NFT disruption in the beauty industry
NFT stands for Non-Fungible Token; they are unique digital certificates that confirm ownership of a specific digital asset – digital data stored in a blockchain with unique codes and metadata that make it impossible to duplicate. Have it?
If you’re anything like me, this definition didn’t help your understanding of what an NFT is. The good news is that we are not alone. As NFTs enter mainstream culture, and brands across industries begin to incorporate them into their product lines and marketing efforts, the way NFTs are characterized and used is changing, all in an effort to make them more accessible and easier to understand to the masses.
Here’s a comparison that brought clarity to me: Bitcoin is a fungible token – if you exchange one bitcoin for another, and you have the same thing – the value is the same. Non-fungible tokens are not fungible because they are unique.
Consider baseball cards – they are not all valued equally. Players’ popularity along with distinctive images of them in certain eras of their careers creates the value of individual cards. (Think about the value of a Willie Mays card vs a Bucky Dent card). Regardless, the uniqueness of an NFT combined with the popularity of the subject can drive the value of an NFT.
So at the highest level, NFTs have so much value because they are unique, impossible to duplicate and can be highly individual. With that understanding, it begins to make sense why beauty—an industry that has always been about individualism and unique self-expression—would begin to play in the NFT space.
At first glance, bridging the gap between virtual and IRL seems like a challenge, especially in categories like beauty, where physical experiences and product results are supreme. But the beauty industry has already begun its push into NFTs, some in ways that feel familiar to us.
When Tik Tok took Clinique Almost Lipstick in Black Honey viral — an internet phenomenon many of us are quite familiar with — the ’90s retro shade completely sold out. To keep interest high, Clinique created a limited-edition digital version for its most cutting-edge followers. Just because consumers couldn’t get their hands on the popular shade didn’t mean they couldn’t take part in the viral explosion. The Black Honey NFT allowed consumers to be part of the cultural moment, regardless of whether they could find it in stores near them.
Clinique leveraged NFTs in a way that created low-risk consumer engagement, while brands like Nars have used them to drive collaboration. The brand commissioned three artists in 2021 to create an NFT inspired by the brand’s best-selling blush, Orgasm. Nars paired each NFT with a product that was available for purchase — a $50 version with limited add-on shades, and a $500 version that included a bundle of products of the same value. More than 2000 Orgasm NFTs were collected and the $500 version sold out in 10 minutes.
NFTs have come far and fast, entering the mainstream in ways that make them more accessible to those of us still wrapping our heads around the definition. In April 2022, Shopify-enabled No-code Web3 e-commerce platform Novel launched as the newest NFT channel for brands and retailers to reach the general public and provide loyalty benefits to consumers without writing code. This platform allows for ordering regular currency NFTs vs crypto – the latest brand to jump on board? Bobbi Brown’s Jones Road.
All this to say, the beauty industry has adopted NFTs in ways that seamlessly integrate the public’s interest and knowledge. Because in reality, the beauty of NFTs can be found in their usefulness; they create opportunities for brands to connect with consumers in ways that simply haven’t existed before, elevating consumer brand experiences and creating a new level of access for brand interaction. NFTs give brands a new opportunity to connect with their consumers in each brand’s equity, and in doing so are able to constantly evolve, connect and reimagine areas of the brand for the younger, digitally native, target markets .
There is certainly an education component to NFTs, and the more beauty brands dip their toe in the water, the more consumers will build familiarity and embrace brands that embrace NFTs. As technology continues to evolve, the beauty industry, ever an innovator, will no doubt continue to determine how NFTs can create meaning and purpose with consumers. The masses have yet to fully embrace NFTs in the same way that just twenty-or-so years ago, people weren’t buying fashion online as commonly as they are today. That will change.
Elenita (Elle) Morris is Senior Vice President of Global Strategy at Marks, part of SGS & Co., a brand experience agency that delivers global vision with local relevance in North America, Europe, Asia and beyond. She is a recognized consumer packaged goods thought leader in brand design with particular expertise in beauty, hair care and skin care. Follow Elle Morris on LinkedIn.
