Image source @ Visual China
The article | CBNData consumption station, the author | Li Zihui, and the editor | Zhong Rui
If you want to become a virtual clothing blogger, you only need to place an order in the official store, send your own photos as required, wait for the official website production staff to return the picture by rendering the composite receipt, you can post the dress photo of the virtual costume on social media, and get a global limited edition of the virtual fashion with a unique number priced at 99 yuan-5999 yuan.
On Little Red Book, these virtual fashions are linked to an account that has been open for 3 months@R-Space Labs, which serves as the official voice channel for Little Red Book on digital collections, not only regularly updates the latest sales plans of digital collections, but also provides scientific popularization of digital collections and related original artists and works of cooperation from time to time.
Image source @ Little Red Book screenshot
In fact, in the past year, the NFT industry, with digital collections as one of its main forms, has not only attracted apparel brands. Brands in the fields of fashion play, beauty, food and other fields have also extended their tentacles to various forms of NFT marketing in order to follow up the new context of brand marketing in the digital age.
However, can NFTs really find a new growth curve for brands under Web 3.0? How can brands use NFTs to achieve innovative marketing purposes? This article will focus on the extensible value of NFTs in the brand dimension and explore the core appeals of the current brand layout NFTs.
The NFT industry has set off a global financing fever, and the multi-dimensional play has attracted consumer brands
A research report released by Guosen Securities in March 2022 defines NFTs. The report notes that NFTs, whose full name is Non-Fungible Token (non-homogeneous token), are the only cryptocurrency tokens used to represent digital assets, including pictures, audio, and video, that can be bought and sold.
To put it simply, NFT is a non-standard certificate of artwork/copyright/digital artwork, etc., is a string of computer code, and the purchase of NFT does not obtain the physical object itself, and the online virtual property right of the artwork is owned.
Abroad, NFT trading has evolved into a new way of investing. According to the above research report data, in 2021, the global NFT trading volume exceeded $17.6 billion, an increase of 20 times over the previous year. Among them, on the overseas integrated NFT trading platform Opensea, the trading volume in February 2022 alone reached $4.9 billion.
Such a hot track naturally attracts the attention of capital. Judging from the financing situation of the NFT market so far in 2022, NFT art development, NFT games and brand NFT marketing are the most favored application directions of capital at present.
In China, social media and Internet platforms such as Xiaohongshu, Weibo, Tencent, Baidu, Alibaba and other social media and Internet platforms have taken a fancy to the economic value behind the digital collection, and have successively launched NFT production and art development platforms such as Whale Detective, Magic Core, Pill Card, meta-vision, etc., and jointly issued NFT digital collections by brands such as ANTA and Nature Hall and artists, which were sold or gifted through the platform.
However, with the growth of domestic and foreign NFT companies and platforms, the further upgrading of technical means provides more diversified NFT play, and also hopes to attract young consumer brands to start innovative play, trying to find the most suitable way for brands and NFTs to further promote the digital upgrading of brand equity and marketing methods.
The three major value scenarios of brand NFTs: digital assets, marketing empowerment and private domain management
Judging from the current way of brand NFT marketing, NFTs mainly have three major value scenarios for brands.
The first is to achieve the purpose of digital upgrading of the brand, based on digital IP and blockchain technology, combined with brand attributes, characteristics and brand elements to create NFT products. Its purpose is more inclined to transform brand value into computable and appreciative assets through NFTs, and realize the digital assetization of brand value.
For this purpose, cross-border joint launch of digital collections with brand attributes and elements is the most common application direction. For example, LVMH's high-end cosmetics brand Guerlain recently launched the "Reaverse" project, which sold 1828 "virtual bees" as NFTs to support the rewilding project in the Vallée de la Millière Nature Reserve in France; beauty brand M.A.C. recently partnered with the Keith Haring Foundation to combine lipstick animation illustrations with Keith Haring's iconic artwork to launch the brand's first NFT collection L'Oréal Paris also teamed up with five renowned artists to create NFT artwork for the new lipstick Reds of Worth last December.
