In just a couple of years, the NFTs market is about to explode to $800bn, according to Bloomberg. Don’t think it is all about the hype and it will balloon out soon. In reality, what is truly interesting about NFTs is the tech behind them and the built-in promise that people will reclaim ownership of their digital eCommerce relationships with brands. NFTs could be the door to web3 for traditional commerce and we already see plenty of big brands playing it and seeing astonishing results.
“NFTs aren’t just products— they’re somewhere between a product, a game, and code. If you’re not using all those things, you’re really not using this medium to its full advantage. It’s all about the interactivity.”
- Paul Budnitz President, Founder, and CEO, Superplastic
It should not come as a surprise that all big brands are plugging NFTs into their strategies for 2022 and beyond, as a way to stay ahead of competitors with the latest trends in eCommerce. I will share the top three of them with you, along with an insight on how NFTs fit into the big picture.
1. Brand identity wins the spotlight
Growing competition and acquisition costs seem to be the biggest obstacles for brands in 2022. After recent regulations and the ever-growing consumer concern about privacy, “some brands are seeing ad prices go up 5X for the same amount of traffic”, shares the founder and CEO of Privy, Ben Jabbawy.
Yet, almost half of the brands, according to a recent Shopify market report, are still willing to heavily invest in paid and organic search. Many hope that the advancements in audience segmentation will make their money worth it. This looks more like a gimmick, though, if you are aware of Harvard’s Business Review results when testing the accuracy of the so-called, digital profiles. Gender was correctly identified under 50% of the time and the age group was a bit over 20%. Imagine the numbers for tighter segmentation…
It’s no brainer that the world’s top companies have chosen brand building at the core of their marketing strategies in 2022 and beyond.
On the contrary, the majority of smaller or start-up brands that need to cut costs are not considering this trend, which is well supported by numbers. 70% choose to devalue their brand identity and put all of their eggs into one basket - the performance-based approach. Do you see the irony?
Forward thinking companies are not only investing in building their brand but they are also already taking a step further by incorporating NFTs into their strategies. Take for example Nivea and their NFT touch collection. Your brand perception could also be updated with an innovative approach to cause marketing and philanthropy by integrating NFTs, as Budweiser did.
2. Personalization is key
The majority of consumers want and expect from brands a much more personalized experience, says current McKinsey research. And 60% agree that they would become repeat buyers if delighted with a personalized shopping experience, according to the State of personalization report by Segment.
Yet, a recent Google survey reveals that 62% of consumers find ads derived from personalized tracking to be creepy. This information seems baffling at first, but in fact, it shows two very interesting trends. One, people are willing to give out their personal information only to brands they know and trust. Second, and equally important, people are craving brands to find innovative ways to approach them.
Brands are already committing to more transparency to encourage first part data sharing from their customers. Almost half of the brands, according to Shopify, plan to collect consumer data through quizzes, custom mobile apps, etc. The ones who truly understand the marketing game understand that the time has come for brands to rethink personalization. Ads could no longer be intrusive, they must be an integral part of the user experience. This is where NFTs come in to fill the gap between the users' desire to have personalized experiences and their dislike of ad trackers.
3. The evolution of communities
Along with building a strong brand presence, developing a strong community around your customers and fans will be essential to thrive in 2022 and beyond. Strong brand communities are not accidental, they are the fruit of a long-term strategic commitment of time and resources.
The key to developing a strong community is to choose a medium where people can connect and interact with each other. Another key aspect is adding a sense of exclusivity for your top followers. While social media, chat channels, email, podcasts, etc. do the job to a certain degree, NFTs add an innovative touch that puts you way ahead of the competition.
Take for example the live festival industry that is jumping on the NFT wagon by deploying a new type of NFTs called POAPs (Proof Of Attendance Protocol). The Lollapalooza music festival is one of the pioneers in using POAPs in collaboration with The Bored Yacht Club. Each festival ticket comes with an NFT attached to it. Collecting POAP NFTs serves guests not just to keep a memorable record of their experiences but also gives them access to exclusive private communities with additional special perks.
“The bridges that POAPs forge between our digital identities and our physical lives provide a tangible layer to our experiences and memories,” said Oana Ruxandra, WMG’s Chief Digital Office
What else makes NFTs different from your regular “gated perks” such as gifts, discount coupons, early bird access passes, etc. is the fact that you can incorporate all of these into just one NFT. On top of that this NFT will also be a way for your fans to literally own a piece of your brand, as the NFT price on the NFT market grows alongside your brand.
Much like in the early days of Web1, it is crucial for brands to make sure that they don’t fall behind. It is equally important not to jump into “the next hot thing” just to “check off the NFT box”.
If you are not sure where to start but you want to push your brand to the edge of innovation, contact our creative team today to discuss the best NFT strategy, specifically tailored for you.