NFT Boom: How Retail Can Turn Digital Assets Into a Gold Rush
It feels like the ongoing non-fungible token (NFT) boom has touched every industry. Whether it’s in the auto, real estate, media, retail, sports or entertainment sector, brands of all types are racing to join the NFT party. Where NFTs fit in sports or gaming is fairly intuitive, as those industries have long cherished collectibles and memorabilia. The rising prevalence of NFTs in retail hasn't been as natural in comparison, but that doesn’t mean retailers and brands should avoid standing up a NFT campaign of their own.
At this point, NFT strategies in retail have mostly been experimental — one-off test runs intended to get a better understanding of the landscape. Look at Crockpot, which last year auctioned off the brand’s first NFT — a GIF of the product’s evolution, to celebrate its 50th anniversary. Or Adidas, which entered the metaverse by purchasing a Bored Ape Yacht Club token back in December. Despite being in its early stages, there are already clear benefits to developing a sustainable NFT program. Retailers and brands should consider the following before scoffing at a serious NFT proposal.
Supplying New Data Sources
In the post-cookie world, every marketing campaign must ensure there are actionable customer insights that can be pulled from the final results. NFTs are such powerful marketing tools because they help create online communities that encourage data-yielding behavior. NFTs have truly unlocked new ways for brands to drive digital customer engagement. Every interaction, whether it’s a customer registering for a giveaway or searching through a brand’s portfolio, presents a score of opportunities for retailers and brands to collect first-party data with NFTs.
When retailers enter the NFT market, they do so knowing that it builds first-party connections that can later be leveraged for other campaigns. Furthermore, NFTs are unique because they offer the first real glimpse into customer behavior in the metaverse. With the metaverse market expected to increase at a rate of 13.1 percent a year from 2020 to 2024, according to an estimate from Bloomberg Intelligence, it would not hurt for retail to get a taste of what's to come in this new, somewhat mind-blowing setting. For NFTs, the market has significant room for growth, and there's a mountain of data waiting to be mined.
Enriching Loyalty Programs
NFTs come in many forms at a wide range of costs. Many legacy brands have leveraged their names and reputations through NFT initiatives to make some quick bucks. While these campaigns are sure to make life-long customers out of the 50 or so people who can afford to participate, they're not the extent to which retail can make use of NFTS. Many of the NFT pioneers in retail have created contests to drive engagement, but in the years to come, there's an easy-to-see path where NFTs can be used to incentivize customers to become loyal to specific retailers.
Since the COVID-19 pandemic, retail no longer takes returning customers for granted, which explains why so many retailers and brands have prioritized their customer loyalty programs. The creative rewards and perks that retail can offer only reflect the analytics-first mindset that has taken over a lot of marketing departments. That backdrop alone reveals why retail is primed for NFT growth. With consumers actively seeking out NFTs, retailers can significantly boost their loyalty offerings by creating and rewarding customers with their own tokens.
Enhancing CX Touchpoints
While there’s no denying the NFT bonanza may be slowing down in terms of consumer demand, there's also little to suggest that the audience for it has peaked. With one-of-a-kind tokens that collectors can showcase in the metaverse, NFTs have become desirable assets whose value will only grow as the metaverse expands and adoption strengthens. With today’s customer journey involving more touchpoints across multiple channels, retailers cannot afford to have gaps in their customer experience (CX) spectrums. By investing in NFTs, retailers and brands can ensure they have, at the very least, a seat at the table when a large enough part of the economy moves over to the metaverse.
NFTs’ role in retail is no foregone conclusion. Nobody could have predicted retailers would start selling NFTs, and yet here we are. Selfridges recently announced it's selling NFTs in-store, bringing digital goods to real-life shopping for the first time. What the retail industry knows now is that NFTs are effective tools to activate customers and encourage continued engagement that only feeds that data flywheel. After that, retail brands just need to have the proper technology stack in place to handle and ingest this new type of data.
Tom Treanor is chief marketing officer at Treasure Data, an enterprise customer data platform.