When Non-Fungible Tokens (NFTs) were first introduced to the market, everyone was confused. However, everyone was also intrigued, which was why no matter what NFTs were launched, they could rake in money. Singaporean influencer Irene Zhao and Indonesian student Sultan Gustaf Al Ghozali earned $7.5 million and $1 million respectively by converting their selfies into NFTs. As the market started to cool down, many NFT owners soon realised that the NFTs they bought had essentially zero value. However, that doesn’t make NFTs a passing trend.

As international brands such as Nike and Dolce & Gabbana began to venture into the NFT market, NFT expert, Mi Li, believes that NFTs is the next marketing tool that businesses have to wield. 

Mi Li is the head of AX Studio, a brand of Singapore-based tech unicorn, Advance Intelligence Group, which supports potential brand partners entering the NFT and Web3.0 space.

From a mere collectible to next best marketing tool 

Nike, Dolce & Gabbana and Tiffany & Co are prime examples of the effectiveness of NFTs. In the first two quarter of 2022, Nike generated a total of $185 million in revenue from its NFT collections, while Tiffany & Co had made over $12 million profits in just 74 transactions. Even local brands, such as IUIGA and Love, Bonito, have tapped into the potential of NFTs. Love, Bonito is one of the pioneers to incorporate NFTs in their marketing campaigns.

However, unlike the first wave of NFTs, they are not just sold as a collectibles. Instead, brands are utilising NFTs to spread and reinforce their brand awareness. 

6IXTY8IGHT and IUIGA are two of the brands that AX Studio are assisting in the Web3.0 world.

6IXTY8IGHT created bunny characters in an NFT format to refresh their brand. There are three main characters — a cool bunny, a sexy bunny, and a cute bunny — to cater to women of different personalities. Revamping their brand with NFT avatars increase engagement with the younger generation, which is their main demographic. 6IXTY8IGHT also wanted to use their new branding to empower younger women to express themselves freely.

“Women are under the constant pressure to look nice [and] to look pretty. But under the NFT theme, there is a free way to showcase themselves, no matter what kind of body, or look they may have.”

Mi Li

NFT isn’t just a digital ownership. When it comes to developing a stronger brand affinity, you can consider NFTs a special pass for consumers to be part of an exclusive community. This creates a two-way communication between the brand and its consumers.

You don’t want to be the last brand to catch this trend

Some may wonder if NFTs will limit the reach of their branding campaign. Not only do most NFT marketplaces require cryptocurrency to purchase, the majority of people interested in NFTs are Gen Z, followed by millennials, according to Colormatics. However, according to AX Studio, global statistics reflected a steady increase of NFT adopters. They are no longer a tiny community.

“Everybody wants to have a unique identity so that they can freely express themselves, and this is not something they can easily do in the physical world, especially since COVID started, and people lose the human touch and connections. They are looking for another experience, potentially in the Web3.0 World. They can have their own identities and actually also have the connections with other people, who are like-minded with them. So that’s how the NFT trend started among younger people.”

Mi Li

Mi Li likened NFTs to e-commerce when it was first introduced in the early 2000s. What was the point of online shopping, when everything could be achieved in the physical world? However, time has proven that there is a need for businesses to be forward-looking and adapt quickly in our ever-changing world. 

Even the Brand Director of Gucci, according to Mi Li, said that there was a need to adopt NFTs at this stage, despite their little knowledge of it. Even if brands do not have the best formula to fully leverage on NFTs, they should take the time to experiment and learn before it’s too late.

Brands, especially traditional brands, need to stay current and continue to engage with the younger generation. Consumers who are NFT-savvy may not take up the majority of their consumer base for now. However, behaviours and interests shift quickly. You don’t want to be the last brand to adopt NFTs.

Aside from branding, how else can other brands use NFTs?

Home and living brand IUIGA leverages on NFTs differently, using NFTs to mainly increase their product sales directly.

When you spend a certain amount at IUIGA, you will receive one Tier-1 NFT. Once you collect up to three of those, you can exchange them for one Tier-2 NFT, which provides you with true utility values including product discounts, giveaways and long-term benefits. More specifications are on IUIGA’s official website.

Photo: IUIGA

During their anniversary sales, their orders hiked up by 2.8x times compared to their average week. The website traffic also increased by 300%. proving that there is indeed a high interest and demand for NFTs, and its effectiveness in increasing revenue.

NFTs can also be designed into virtual products. For example, 6IXTY8IGHT can design the next collection of NFTs as virtual lingerie. Owners of the virtual lingerie are also entitled to claim the physical version from their stores. It also acts a membership pass which will provide them with perks beyond the physical products. For more updates on 6IXTY8IGHT’s NFT campaigns, you can follow their Twitter or join their Discord channel.

Factors that differentiate good from bad NFTs

“No matter what you launch, you can gain some money,” she said as she recalled market’s reaction when NFTs were first introduced.

However, once the market cooled down, the prices of NFTs dropped. People were beginning to realise that there was no utility value of the first-wave NFTs. That’s one of the two factors that determines the value of NFTs.

Claiming physical products, giveaway tickets, or discounts, are some real-life utility that valuable NFTs can provide. Web3.0 users might also consider its virtual benefits, such as gateways to virtual events such as fashion shows and concerts in the metaverse.

Secondly, users should take note if NFT creators provide a road map for their projects. The roadmap provides information on future initiatives and their potential benefits, which is a good indicator that the creators plan to build a sustainable NFT community that continues to engage with their members, instead of a pump-and-dump initiative to make quick cash.

Photo: IUIGA

While blockchain may sound like an intimidating field to venture into, Mi Li said that said that the concept was easy to follow. She also started her NFT from YouTube videos and Twitter, the main social media for discussions on the crypto market.

For anyone who wish to learn more purchasing NFTs, she recommends starting from YouTube videos to have a basic understanding of the Web3.0 world and how it functions, before joining crypto communities on Twitter.

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