What is an NFT?
Before exploring how you can use NFTs for your business, it is important to understand what they are. NFT stands for non-fungible token. As it is non-fungible, it means that there is no other value that can equate to it. For instance, if one were to try and trade the NFT, its value would not be equal to what it is being traded for, unlike Bitcoin or other cryptocurrency for example. This assures the individuality of the NFT as nothing equates to it.
Essentially, an NFT can be any digital asset and that asset can be tokenised. For example, like artwork.
NFTs are powered by blockchain technology. Simply, blockchains are decentralised ledgers that record the life of the digital asset in question. This means that there is a lot of information stored in one place. Each NFT is a unique token within the blockchain. The majority of NFTs are powered by a cryptocurrency blockchain, Ethereum. This is currently the most actively used blockchain.
Why are NFTs beneficial for business?
The value of NFTs for your business lie in the fact that it can be tokenised and is one-of-a-kind. So, this offers your business the opportunity to engage with its consumers and create a unique experience for them. The importance of the one-of-a-kind aspect ensures that audiences cannot get the same experience at another business as a result of the NFT and its individuality. This could almost act as a USP for your business because whilst there may be copies of any one asset made, NFTs ensure that only one person is able to own the original asset in question.
In recent times, the way that we value assets is constantly subject to change as a result of technology. Consequently, in the future NFTs could play a significant role in the digital scene. This belief stems from the headway that NFTs have made on the social media and digital world. Given this, investing in NFTs for your business could set you apart from competitors in years ahead as their popularity is predicted to surge.
Naturally, people feel compelled to send subconscious messages to others through our assets and what we physically possess. The act of owning any given asset adds value and status within society. People automatically assume a hierarchy based on what assets can be seen. Therefore, NFTs make a business seem validated and more appealing for the audience.
How are big brands using NFTs?
NFTs For Fashion Brands
Fashion brands are using NFTs to appeal to a broader audience. For instance, people are keen to invest in fashion in order to demonstrate status or to make a statement.
Many of these high-end, limited fashion items are expensive and therefore, NFTs provide consumers with an alternative to express their individuality through the brands.
NFTs mean that brands can create digital copies and exclusive models of their items that customers are able to purchase. This benefits both the producer and the consumer. The producer / brand attracts more custom to their business and the consumer is able to purchase an item from a brand which ordinarily they may not usually be able to. To use Net-A-Porter as an example, an NFT digital copy would be significantly cheaper and more accessible than a luxury handbag for instance.
NFTs For Food Brands
Fashion brands and other businesses also use NFTs to create desirable goods that can then be auctioned for charity. For example, Taco Bell designed and auctioned unique NFT GIFs with the profit going to the Live Más Scholarship. Some of these GIFs raised thousands of dollars in minutes. In this instance, Taco Bell was raising their profile whilst simultaneously supporting a cause that they genuinely care about. To build on this, other businesses may create competitions with NFTs as the prize incentive.
NFTs For Music
The exclusivity of NFTs encourages intrigue and generates incentive to purchase from businesses. The concept of exclusivity drove Kings of Leon to release their album ‘When You See Yourself’ in NFT form. The NFT album was only available for purchase for two weeks. This made their album truly a collectors’ item and therefore developed a loyal community and following for the band.
5 ways to use NFTs in your business
Some ideas on how to use NFTs in your business:
- Create GIFs – Use GIFs to stand out from your competition which cannot be copied.
- Limited Time Only – The exclusivity of NFTs, for example only allowing them to be purchased within a specific time frame, enables a community to be created surrounding the business.
- Charity / Competitions – Auction NFTs for charity / create competitions with NFTs as prizes: this generates incentive for people to buy your NFT. This creates awareness for the charity you’re supporting and raises the profile of your business.
- Entry Level Customers – Engage a larger audience: for instance, people may be able to buy NFT versions of your products in place of the more expensive physical items. This enables your customer base to grow and your business to expand.
- Drive Engagement – Your audience may see the NFTs you have created and be keener to interact with them. This will again generate more attention and engagement for your business.
If you are persuaded to get involved in the world of NFTs, then there are some things you will need:
- A digital wallet to store your NFTs and cryptocurrency.
- Crypto currency in order to purchase the NFTs.
- Find an NFT marketplace in order to purchase one such as OpenSea.
It is important to bear in mind that the value of an NFT is based upon what the buyer is willing to pay for it and so it is of course a risky business. However, is an investment ever exceptional without an element of risk?
In summary, an NFT is an individual and tokenised digital asset. The unique nature of the token offers the opportunity for your business to stand out and engage in a unique way with your audience. In turn, this will boost engagement and growth of your business.
If you are a business owner and are looking for ways for it to grow, get in touch using the form below. One of the team will happily discuss whether our digital marketing services could help you generate more business.