The past few years have been challenging for retail brands, which are adapting to external market forces like the pandemic and evolving in response to shifting customer expectations. It’s also an exciting time, and many brand marketers are experimenting with new ways to meet people where they are — increasingly in the metaverse and other virtual spaces — to build awareness, drive sales and increase customer loyalty.
Our team at Daz 3D has worked with major brands like Coca-Cola and Warner Brothers that have teamed up on augmented reality (AR) avatar and digital apparel projects. Beauty brand Clinique launched a unique makeup NFT collection in the metaverse to underscore the company’s commitment to diversity and inclusion. Athleticwear brand Champion rolled out apparel and accessory NFTs. However, many other brands, large and small, are still waiting to get their feet wet in the metaverse.
Iconic brands understand that market dominance isn’t guaranteed and are working hard to keep their brands relevant in their respective markets. It’s also true when moving in digital spaces, which are evolving quickly. Brands of all sizes can tap into value there, including through the use of NFTs to create memorable consumer experiences. Just as importantly, brands can use this marketing inflection point to experiment, learn and develop new skills.
NFT Collections Can Help Brands Access New Markets, Reach New Customers
As consumers, we usually like being offered more choice and control. The best NFTs offer unprecedented creative license — new forms of consumer choice and control. Among the best examples are Yuga Labs’ Bored Ape Yacht Club, which gives extensive IP rights to its holders, and RTFKT, recently acquired by Nike, which recently shared the high-quality 3D files of its CloneX avatars with its holders. Both are tapping the hugely creative energy of their fans in new ways that may give traditional marketers pause. But digital marketers who measure media as "paid, earned, or shared" have a leg up in understanding that this emerging creative model is "shared media" amplified. It's a new business model that won’t fly for all brands. However, for the ones that work to find the right fit, it’s a goldmine of genuine fan engagement.
To create connections and experiences, brands can leverage NFTs to serve as a digital talisman that provides exclusive access, rewards and recognition for fan community members. The Pearl Jam 10 Club is an analog version of this type of member-only community — it was created by the iconic band in the '90s to give back to its fans in the form of exclusive experiences, tickets, merchandise, content, and generally to create a strong community around its music. It’s alive and well now some three decades later. Combine all of those elements and add NFTs as the portable, verifiable, transferrable membership token, and you can see how brands can use NFTs and web3 principles to create lasting advantages.
If that sounds far-fetched, consider this: A recent McKinsey study estimates metaverse spending will reach $5 trillion by 2030. Nearly 80 percent of consumers surveyed said they had already made a purchase in the metaverse, and 95 percent of surveyed executives said they expect the metaverse to have a positive impact on their industry.
The NFT strategy is already paying off for early adopters, including Forever 21. The fashion industry is ripe for disruption, and Forever 21’s “twinning” strategy is an innovation that encourages customers to wear the same clothes in the real and virtual worlds. A virtual black beanie became so popular on Roblox that stores began carrying the physical item.
Testing and Learning in New Spaces Helps Brands Stay Fresh
It’s understandable that some brands are skeptical about marketing in the metaverse. The utility of NFTs as a marketing tool depends on consumer acceptance, and for the moment, virtual worlds, digital identities and accessories may still be classified as a niche interest, though momentum among the youngest consumers — a cohort brands are interested in reaching — is a driving force leading toward mainstream acceptance. For young people who have come of age with streaming services and video games, digital ownership is completely second-nature — as is the concept of having a digital identity(ies).
It’s generally beneficial for a marketing organization to stretch beyond its comfort zone, test new concepts and learn from the results. It can help future-proof marketers’ minds as well as the business to take calculated risks, learn a new vocabulary and engage customers in a novel way. These marketers don’t have to go it alone. A collaboration with a trusted partner that has a track record of successful executions in the metaverse is a great way to explore possibilities like promotions that merge real-life and digital experiences or statement collections that lift up the entire conversation in a space, as the Clinique collaboration did.
Whether you consider yourself a skeptic or are already executing marketing strategies with NFTs or in the metaverse, it pays to be engaged with an open mind.
Matt Wilburn is the president at Daz 3D, a leader in NFT strategy, marketing and full-stack development.
Daz is an NFT partner of iconic brands such as RTFKT (now Nike), Clinique, Coca-Cola, Champion and Warner Brothers, and in January it dropped Non-Fungible People, 8,888 PFPs featuring female, female-identifying and non-binary 3D avatars. Daz also runs one of the largest 3D creation platforms serving millions of professional and recreational artists worldwide.
Matt’s previous roles include senior marketing and executive leadership positions in public, private equity and VC-backed companies, including Yahoo!, Cricut, and IRI. He earned an MBA at Northwestern University and completed executive education programs in Blockchain and Artificial Intelligence at MIT.