Unless you’re living under a rock, you’ve probably heard about the digital evolution of art and asset ownership on the blockchain. Non-fungible tokens (NFTs) represent digital items traded online with cryptocurrency, usually encoded with the same software as many other cryptos. As a result, they are unique, not interchangeable, and scarce.
The NFT fever started in earnest in the year 2021. In 2020, the total value of NFT sales was $250 million, but the following year saw a drastic multiplication as the NFT market was valued at more than $41 billion, NFT statistics. In addition, many people are now purchasing NFTs as every month, up to 250,000 customers use OpenSea, the largest NFT marketplace, to trade NFTs. Today, many brands are joining the train and plunging into the NFT craze.
Of the top brands that have adopted NFTs, brands associated with the fashion industry like Adidas, Nike, and Asics have attained dominance. They are followed by brands in the food and beverage industry like Coca-cola, Pepsi, and Burger King. In addition, sports and automobile brands are also beginning to show interest in the industry.
Companies That Have Bought NFTs
With a profound announcement on Twitter, the multinational sportswear brand, Adidas, dipped its toes into the NFT industry, in 2021, with interests in three collections- Bored Ape Yacht Club (BAYC), Money, and PUNKS comic. Named “Into the Metaverse”, the first phase of Adidas Originals completely sold out over 9,000 units in December 2021. All 30,000 NFTs in the collection were minted within hours and cost 0.2 ETH each. In just one afternoon, the company made up to $23.4 million in sales. And as early as January 2022, Adidas and Prada teamed up to establish an NFT initiative on the Polygon network that would allow fans to submit their designs.
The Coca-Cola brand has positioned itself as one of the most collectible brands of all time, with a culture of joyful moments and friendship. In this same spirit of friendship, Coca-Cola announced the launch of its first set of NFTs on July 30, 2021 (World Friendship Day) called the “Friendship Loot Box” on Opensea. The loot box contains five items, and Coca-cola revealed that the highest bidder for the loot box would have a Coca-Cola refrigerator containing their products.
Samsung has demonstrated innovation in developing top-quality gadgets for many years, fostering customer loyalty and interest. This time around, the company innovates ways that NFTs can serve them. Samsung announced its extensive support for NFTs in their new TV lineup– A smart calibration feature on Samsung TVs will automatically modify display settings to preserve the creator’s preset display values, thereby keeping the original image quality. The company had this to say about its interest in NFTs: “With demand for NFTs on the rise, the need for a solution to today’s fragmented viewing and purchasing landscape has never been greater.” In 2022, Samsung is introducing the world’s first TV screen-based NFT explorer and marketplace aggregator, a groundbreaking platform that lets you browse, purchase, and display your favorite art– all in one place.”
The Italian company, undergoing a major transition to hybrid and electric sports vehicles, announced its space-themed NFT collection. The company created the collection in collaboration with NFT PRO, an enterprise NFT solution that has already worked with well-known companies such as Adidas, Sotheby's, and Juventus football club to bring NFT integration to the market. It features five special space-themed digital artworks from an artist who has yet to be revealed.
National Basketball Association (NBA)
The National Basketball Association is not left out on the list of companies meeting their offerings with NFTs for a more customer-centric approach. 'NBA Top Shot,' a new online marketplace of licensed digital collectibles where fans can buy moments from their favorite teams, players, or matches in exchange for a certificate and an original clip, was launched. Pack drops are used to distribute moments once they have been minted. The standard set costs $9, with more expensive exclusive packs containing higher-tiered cards.
In November 2021, McDonald's offered a limited edition of 10 McRib NFTs in the US to commemorate McRib's 40th anniversary. McDonald's launched its first-ever NFT promotion to honor the return of the fast-food chain's limited-edition McRib to its menu. Only customers that retweeted the brand's invitation were eligible for the collection of ten separate McRib NFTs, which more than 21,000 individuals accomplished in just a few hours and approximately 93,000 by the start of 2022, McDonald's Twitter Post.
Some other brands that have ventured into NFTs include Taco Bell, Gucci, Pringles, Nike, Louis Vuitton, Dolce & Gabbana and Burger King. As these brands get into the NFT space, they don’t mind spending millions in minting and marketing to achieve their desired results. For instance, $156,000 was spent on a digital work of art; this leads to a big why, as addressed below:
Why Are Companies Getting Into NFTs?
It Creates Value
To answer the question “Why are big Brands interested in NFTs?” Attorney Tal Lifshitz, a partner and co-chair of Kozyak Tropin & Throckmorton, explained that “It’s trendy, it’s fun, and it’s cutting edge technology that has the potential to redefine the way these brands do business and engage with their consumers." He went on to add, “Increased adoption means exponentially increased value and utility.” Explaining this, he illustrated that the value attached when just one person owns a phone differs from when two people own phones, and this is equally different from when millions of people do. Therefore, the mass adoption of NFTs is a testament to the value of NFTs and increases this said value.
It Is A Trend
Businesses thrive on trends, and this is no exception. A good strategy for company growth is to listen for signals and trends, showing customer behavior towards their goods or services. The world is constantly evolving, and user interests or engagement preferences may change with time. Businesses ought to go where their customers go and continually feed their interests and improve their experiences. Dr. Dustin York, an associate professor of communication at Maryville University, had this in mind when he said: "When customers gravitated toward malls, brands followed. When customers gravitated toward e-commerce, brands followed. And when customers are now gravitating toward Web 3.0, digitally native brands are following, giving even more legitimacy to NFTs."
It Is Another Source of Revenue
The new technology is a great way to boost customer engagement and company earnings. Many brands have leveraged scarcity for a competitive advantage in cost or value over the years. NFTs stand as another way for companies to communicate this and increase customer participation in their offerings.
It Is The Future
Companies are already using NFTs to raise awareness and strengthen consumer relationships. But more to this, whether in a metaverse or just on screens, the digital world in the future and NFTs will be very present for brands. Brands are looking to utilize NFTs in transforming advertisement by eliminating the drab traditional methods of advert placement and replacing them with assets that capture unique brand-consumer ties.
The possibilities that come along with NFTs are endless and, for now, yet to be seen. The NFT industry is still at an early stage, and with many investors and brands getting in for a piece of the cake, the industry is sure to last a long time. Nevertheless, brands are positioning themselves for the greater opportunities that lie just ahead.