Forbes India – NFT, Digital Assets, Metaverse, MG Motor, MakeMyTrip, PVR Cinemas, Nike: 5 Innovative Ways NFTs Are Replacing Traditional Loyalty Programs
Search the web for NFTs (non-fungible tokens) and you’ll see top results on digital art NFTs auctioned for millions of dollars and pixelated profile pictures bought for thousands. It is difficult to understand where the value stops and where the bubble begins. There is undoubtedly a significant amount of speculation and FOMO (Fear of Missing Out) behind the NFT revolution. Yet there is something fundamentally new here. For brands, NFTs are an opportunity to redefine the way they interact with their most loyal customers and fans.
1. Build customer loyalty through emotional engagement
In October 2021, beauty brand Clinique launched an online contest encouraging customers to share stories of joy and optimism. Three contest winners were rewarded with a Clinique-branded collectible digital NFT that provided access to fan-favorite out-of-stock merchandise. The three NFT holders will receive an assortment of branded merchandise once a year for the next decade while claiming a piece of the brand’s heritage.
One of the conditions of participation was that consumers had to join Clinique’s Smart Rewards membership program, modernizing how loyalty programs work. By opening NFT access only to members of its loyalty program, Clinique both rewards members and incentivizes others to join through registration.
Representing brand-inspired digital art as NFTs allowed contest winners to publicly display their success in winning the contest. It also allowed them to include the Clinique brand in their identity. Think of it as the digital equivalent of wearing a branded t-shirt.
Along the same lines, Spartan Poker in India launched digital trophies and awarded them to the best players in their online gaming community. As NFTs, these digital trophies can have wider visibility in the digital world than the physical trophies that typically end up in the living room. Brands like MG Motor, MakeMyTrip, and PVR Cinemas have also launched NFTs for their brands.
NFTs are becoming a way for customers to display the brands they love, the causes they believe in, the stories they relate to, and the art they enjoy.
2. Gamify brand engagement
In September 2021, Burger King collaborated with three musicians to create a new product offering called “Keep It Real Meals”. Each meal box came with a QR code, and customers who purchased these meals could scan the QR code to collect collectible digital NFTs, simulating a scavenger hunt. Each musician had nine unique digital collectibles. Depending on the number of people collected, customers could earn rewards such as a year’s supply of Burger King Whopper sandwiches, exclusive autographed merchandise and even a call with one of the partner musicians.
At first glance, this campaign was the digital version of McDonald’s Happy Meals, complete with a small toy. So what’s up?
Moving from physical collectibles to digital collectibles is, above all, a recognition that we increasingly live our lives online. Thus, digital collectibles are as valuable as physical collectibles, if not more.
Unlike physical collectibles, which require the supply chain and distribution network to be in place, digital collectibles are much easier to manage, faster to implement, and most importantly, allow the brand to engage directly with its most loyal customers on a digital platform.
3. Phygital products
In October 2021, Glenfiddich sold a series of fifteen 48-year-old limited edition whiskey bottle collections under the NFT name. What does that mean? Consumers could purchase an NFT that serves as an authentication token for the liquor bottle stored with Glenfiddich until redeemed. The holder of the NFT can either redeem or trade the NFT.
But why launch a traditionally physical product like an NFT?
The big idea is that the NFT works like a digital token representing the physical product. By offering the token for sale, while continuing to hold the bottle as a service, Glenfiddich effectively offers aging as a service. Some products get better with age, and NFTs are a great way to convey value to brand connoisseurs and build a long-term relationship with them.
4. Engage the creator economy
In January 2022, Adidas and Prada teamed up to use NFTs to engage the designer community by inviting designers to submit their works. That’s no surprise, considering 50 million people around the world consider them creators on platforms like TikTok, Instagram, and YouTube. A world-renowned digital artist selected 3,000 artworks and compiled them to create a unique user-generated artwork, which was sold as a digital collectible. Proceeds from the sale were shared with 15% to the fan creators, 5% to the curating artist, and 80% to a non-profit organization.
This brand engagement campaign is a great example of the second-order impact of NFTs for brands. As digital NFT art becomes valuable on its own, brands co-create NFT art in collaboration with their customers and use the proceeds to support causes their customers believe in. The ownership and connection generated by such emotional engagement is perhaps much more powerful. than a point-based transactional loyalty program.
5. Into the Metaverse
In December 2021, Nike announced the acquisition of RTFKT Studios, a digital design studio specializing in the creation of digital sneakers. Nike has started selling digital sneakers that people can buy for their digital avatars. This is a great example of a brand expanding its product portfolio to sell digital assets in the metaverse.
Expect everything from cars and bikes to fashion brands to launch products into the metaverse as it matures. Additionally, since the only universal way to record ownership in the digital world will be NFTs, expect them to be the backbone of commerce in the metaverse.
Take away key
NFTs are a foundational technology. With specialized NFT platforms optimized for brand engagement, marketers can use innovative campaigns to engage their customers and build brand loyalty.
The writer is the founder and CEO of KoineArth, the creator of the ngageN NFT platform.
The thoughts and opinions shared here are those of the author.
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