Beauty brands are being tipped to join the non-fungible token (NFT) bandwagon to forge closer bonds with their most loyal customers, something that is becoming increasingly difficult to do today, according to a Web 3 expert.
NFTs are digital assets that are certified and traded on a blockchain. The underlying concept of NFTs is the proof of ownership of something irreplicable. In other words, NFTs “verify that something is authentic and scarce,” said Brent Annells, chief marketing officer at Smart Token Labs, a Web3 tech firm.
Smart Token Labs recently supported Swiss luxury skin care brand La Prairie’s with its first NFT drop in collaboration with digital artist Carla Chan.
Annells explained that brands like La Prairie have begun to explore the NFTs as a means of reaching out to their consumer base.
“We’re coming into this phase of NFT 2.0. So far, it’s been about profile pictures and generative art around them and that has created new communities and built some brands out of it. Out of a thousand NFT projects, there will be a handful that emerge as brands that have got real communities around them – like Bored Ape Yacht Club.
“I think the second wave is sort of like the intersection between much more mainstream brands doing things with the tech. And I think at the heart of it, they're going to use the tech to get closer to their customers.”
The reality is that it is getting more challenging for brands to reach out and engage their consumer. For instance, things like Facebook or Instagram advertising are getting more expensive, and brands must compete with hundreds, if not thousands, of other brands vying for the consumers’ limited attention.
“Having that connection to your customers is getting harder and harder all the time. The problem for brands is that their connection points to their customers are through these centralised points. So other platforms sort of own all the mindshare and timeshare with their customers,” said Annells.
Brands can use NFT technology to enable exclusive perks to reinforce that connection with their “super fans”.
“Brands will enable surprise and delight experiences – stuff they would do for loyalty and reward programmes, but things that are quite amazing for their most rabid fans,” said Annells.
In the case of La Prairie, it collaborated with Chan to release Space Beyond. The collection consists of 365 + 1 editions of unique, forever-changing artworks generated in real-time with weather and demographic data. Each artwork represents a day in the year of the 31 most populated cities across the globe.
What is critical is brands must stay true to themselves, said Annells. He advised that brands should not dabble in NFTs just for the sake of it or go after an audience that is outside of their consumer base.
“The mistake potentially is when you go outside of where you already are. The smart players think about how NFTs can enable something amazing for their own customers, current brand ambassadors, and current brand custodians and build out from there.
“The mistake is you try and do something you’re not. If you suddenly jump into the middle of a crypto native community that you don’t have any real connection to and just impose your brand, it’s kind of like the parent turning up at the school disco – it’s just not cool.”
A possible future
As this technology evolves, Annells that these tokens could determine how consumers interact with brands.
“What’s going to happen through time – and we’re still seeing all of these play out so its not totally clear how it’s going to play out – but part of our belief is that everybody is going to have a digital wallet, and it's going to be full of tokens. Through time, these tokens are almost going to become like reverse cookies.
“They express who you are, what you've own, what rights and permissions you have, and how you're willing to interact with brands. So, if you as a brand, are able to create something for a customer that already has an affinity to your brand - and that's in their wallet, then suddenly you've got a completely new touchpoint to them.”
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