Guerlain Virtual Bee Image source @Objkt.com
These NFT digital collections are divided into prices and quantities according to different rarity levels at the beginning of the release to reinforce the rarity value behind NFTs. For example, Guerlain's "virtual bees" set up 8 super rare, 20 rare, 500 fairly rare and 1300 ordinary, respectively, with prices ranging from 70 to 890 euros (about 491 to 6251 yuan).
The second is to create an NFT product line that can bring economic benefits based on the marketing empowerment, anti-counterfeiting and value-added effects of the product side. Because NFTs can give products the attribute of "uniqueness", NFT-based products can break the homogeneous competition of products under mass production, match consumer preferences from multiple dimensions and carry out more refined customization, so they can give products a new value system.
In April this year, Look Labs launched the world's first "digital perfume" borrowed from blockchain technology, where consumers can get a fragrance NFT digital certificate and a bottle of solid perfume after successful bidding for NFT perfume. Among them, NFT perfumes are encoded by spectral data, and in the future, they can rely on technology to "reproduce" the fragrance.
Sports brands also prefer NFTs to be marketable.
Take Nike, for example, which has become a hot star brand in the "shoe world" in the past few years, and a part of the brand's audience has developed the habit of paying for "rarity" and has a high acceptance of NFT products with "uniqueness". At the end of last year, Nike spent nearly $200 million to acquire virtual sneaker RTFKT, which sold more than 600 pairs of NFT sneakers in 7 minutes, with an average price of 170,000 yuan per shoe, a hundred times the price of high-end Nike shoes, according to the New York Times.
Image source @ Sina Fashion Weibo
The third is to help brands achieve more sticky and circle value of social marketing, private domain marketing and potential "virtual" user management. It is embodied in empowering users with new product experience and purchase permission privileges through NFTs, and relying on NFTs to build new brand circles and communities.
On the one hand, brands build a traceable membership system by selling special NFT products to help brands achieve customer relationship management and improve user stickiness. No matter what channel consumers buy products from, brands can establish long-term relationships with users through the NFT behind the products, and provide consumers with various exclusive rights and interests in a targeted manner.
For example, at the beginning of this year, the Japanese tide brand Ambush put it in POW! The jewelry collection was created as a 2022 NFT product, and announced that the series of NFT products will be used as membership vouchers, providing the holder with priority participation in subsequent brand online and offline activities, and the entire series is sold out within 5 minutes of launch; Coca-Cola's Christmas Snowflake Ball NFT released in the form of a blind box, buyers can get follow-up consumption discounts and participate in special events.
On the other hand, based on the virtual space where the NFT can be extended, brands can also achieve community operations by distributing NFT products in a virtual space exclusive to the brand. As the exclusive beauty brand partner of the virtual world Decentraland Fashion Week, Estée Lauder recently distributed 10,000 wearable NFT products to users for free, and created a virtual space inspired by the "small brown bottle bottle body" to provide users with a new avatar.
In addition, some brands are also preparing to promote NFT-based brand marketing. For example, McDonald's is trying to link the NFT virtual space with the real space to build a restaurant that provides both real and virtual goods. In addition to the possibility of extending brand awareness from the real world to the virtual world, the restaurant also has the opportunity to provide other brands with the opportunity to advertise in the virtual space in the future, thus providing more brands with virtual goods and services that can be delivered in the physical field.
How to measure the value benefit of NFTs to brands?
Since the beginning of the NFT in 2021, NFTs have gradually moved from a niche concept of secondary market speculation to a broader field of brand marketing. U.S. investment bank Morgan Stanley recognized the potential value of NFTs in a research report that pointed out that the current many attempts of brands in the field of NFTs and social games have helped them to open up new customer groups and understand new markets. However, the current brand is still in the NFT proof-of-concept stage, and as more and more tests are successful, the next stage is to consider how to monetize through NFT marketing.
