Why NFTs Will Thrive As A Customer Engagement Tool For Retailers
The non-fungible token boom has exploded into almost every industry. Whether it’s fashion, media, real estate, sports or entertainment, we’re seeing brands from all sectors scramble to embrace the NFT party. With regards to industries such as gaming and sports, the application of NFTs feels almost intuitive. Gaming was one of the first major use cases for NFTs, giving video game players ownership of in-game assets, while for sports fans the tokens are a new and exciting way to collect memorabilia.
For industries like retail on the other hand, it has been harder to put a finger on the exact use case for NFTs. But that hasn’t stopped dozens of retailers and brands from trying to do so.
Until now, most retailer’s NFT campaigns have been test runs by brands with the intention of getting a better feel for the emerging technology. The slow cooker brand Crockpot for instance, last year auctioned off its first-ever NFT, which was just a GIF of its product evolution that was designed to celebrate the company’s 50th birthday. Adidas, meanwhile, seems to have been merely exploring what NFTs are with its purchase of a highly sought after Bored Ape Yacht Club token in December.
Other, more focused yet still experimental NFT initiatives have been spearheaded by fashion retailers such as Gucci and Burberry.
It’s clear from these early efforts that retailers still don't quite know what a successful NTF campaign really entails. What they are sure of however, is the clear benefits that NFT marketing can provide in the retail space.
Enhancing Data Sources + Loyalty
From a marketing perspective, NFTs promise to deliver actionable consumer insights that will become all the more invaluable in a post-cookie world. With Internet tracking being increasingly frowned upon, NFTs can be powerful alternative marketing tools because they’re being rapidly adopted by online communities that happily generate lots of useful data for brands. NFTs can therefore unlock new opportunities for brands to increase digital customer engagement. Each interaction a consumer makes, whether it’s searching through a brand’s products and services on their website, or registering for a promotion, could potentially be driven by NFTs.
As retailers first enter the NFT space, they do it with the knowledge that the tokens are a way to create first-party connections that can be leveraged in future campaigns. NFTs are also incomparable in the way they provide real insights into metaverse behavior. The metaverse is widely expected to become a multi-trillion dollar opportunity, so brands stand to benefit immensely from increasing their understanding of how people will interact with a brave new world that many expect will have serious implications on the retail landscape.
The COVID-19 pandemic made many retailers understand that they can never take the prospect of returning customers for granted. Lockdowns changed consumer behavior forever, forcing retailers to rethink their customer loyalty programs to ensure that those who do consider returning have extra good reasons to do so. These days, many of the creative rewards and perks that brands come up with reflect the analytics-driven mindset that has become the standard in marketing departments. It’s a backdrop that suggests the retail industry is primed for NFT adoption. Consumers today are increasingly seeking out NFTs, and through them retailers have a ready-made way to boost their loyalty programs by creating their own tokens as rewards.
Exploring The Possibilities
Some in the NFT industry are helping retailers to explore the technology’s potential. AAX Trends, a subdivision of the AAX cryptocurrency exchange, recently opened a pop-up NFT store in Hong Kong to celebrate the developments taking place in the space and help brands explore the potential of blockchain-based digital collectibles.
AAX’s pop-up store showcases a wide selection of NFTs, including some of the earliest tokens and many that were designed by the local community. The company explained its belief that NFTs hold the key to a future of limitless possibilities for digital assets.
“This AAX Trends pop-up explores the evolution of non-fungible digital assets and the potential and possibilities for NFT applications,” said AAX Head of Research & Strategy Ben Caselin. “By bringing together industry leaders, artists, and a curious crowd, and taking a deep dive, AAX Trends hopes to foster more understanding and uncover new perspectives on the NFT space.”
New Consumer Touch Points
While the NFT bonanza appears to have peaked, at least in terms of multi-million dollar token sales hitting the headlines every couple of days, there’s no suggestion that consumers have any less appetite for them. Fact is, NFTs have become extremely desirable assets for art lovers and crypto enthusiasts alike. Few doubt that their value will continue to grow as the metaverse expands.
Today’s customer journey involves multiple touch points and more channels than ever before. Retailers have been forced to expand to cater to each and every one, and NFTs will not be any different. As their prevalence grows in other industries, NFTs will become increasingly sought after. They could well emerge to play a key role in the customer experience spectrum.
Retailers may still be experimenting with NFTs and their impact on customer journeys, but it won’t be a wasted endeavor. The role of NFTs in retail has already grown to the point that widespread adoption seems like it is only a matter of time. Who could have predicted just a few months ago that Selfridges would start selling NFTs, offering digital goods inside its physical stores for the first time? And yet here we are.
What the retail industry has come to understand is that NFTs are highly effective tools for continually engaging with customers, generating regular insights into their behavior. Retailers may not yet recognize the best way to implement NFTs into their physical business, but th e moment they do so, there will be no looking back.
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