NFTs are all the rage in certain circles of celebrities, artists, collectors, investors, and gamers. An offshoot of cryptocurrencies, Non-Fungible Tokens (NFTs) are digital assets made up of code stored in a digital ledger using blockchain technology. NFTs are used to verify ownership of both digital and real-world items, such as artworks, music, videos, and other collectibles that are seen to have inherent value.
Many examples of high-value NFTs that exist only virtually are found in digital art, with many fetching ridiculously high sums. An NFT of the first tweet of Twitter founder Jack Dorsey initially sold for $2.9 million and is currently listed for sale. In sum, an NFT works as a deed of sale; the buyer is awarded full rights to the so-called ‘master copy’ of that particular artwork or image in the same manner as a physical commodity.
NFTs are stand-alone digital items that cannot be duplicated and used in multiple transactions at the same time. But when an NFT is linked to a real-world asset, such as a painting, piece of real estate, or a pair of diamond earrings, the NFT is known as a “digital twin.” This serves the purpose of authenticating the real-world asset with a record of the asset’s provenance and ownership.
The unique data of NFTs, secured on blockchain ledger technology, make it easy to verify its ownership and transfer tokens between owners. Each NFT contains identification codes and metadata stored on the blockchain which distinguishes one from the other.
Although most NFT tokens are held or stored on the Ethereum blockchain, the leading blockchain technology platform, several other blockchains also support NFTs. NFTs are minted or created at a cost to the creator on NFT marketplaces or other platforms such as the more advanced gaming sites. NFTs are available for purchase in digital commerce spaces like NFT marketplaces and gaming platforms. Most NFTs require payment in Ethereum or other blockchain currency which are held in a crypto wallet.
In the retail and e-commerce space, many consumer brands across sectors like beauty, apparel, and luxury goods have jumped on the NFT bandwagon, using digital assets to forge new marketing channels, find new audiences, or engage loyal customers.
As part of their marketing strategies, many brands use NFTs to support a new product launch, for example, or build buzz when a brand-related NFT is auctioned off to benefit a social cause or charity. Some brands go as far as making charitable donations or partnering with sustainability platforms to offset the carbon footprint of generating their NFTs.
Here’s a look at how brands are applying NFTs:
Last year, Nike debuted Nikeland on the gaming platform Roblox, where gamers play either pre-built games or create their own. They can even dress their avatars with Nike-branded shoes and apparel purchased from Nikeland’s virtual shop.
Signaling its move into the metaverse, Nike acquired RTFKT, a virtual footwear and fashion company, and plans many more virtual product rollouts. This year, the brand filed trademark applications for not only “downloadable virtual goods” in online realms but also in relation to the physical spaces of retail stores.
Beauty brands such as L’Oréal Paris, Givenchy Parfum, and Australian skin-care brand Sunny Skin have all come out with their own NFTs, approaching them in various ways. E.l.f. Cosmetics offered a limited range of crypto-collectibles based on four of its most popular products, complete with certificates of authenticity and ownership, sold at like prices to their physical counterparts.
NFT players like blockchain marketplaces and gaming platforms are exploding with partnerships between everyone from brands, retailers, and record labels to digital creators, sports figures, and celebrities getting into the act. Luxury brand Gucci launched into the NFT world in partnership with AR fashion platform Wanna to sell its $12 Gucci NFT sneakers.
Both Adidas and Nike are muscling in to dominate the metaverse sneakers and digital wearables market, while American fashion brand Ralph Lauren has also recently opened a digital store on Roblox.
Sandbox uses the Ethereum blockchain to track ownership of NFT assets and digital land on its software, and like all NFT assets, the buyer retains ownership until the asset is sold. Last year, within the Sandbox domain, an advanced Web 3.0 gaming metaverse, Snoop Dogg launched his own Snoopverse, with exclusive NFT offerings to gamers: one collector even bought a piece of digital land next to Snoop Dogg for $450,000. Sandbox has inked more than 200 partnerships, including with brands like Adidas and Atari.
Brands are getting “phygital” with experiences that combine the digital with real-world products or shopping in physical stores, and some involve NFTs. For merchants that sell high volumes, those on the Shopify Plus e-commerce platform can join the company’s beta launch to sell NFTs online via the Ethereum and Flow platforms. Shopify encourages merchants to experiment with NFTs which adds a digital layer to their physical offering.
One such participant is Web 3.0 fashion house Cult & Rain. The brand launched its animated NFT Genesis collection concurrent with a line of physical sneakers, ideal for crypto enthusiasts.
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