NFTs, or non-fungible tokens, have taken the world by storm in recent years. They have already shown to be usable for way more than their initial use cases in art. As a brand, you might be wondering if you should get in on the action and start using NFTs to represent and promote your products or services. Let’s take a look at why your brand should leverage NFTs and how various industries are already leveraging NFTs.
Why Your Brand Should Leverage NFTs
From shaking up the art world to tokenising real estate to improving customer loyalty programs. NFTs are widely usable, but most use cases rely on the general benefits of using NFTs. Here are a few reasons why your brand should leverage NFTs:
- NFTs provide ownership and authenticity
- NFTs can drive engagement and loyalty
- NFTs can increase brand visibility and reach
- NFTs can generate new revenue streams
Providing ownership and authenticity
One of the biggest benefits of NFTs is that they provide a unique, verifiable way for consumers to own and collect digital items. With an NFT, you can prove ownership and authenticity of a digital asset. Regardless of whether it is a piece of art, a virtual collectible, or even a digital product or service. This can be especially appealing to collectors and fans who value the exclusivity and rarity of certain items.
And with recent advances in technology, the thin line between the digital and physical world is also getting increasingly thinner. With luxury brands already using NFTs to combat counterfeit products and create digital twins of physical products and liquor producers using NFTs to guarantee the provenance of their products.
Driving engagement and loyalty
By using NFTs, you can create a sense of exclusivity and community among your most devoted fans and customers. For example, you could offer limited edition NFTs that are only available to a select group of loyal customers or fans. This can help drive engagement and loyalty. People will feel more invested in your brand if they have a unique and exclusive item that represents it.
Increasing brand visibility and reach
Using NFTs can also be a great way to increase the visibility and reach of your brand. By creating and promoting NFTs that are related to your products or services, you can tap into the growing community of NFT collectors and enthusiasts and expose your brand to a new audience.
Generating new revenue streams
NFTs can also be a useful way to generate new revenue streams for your brand. By selling NFTs related to your products or services, you can create a new avenue for revenue. This can be especially appealing in the digital world, where traditional ownership models can be more challenging.
The Risks and Pitfalls of Using NFTs
While everything seems to be in favour of the usage of NFTs, as with everything, there are also some risks and pitfalls that should be considered when using NFTs. The two foremost risks and pitfalls of using NFTs are fraudulent NFTs and the high volatility of NFT values.
One risk of using non-fungible tokens (NFTs) is the potential for fraud or misrepresentation. Since NFTs are often used to represent unique or rare items, it is possible for unscrupulous individuals to create fake or altered NFTs and sell them as genuine. This can result in significant financial losses for buyers who believe they are purchasing a valuable or authentic item.
High volatility of NFT values
Another potential pitfall of using NFTs is the volatility of their value. The value of NFTs can fluctuate significantly over time. The indicated can depend on a variety of factors. Such include market demand, the perceived value of the underlying item, and the overall health of the cryptocurrency market. This means that the value of an NFT may increase or decrease significantly in a short period of time, leading to potential financial losses for holders.
Depending on how your brand uses NFTs, these risks/pitfalls do not have to be significant, though. A platform on which your NFTs could be bought/sold/attained could automatically filter out fake NFTs already, for example. Or if the value of your NFTs is tied to a certain physical asset or service, the value of the corresponding NFT tends to be less volatile. Nevertheless, it is good to be mindful of these risks and pitfalls.
NFTs in the ‘Real World’
Before concluding the article, let’s take a look at some examples of how NFTs are being used in various industries. Examples are the hospitality industry, gaming industry, and politics!
NFTs in the hospitality industry
A loyalty program uses NFTs as a way to reward and engage customers. For example, a business could create an NFT that represents a certain level of loyalty, and offer it to customers who reach that level. Customers could then redeem the NFT for rewards, such as discounts, exclusive products, or early access to events. NFTs can also be used as a way to create a sense of community or exclusivity among customers, as they may be able to purchase and trade NFTs with each other.
Customers can also use NFTs as a way to offer unique experiences or rewards. For example, a hotel chain could create an NFT that represents an exclusive VIP package, which includes perks such as private check-in, room upgrades, and access to a special lounge. Customers could purchase the NFT and redeem it for the VIP package during their stay. NFTs could also be used to represent unique experiences. Namely, a private dinner with the chef or a guided tour of the city, which could be bought and sold by travellers. In this way, NFTs can provide a way for hotels and other hospitality businesses to offer highly coveted, one-of-a-kind experiences to customers.
For more information about NFTs in the hospitality industry read our article here!
NFTs for gaming
NFTs might be used in a variety of ways within the gaming industry. They can be used to represent in-game items or currency, such as weapons or armour, which can be bought and sold within a game. NFTs are brought into play to grant access to exclusive content, such as special levels or events. Additionally, game developers can use NFTs to create a sense of scarcity around certain in-game items, making them more valuable and sought-after by players.
Additionally, the creation of metaverses could prove to be another new realm of gaming. NFTs can really thrive by providing an easy way to own and trade items/property within the metaverse.
NFTs for politics
In the political realm, NFTs can be put to use as a tool for fundraising or campaigning. For example, a political candidate could create an NFT that represents a specific policy stance or campaign promise, and sell it to supporters as a way to fund their campaign. NFTs could also be used to represent digital collectibles related to political events or figures. These could be bought and sold by collectors. Additionally, NFTs could be used as a way to engage supporters and create a sense of community, as supporters could trade and collect NFTs related to the campaign or candidate. More information can be found here.
In conclusion, NFTs can be a powerful tool for brands looking to increase ownership, authenticity, engagement, reach, and revenue in the digital world. If you’re considering using NFTs as part of your marketing strategy, it’s worth exploring the possibilities and seeing how they might fit into your overall branding and business goals.