Based on the available data, the easier dimension to measure is the profit from the sale of a brand's NFT products. Compared to other tracks that are still in the NFT concept marketing, the sports brand is "the first to eat crabs".
Its value benefits are mainly reflected in the high revenue brought about by the sales of NFT products. For example, in December last year, Adida launched the "Into themetaverse" series of NFT works, each for $800 (about 5,000 yuan), sold nearly 30,000 pieces a few hours later, earning more than $22 million; sports brand ASICS ASICS launched nine NFT sneakers with an average price of between $880 and $1,400 on the NFT auction site OpenSea last year. The price of the brand's ordinary running shoes is about $100-$200.
The source @Binance IGO
In addition, the NFT collection, which combines artistic dimensions in the luxury industry, also innovates the highest value of the goods auction for the brand. Last year, for example, Gucci auctioned a 4-minute NFT short film, Gucci Aria NFT, at Christie's, which sold for $25,000, making it one of the most expensive items sold by the brand.
Another layer of value benefits is reflected in the impact on brand voice and brand image.
British designer brand Roksanda has revealed that when the brand created the NFT with the Digital Fashion Institute during London Fashion Week, the search volume for the brand on the British e-commerce site Lyst increased by 76%; similarly, when italian fashion brand Diesel announced at Milan Fashion Week that it would release NFTs outside of physical clothing, the brand's search volume also increased by 41%.
High exposure in a short period of time can also lead to considerable sales conversions. The digital collection gift box launched by Jiang Xiaobai and Tmall was simultaneously bound to Jiang Xiaobai's two special edition liquors of 40 degrees and 52 degrees at the time of release. On the day of the NFT's release, Jiang Xiaobai's daily sales exceeded 16 times of daily sales, the number of visitors in a single day exceeded that of daily by 3 times, and the conversion of brand sales also exceeded 10 times that of daily sales.
In addition, in some areas, NFTs have become a way for brands to raise funds for social causes and organize community activities, and by regularly releasing NFT projects, brands can raise funds in a richer form to devote themselves to social welfare and charity, thereby enhancing the brand's social image and public favorability.
A typical example is the NFT project Rare Pizzas, created by the charity Pizza DAO team, which created 10,000 baked pizza NFTs in 2021 in collaboration with more than 300 artists from around the world, and at a specific point in time, the proceeds from NFT sales in the project are used to buy free pizzas for people around the world. The organization has also made the concept an annual event; Chamin, a tissue brand owned by Procter & Gamble, has launched five pieces of NFT artwork, the proceeds of which were donated to the humanitarian aid charity Direct Relief.
However, for now, although brands in various fields are laying out NFT marketing, the feedback received is actually different. In the food sector, for example, NFTs are still biased towards a marketing concept that is difficult to implement. The reason for this is largely due to the fact that the food category emphasizes the user's sense of experience in terms of smell and taste, and in the case that this technical problem has not yet been overcome, the NFT marketing of food-related brands can only be limited to the basic gameplay of building brand-related digital collections, and it is difficult to form competitiveness in the increasingly large digital collection market.
The source of the figure is @foodbev
On the other hand, the digital copyright protection of NFTs is also becoming a new issue in the development of the industry. In February this year, Nike sued the overseas second-hand e-commerce platform StockX, saying that it used Nike shoe images without authorization to make them into NFTs for sale, but StockX responded that because NFTs are not virtual products or digital sneakers, but proof of ownership of physical goods stored in its vault, Nike's claims lack basis.
As of now, there has been no penalty result in the case, but this also gives a wake-up call to brands that want to continue to lay out NFT marketing. Especially in the Chinese market, due to the regulatory restrictions on the transaction of the NFT secondary market, unlike some business models in overseas markets, the development path of NFTs in China is more from copyright protection and asset confirmation to explore the development path of no motif. Based on this as a benchmark, if domestic consumer brands want to achieve substantial profit growth or brand voice improvement through NFTs, they also need to explore more diversified and compliant NFT marketing methods.