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Whether we’re ready or not, NFTs are changing the consumer market and will continue to do so in the future. Here’s how they’ve done it.
In the world of digitally empowered consumerism, NFTs have significantly impacted the consumer market and will do so for years to come. The big brands we all know and love Nike, Adidas and Under Armor — have jumped headfirst into digital goods, and it’s no surprise why. The explosion of NFTs over the last two years has been unimaginable, with the market reaching over $41 billion at the end of last year and is expected to reach more than $80 billion by 2025.
Take this specific example as proof: Last December, Nike bought RTFKT, a virtual sneaker designer, to cement its place in the metaverse. That purchase is now responsible for driving huge dividends. In April 2022l, RTFKT and Nike dropped the Nike Dunk Genesis Cryptokicks, a collection of 20,000 NFT sneakers. Since the virtual sneakers launched, individuals have been buying them for between $7,500 and $9,000.
Whether you believe in the future of the metaverse or are still unsure of what it all means, you must accept this as a fact: Brands of all types and sizes are betting on its future. The minting of NFTs has resulted in significant revenue gains for NFT “innovators,” and the proven success of these initiatives is driving a trend to build more and as a result, gain more.
NFTs are unique because of the ongoing potential revenue for creators and brands while delivering a consistent connection to consumers. Because of this, we as a community have to change our thinking. NFTs are not a one-time, one-touch purchase or benefit. It’s far broader than that, and it is growing beyond what we imagined it could be.
Related: What You Can Learn About NFTs From Coca-Cola, Acura and Gucci
The first NFT sales focused on the initial price and the idea that the collector owned the NFT once minted. And while this process was exciting for brands, original prices quickly dropped back down as excitement about the original investment wained. This result demonstrated that the original buyers and their communities were not invested enough to stay with the project.
So where do NFTs go from here? Once an NFT is minted, creators and brands are quick to ask a similar question: What’s next? It’s a good question and has become easier to answer as the market has evolved. Today, it is essential to consider the value beyond the NFT, considering the strength and sentiment of the community and the perceived ongoing benefits and utilities.
So the question becomes, how can we continue to rally those excited about NFTs? There is still a lot to be explored from a brand perspective, but we know this: NFTs can enable rewards and loyalty perks and add value long after the collector has boasted ownership. NFTs can continually build brand equity, offer incentives through a community and promote a product launch or an event. It can be used to show customer appreciation or to provide rewards for top sales producers. Some of the use cases regarding NFTs haven’t been dreamed up yet. It’s similar to when consumers began adopting cloud-based technologies; only after they used these services did they see the benefits and dream of what could be possible in the future.
Related: 3 Compelling NFT Projects Your Company Can Learn From
The idea of adding more “utility” to an NFT has come directly from collectors. Utility refers to the perks or benefits of owning an NFT, which can be added over time. Utility also adds the idea that an NFT can be worth a higher price, as the long-term perceived value is more significant in the collector’s mind.
Another utility drives philanthropy. Nonprofits like The Giving Block sees 30% of their donation volume derived from NFT giving and is working with major NFT platforms to make crypto donations easier by integrating the concept into their core product. Beyond that, many for-profit organizations and artists have donated their own resources, such as NFT design or NFT mint earnings, to make a positive impact. Whether it be reducing climate change, supporting SPCA adoptions or mitigating homelessness, NFTs give brands new way to give back. There is a warm and fuzzy NFT feeling after all.
It’s essential to consider the other side of the NFT story: The content creators and influencers who partner with brands and can help revolutionize the metaverse. NFTs are a potential revenue stream for creators and offer something that collaborations or brand partnerships haven’t offered until this point — an entirely new and unique way to create revenue and facilitate collaboration.
The opportunity for what an NFT can and is expanding rapidly. It is just the beginning of this story. From Death Row Session: Vol. 2 and Bored Ape Yacht Club to ZED RUN and the embedded NFTs found in Louis the Game, digital collectibles will only continue to expand, probably into more places than we ever thought possible.
Where do we go from here? The sky is not the limit; our collective ideas and minds, alongside technology, will fuel the next evolution of NFTs. What is being determined right now is what value they will bring in the real world (wait, the metaverse isn’t the real world?). Let’s face it: NFTs represent the future and brands have a unique opportunity to find new ways to engage their consumers. The future is bright — let’s fuel new levels of success that reach far into the future.
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Brian Buffini
Tommy Wyher
The Staff of Entrepreneur Media, Inc.
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