. The studio and brand are now partnering with artists to make and sell digital collectible sneakers and more. Previously, RTFKT collaborated with teenage artist FEWOCiOUS to sell real sneakers paired with virtual ones, selling 600 pairs plus NFTs in seven minutes and netting over $3.1 million. Needless to say, it’s impressive, and brands should jump on these types of innovative opportunities now if they want to become leaders in blockchain e-commerce.
- Connecting through Corporate Social Responsibility Online: Last summer, Tafi, a design studio specializing in online avatar creation and digital wearables, partnered with Coca-Cola by designing virtual apparel and accessories for Coca-Cola’s first-ever NFT collectibles offering in the metaverse. The megabrand celebrated International Friendship Day on July 30 by auctioning an NFT loot box on the blockchain OpenSea, with proceeds benefiting the Special Olympics.
The Friendship Box contained Tafi-designed digital apparel in the form of a The Coca-Cola Bubble Jacket Wearable that can be worn forever in the virtual metverse of Decentraland. Its other contents included a “Coca-Cola Friendship Card” digital badge, a fun Coca-Cola Sound Visualizer, and the Coca-Cola Vintage Cooler NFT. As a bonus, the highest bidder also received a real-life Coca-Cola Vintage Cooler retro-style fridge by Smeg, stocked with Coca-Cola products to share with friends IRL.
These are just a few ways NFTs and other digital assets can help your business as we see monumental growth in online lifestyle hubs such as metaverse platforms. As a digital experiential studio, watching progress unfold on these types of opportunities for brand-consumer connection is exciting for the team at Digital Caliente. Get in touch with our creatives to discuss how we can expand your business’s growth through a digital strategy that will align with your goals and ideas. It’s time to step up your game, both online and off.