NFT: A new tool to increase customer loyalty
Marketers need a way to meet customers where they are. Increasingly, in virtual worlds, where NFTs and metaverse campaigns can raise awareness, boost sales and build loyalty, stocks Preston Woo, CFO and Head of Strategy for Tafi and Daz 3D.
Brands are still adapting to rapid changes in consumer expectations and buying habits that were already evolving but accelerated during the COVID-19 pandemic. The most successful companies in recent years were those that quickly responded to changes in how customers learn about and buy products. Now brands are looking at new ways to meet customers where they are, including in virtual spaces.
To increase brand awareness, build customer trust, inspire customer loyalty and increase sales, many top brands are leveraging augmented reality (AR) and NFTs. Other brands tap into the creativity of their superfans to develop unique messages and memorable consumer experiences. Along the way, marketers need new skills to stay ahead as the metaverse gains more mainstream traction.
The current situation is analogous to the evolution of brand marketing that was experienced with the advent of the internet, as well as when mobile apps became ubiquitous. Big brands are establishing themselves in the metaverse, which means it’s a good idea for marketers working with brands of all sizes to stay up-to-date on how the industry is evolving. Here’s a closer look.
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Using avatars and NFTs to communicate values and deepen relationships
People want to do business with companies that share their values. Diversity and inclusion are core values for the best beauty brand Clinique. The company recently collaborated with artists, such as Sheika Daley and Emira D’Spain, on a NFT collection which celebrates “the beauty of all skin everywhere,” including the metaverse. The brand has also partnered with Daz 3D on their mission to make the metaverse more inclusive. Clinique’s avatar project communicates the company’s values while appealing to consumers who share their ideals.
Top sportswear company, Championfostered brand trust and loyalty by launching a line of apparel and accessory NFTs for brand superfans to wear in the metaverse, including branded hoodies and sweatshirts. Coca Cola, one of the most recognizable brands in the world, collaborated with top device maker Samsung and our team at Daz on a series of augmented reality avatars and digital clothing projects. The branded apparel is available to customers exclusively on the Samsung Galaxy AR Emoji Marketplace.
NFTs are a unique marketing tool because they give consumers a way to connect with the brand while maintaining the brand’s control of assets through blockchain technology. As brands like RTFKT, a leading creator of virtual sneakers, collectibles and experiences, has shown that companies can give fans license to interpret the brand by creating memorable digital objects. Meanwhile, marketers continue to learn valuable skills through experimentation in the virtual world.
Brands using virtual reality to drive sales in the real world
Building communities of belonging is of course nothing new. Brands have been doing it in the analogue world for generations – the Mickey Mouse club in the early days of television is just one example. A fan community that Pearl Jam 10 Club is another — the popular band uses analog and digital club memberships to connect with fans and provide access to exclusive content.
Now brands are using NFTs in a similar way, and it’s driving sales in the real world. A recent one The Wall Street Journal the article outlined the scope of the opportunity, noting that a McKinsey study estimates that metaverse spending will reach $5 trillion by 2030. The overwhelming majority of consumers surveyed, 79%, say they have already made a metaverse purchase. About 47% of those people said they made in-game purchases, and 37% said they bought virtual cosmetic items. About 33% also said they bought real-world items offered for sale in the metaverse.
Executives surveyed told McKinsey they expect the metaverse to be good for their industry within five to ten years; 95% believe it will affect them positively. About 25% expect metaverse to drive 15% of their total margin growth in five years. The article indicates that brands that have taken the plunge, including fashion label Forever 21, have reaped the benefits of building greater brand awareness in virtual reality (VR) communities such as Roblox and seen an increase in sales of virtually marketed clothing.
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New skills for a new era
Many marketers are understandably hesitant to invest in metaverse marketing since virtual reality is not yet fully mainstream. But consumer acceptance of virtual worlds, digital identities and related accessories is growing, especially among younger customers. This is why big brands are eager to establish a presence now, as they did when the internet and apps emerged in earlier eras.
Now is the perfect time for brands to expand their comfort zone and test new ways to connect with customers. Brand marketers just starting out in the space can work with a partner with experience and knowledge of the metaverse to execute a successful NFT marketing strategy. It’s a great way for brand managers to explore virtual reality marketing opportunities, including cross-over campaigns that combine traditional and metaverse-based marketing campaigns.
At a minimum, marketers should keep an eye on how marketing in the metaverse is developing and consider opportunities to use digital assets such as NFTs. The metaverse is changing rapidly, but the underlying technology, including blockchain, is uniquely suited to help brands maintain control while unleashing creativity to reach customers where they are.
How are you adapting your marketing strategies to connect with customers in the NFT era? Share with us on Facebook, Twitterand LinkedIn.
