A Brief Analysis of the NFT Market: Go Beyond the Convention and Inspire Customer Loyalty

past two years, the art boom in the NFT (Non-Fungible Token, that is, non-homogeneous token) market has continued to heat up, and more and more physical brands and digital artists The influx accelerated, and a number of interesting commercial applications were born. For example, in March last year, NFT artist Beeple’s work “Everydays: The First 5000 days” was sold at an auction price of 69 million US dollars. status symbol.A Brief Analysis of the NFT Market: Go Beyond the Convention and Inspire Customer Loyalty

In addition, many sports organizations have also begun to use NFT to deepen interaction with fans: the NBA launched the video highlight trading card Top Shot; the Australian Open turned every small area on the tennis court into an NFT, and currency holders can obtain these areas The video replay of the key ball in the game, if the ball that determines the champion happens to appear in a small block, NFT holders can also get the game ball-in the 2022 Australian Open final, Nadal’s last hit The NFT auction price in the region has increased by more than 40 times.

In this context, will these investments form a bubble? Will these bubbles burst? Some investment tycoons have expressed concern about this, and they are also very concerned about the thoughtless and blind speculation of investing in cryptocurrencies.

Bain found that, apart from the high prices in the fields of art, sports and entertainment, as well as the recent plunging prices of virtual currencies, in terms of basic technology, NFT Marketplace Development is more relevant to the consumer goods business and has a broader application prospect: Not only can NFTs help optimize customer rewards and loyalty programs, but they can also bring other creative new ways for businesses to perfectly reshape the way they interact with customers.

In 2014, NFT came out, and the first standards were proposed in 2017. Therefore, the commercialization process is still in its infancy. Up to now, in the NFT trading market OpenSea, more than 2 million Ethereum addresses have participated in the transaction. However, given that a user can have multiple Ethereum addresses, the actual number of people who buy Ethereum NFT on OpenSea may be far less than 2 million, and it is also much lower than the number of people who buy virtual currency.

NFT and Web3.0 Era

NFT can pass any valuable thing in the real world through “minting”. It is the unique identification and proof of ownership of physical or digital assets, and is stored or recorded in a place that cannot be edited, changed or tampered with. On the digital ledger (block chain), it can be viewed by anyone.

In practice, Bain observed that NFT has become a key component of the emerging third-generation Internet service Web3.0, including the transaction verification and execution system based on the token economy. As a decentralized and highly interoperable system, unlike current consumer technology platforms, Web3.0 does not require strict control over customer information. In the Web3.0 environment, customers’ digital assets and information can be shared on various platforms; customers own these assets and information, decide what content to publish and disseminate, and hold a wallet that can be used on any accessed website.

As an integral part of Web3.0, NFT has advantages in customer interaction compared with centralized systems, because centralized methods have not yet achieved complete interoperability. For example, sometimes, the same company operates in different countries. cannot interoperate with each other. NFT relies on companies in the same ecosystem to establish infrastructure, standards, and developer tools. Therefore, it will be more convenient to build a system directly on the basis of existing elements than to establish an independent new system. In addition, if more people use digital asset wallets and other functions, they may also ask for NFT.

Grasp the five characteristics of NFT: stimulate customer loyalty and enhance corporate value

NFT is a programmable digital ticket that provides traceable, verifiable, and tradable asset ownership. Holders can gradually add new content, while NFT creators can manage their behavior according to pre-designed rules. As a result, NFT can open up new possibilities for companies to interact with customers and provide rewards with its unique gameplay, superposition, transaction, programmability and interoperability.

gameplay

In gaming terms, NFTs can easily be transformed into “loot boxes” that can be used to hold various consumable virtual goods. Consumers win prizes of the lowest value by completing a specific set of activities, however, how much else is in the “treasure chest” is entirely individual to individual. For example, after spending 10 times, taking 10 flights or checking in 10 times, consumers can get an NFT Marketplace to exchange for gifts; some customers can also randomly get shopping discounts, upgrades, free wine and other gifts at check-in.

Superpositionability

By adding subsequent content to NFT, it will become a proof of consumer participation and a carrier of memory. For example, on a certain catering platform, the reward for consumers is to upgrade to the chef’s table: NFT can attach menus, photos of consumers and chefs together to make unique souvenirs. Similar forms of participation will give consumers powerful experiential rewards, which are more precious and harder to price than prizes of real value.

TRANSACTIONAL

People can share NFT prizes with friends and family, groups can preserve collective memories, and vacation spot owners can trade their vacation time slots in vacation apartments… Some businesses may not like customers selling prizes openly on the marketplace, however, Under the condition that all parties can benefit, the above behavior of cultivating loyalty will generate economic value: on the one hand, it will help enterprises to accumulate customer behavior; service cost. The effectiveness of these incentive programs will continue to grow as customers value them more. It’s worth noting that the more customers value rewards programs, the more likely they are to actually use NFTs, even if it’s just selling them for cash.

Programmability

Businesses can charge a small transaction fee for any sales transaction, set expiration dates for prizes, or improve off-season perks, etc., all of which can be pre-included in smart contracts.

Interoperability

With a decentralized mode of operation, NFT can easily connect brands, creators, influencers, consumers and collectors, and collaborate with multiple parties. In addition, businesses can bring new forms of added value to NFTs, such as adding tickets to exclusive events to watch certificates of authenticity.

Bain found that at present, industries such as retail, consumer goods, media entertainment, and tourism are trying new NFT application scenarios to directly interact with customers, track product life cycles, build reward mechanisms for wallet payment solutions, and encourage distribution. Tools (Fig. 1-Fig. 3).

NFTs are kept in a multifunctional wallet registered in the owner’s name, through which a two-way communication with the brand is established, similar to a reminder or chat in an app. This wallet not only holds credentials for rewards programs, but also payment credentials including cryptocurrencies, credit cards, and more.