How will NFTs Become a New Product for Major Brands?

Shivani Sharma

Jun 27, 2022

Business

The NFT craze has been sweeping the globe like wildfire. NFTs, for the uninitiated, is a sort of digital asset that uses blockchain to track asset ownership. This growth in the NFT mania isn't only confined to world-famous celebrities; global corporations are also quickly joining the NFT bandwagon. When it comes to alternative investment possibilities, non-fungible tokens (also known as NFTs) are one of the most peculiar. An NFT is a type of digital asset that is linked to the Ethereum blockchain. You could be acquiring a digital piece of art, the rights to a tweet or logo, or even a play-to-earn character when you invest in an NFT. While it may seem unusual to invest in a digital asset, NFTs are now on a crazy trajectory that appears to be traveling "to the moon," as they say.

NFTs are created utilizing blockchain technology and contain unique identifying codes, making them digital assets that can't be replicated, similar to owning an original work of art online. And they're increasingly being used as part of the marketing mix by both traditional and cutting-edge firms.

What Kind of Results are Brands Getting From NFTs?

Whether excited or not, NFTs have been transacting in large volumes since 2021, when $25 billion was traded, a new peak since their inception.

Brands paying attention have pounced on the NFT craze and are profiting from it. In collaboration with Bored Ape Yacht Club, Punks Comics, and GMoney, Adidas, for example, moved nearly 43 million dollars in NFTs.

Brands have been gaining branding successes with their customers, giving them unique experiences, building a feeling of community, and making younger audiences more easily tuned into new technology and financial rewards. Breaking down barriers between the physical and digital worlds has allowed businesses to access areas they couldn't have imagined before, such as gaming and entertainment, and even get the awareness of social impact initiatives.

Start with your branding and digital marketing plan if you want to start investing in NFTs for your company. Define your expectations for this new strategy. Do you want to broaden your audience's reach? Strengthen the sense of belonging in your community? How can you get your supporters to care about your brand? Do you want to contribute to social causes?

Always keep in mind that strategy comes before tactics. Another vital issue to consider is whether or not your target audience is interested in this new trend. Only then will you be able to delight your audience while also increasing brand awareness.

Non-Fungible Tokens' Advantages and Disadvantages:

Pros:

NFTs give a blockchain-based record of authenticity and ownership that can be verified.

They've created a new market for wealth creation that has a lot of room for expansion.

With (smart) contracts, NFTs increase efficiency by streamlining procedures and removing intermediaries.

They enable a new marketplace for artists, allowing them to sell directly to collectors while also receiving royalties on resale.

As the economy and businesses prepare for what comes next in a post-pandemic future, NFTs may be an excellent way to diversify your financial portfolio. (Of course, this is only true if you have the risk tolerance and liquid capital to invest in the first place.)

Depending on the developers, some NFTs provide real-world benefits such as access to high-end events, groups, or associations.

Cons:

NFTs are speculative and illiquid investments. There isn't much historical data to research because it's a new asset and marketplace.

It's a hazardous investment. The worth of any piece of art, digital or physical, is relative and relies on what someone is prepared to pay for it. That is the "unique" nature of an NFT, which can be seen as a benefit or a disadvantage.

They harm the environment. Over time, the implications of generating NFTs, or any cryptocurrency, can have a substantial long-term negative impact on our environment.

Within the space, there is the possibility of fraud and scammers. NFTs can currently be hacked and stolen, despite the blockchain, which adds another significant risk to consider.

The Following are Seven Notable Brands That Have Joined NFT:

Coca-Cola:

Coca-Cola has always been at the top of its marketing game, from its worldwide renowned cola recipe to its commercial campaigns. For years, their polar bears were charming. By simply placing people's names on their bottles and cans, the company has run giveaway ploys, built point systems, and achieved great success. Plus, they've always been excellent in their ability to buy other soft drink businesses and deliver clean, bottled water too much of the world. They started with four different animated NFTs that included multi-sensory experiences and exclusive gifts for the first owner. Since then, they've run a couple more NFT campaigns and even used NFT auctions to produce giveaways.

Asics:

Asics' Sunrise Red line, which debuted in July and comprised limited-edition digital shoes (each of the collection's nine designs) made in conjunction with various digital artists, was one of the first to get on the NFT bandwagon. The proceeds from the 189 digital assets (20 of each silhouette) were reinvested in the artists via Asics' Digital Goods Artist-in-Residence Program, which was described by the sporting brand as a "celebration of sport, a first step in building a future where digital goods inspire physical activity." A metallic gold colorway was also available in a limited-edition run.

Nike:

Everyone enjoys a beautiful pair of Nikes (maybe except die-hard followers of the following company on the list), as their footwear has captivated fans for decades. Nike has been a staple apparel company for quite some time, and its athletic clothes support followers and brands worldwide. Nike has begun to test the digital waters while a new wave of technology, Web3, and the Metaverse, is on the horizon. Nike purchased RTFKT, a firm that uses the most recent in-game engines, NFTs, blockchain authentication, and augmented reality to establish its virtual shoe brand before 2021. Now, the corporation can offer athletes, organizations, and themselves a way to conduct digital campaigns.

Hot Wheels by Mattel:

Leading toy company Mattel put out NFTs in its highly collectible Hot Wheels brand in the run-up to Christmas 2021, releasing 40 various NFT Hot Wheels designs for consumers in November at a starting price of US$15 each. Packs of four or ten NFTs with an iconic animated design of the brand's cars were available. Each collector had a 5% chance of landing on a rare vIRL token and owning a limited-edition real-life die-cast vehicle, with more than 5,000 NFTs redeemable for a physical replica of exclusive Hot Wheels.

Taco Bell:

Taco Bell auctioned 25 NFT GIFs on the NFT marketplace Rarible in March to raise brand awareness while helping a worthy cause. The NFTs paid homage to the legendary Taco dish by combining the digital and physical worlds. The inaugural 'Transformative Taco' purchaser received a US$500 electronic gift card to spend as they pleased. While each GIF began with a bidding price of $1, all 25 NFTs sold within 30 minutes for thousands of dollars, with one going for as high as $3,646. The Money went to the Live Mas Scholarship, which helps young people further their education.

Samsung:

As one of the world's largest and most powerful tech corporations, it would be surprising if Samsung did not enter the NFT market. The good news is that the corporation is outdoing itself with NFT technologies and solutions that the average individual can benefit from.

Samsung has created the world's first "TV screen-based NFT explorer and marketplace aggregator," allowing users to search, browse, buy, and display NFTs directly from their television. People will also be able to share NFT art with other users worldwide through the aggregator. Samsung is creating TVs that will automatically alter to appropriately display an NFT the designer intended it to be viewed to accommodate the different sizes, mediums, and display options NFTs are privy to.

Gucci:

Luxury items, particularly in the fashion industry, are an attractive application for NFTs. Clothing and accessories are strong advocates for tying digital and physical products together via NFTs. Web3 integrations and NFTs work hand in hand, as evidenced by the clothing brands on this list. This phenomenon is not exclusive to Gucci. The high-fashion label held an online auction for its Fall/Winter collection at the end of 2021.

Conclusion:

All of these major brands have at least dabbled in NFTs, and we should expect them to ramp up their digital efforts in the future. Although anyone can utilize popular NFTs to collect funds for charity purposes, it's exciting to see giant corporations embrace new technology and their names for good reasons. While it's true that NFTs, like certain types of crypto, are open to everybody, they've become even more popular since giant corporations have accepted them. Taking advantage of the NFT movement is a fantastic opportunity for anyone.