The NFT is not just a modern-day collectible but a digital asset that businesses can use to develop a branding strategy, depending on the target audience, says TZ’s Jivan Tulsiani.
24th Barbers, a neighbourhood barbershop in Caloocan, Manila, has done something unusual – in October, it launched limited edition non-fungible token (NFT) art shirts.
Now for the fun part. This not-so-ordinary shirt comes with a free NFT, a utility or perks that can be used at the barbershop. A customer who owns an NFT will be automatically upgraded from a basic haircut service to a higher grooming package that includes massage.
This is one of the first integrations of NFTs into a local business. The standalone barbershop wanted to explore the potential of the technology to engage with clients differently by building exclusive communities of NFT owners in the real world. To succeed in today’s fast-paced business environment where customer loyalty is hard to come by, NFTs can help build brand loyalty with additional perks.
NFTs are tradeable digital assets or commodities verified using blockchain technology. They represent ownership of real-world items such as art, music, video clips, collectibles and sports assets. NFTs are bought and sold online, and are typically seen as digital proof of ownership of any given item. NFTs are more than just modern-day collectibles – they are important for building brand loyalty with community and exclusivity.
NFTs and real-life use cases
While the barbershop used NFTs as perks to build a community of loyal clients, one of Indonesia’s leading media houses, Harian Kompas, is driving audience interaction by building exclusive communities of NFT owners. In October, the country’s largest circulated newspaper introduced an NFT strategy by combining exclusivity with incentives to eternalising on the blockchain compelling photos taken by its photographers that capture some of Indonesia’s pivotal moments in its history.
Harian Kompas announced that it will mint 57 of its most accomplished photographs on Tezos, the pioneering layer one proof of stake blockchain. The series captures photographs from each year since the paper was founded in 1965. The reason is simple: The brand wanted to immortalise the publication’s best creations by putting them on a blockchain – rather than keeping them in its internal archive – to better engage its readers. It wanted to be part of a vibrant NFT creator economy in Indonesia and the rest of Asia.
But how does it work? There is a perk for owning the brand’s NFTs. Once the collectors acquire enough points through NFTs, they can exchange those points for a physical item such as postcards of the same photograph they minted as an NFT, as well as exclusive merchandise including t-shirts, the brand’s photography book and other items. This allows it to grow by engaging consumers with incentives, and building trust and loyalty.
There are many more such real-world use cases of how companies from a wide range of industries have used NFTs to engage fans and clients in a different dimension.
Take, for example, Mocca, one of the most popular Indonesian jazz and indie pop bands. It created NFT music cards to give its fans access to rare editions of songs and special passes to online concerts. They create them in objkt.com, a leading marketplace built on Tezos, where artists and collectors can mint, buy and trade NFTs.
NFTs in the world of Web3
As technology evolved over the last few decades, the changing market dynamics have led to newer ways of how businesses and brands interact with consumers. While the internet and smartphones have had a huge impact on building that relationship, it is expected that Web3 will bring a paradigm shift. Typically, Web3 is defined as the next generation of the online world which allows inclusion and more access, a democratic version of the current internet.
The main essence of Web3 is giving people ownership. Now people want to take control of what they produce on the web. The ownership gives them the power to do what they want. If Mocca, the indie pop band from Bandung, owns the music it produces, then it has the power to reach its audience directly. Fans who are NFT holders receive exclusive access and benefits. This helps in building a large community around the brand. Simply put: Web3 and NFTs focus on ownership, transparency and user privacy.
Building a community
From Indonesia’s biggest newspaper to a neighbourhood barbershop in the Philippines, there is a common thread that connects them – using NFTs to build a community around their brand.
Until recently, NFTs were seen as just modern-day collectibles or pieces of physical art. In 2021, the top-selling NFT was created by digital artist Beeple (Mike Winkelmann), which was sold at Christie’s auction house for US$69 million. But people are now slowly realising what NFTs are and how brands and businesses can utilise this digital asset to develop a branding strategy around it depending on the target audience. The key here is to focus on utility for the consumers.
In markets across Indonesia, the Philippines and Thailand, the vibrant Tezos ecosystem includes artists, photographers, musicians, singers and poets who are adopting the blockchain to advance their craft.
What is really encouraging to me about NFTs and the power of Web3 are the use cases we are seeing on a grassroots and national level. NFTs are being adopted by people in the community, SMEs and big organisations – basically any person or business looking to build a community and further their craft.