Is the "small picture" story over? An article on the transformation of NFT

Compilation: Nick

Non-homogeneous token NFT has experienced a wave of enthusiasm in 2021, and many people choose to use these colorful pictures as a symbol of their Web3 identity. But as NFT trading volumes have receded, the focus of the discussion has shifted from the short-term value of NFTs and chasing the hype cycle to the long-term utility of holding these NFTs.

As the crypto market faces new challenges and remains in a prolonged slump, many are exploring other directions to see how the future of blockchain technology may hold. Non-homogeneous token NFT has experienced a wave of enthusiasm in 2021, and many people choose to use these colorful pictures as a symbol of their Web3 identity. But as NFT trading volumes have receded, the focus of the discussion has shifted from the short-term value of NFTs and chasing the hype cycle to the long-term utility of holding these NFTs.

Many brands have begun exploring creative use cases for NFTs beyond just quick investment opportunities. Now, businesses are looking at NFTs as a way to build closer relationships between brands, creators, and consumers by tying rewards to long-term ownership.

For example, GQ released an NFT-related magazine subscription service in February, while sports media "Sports Illustrated" launched an NFT ticketing plan in May. Meanwhile, Starbucks launched a beta version of its "Odyssey Web3 loyalty program" in October to reward its most loyal coffee drinkers.

These mainstream brands are most concerned about how to attract new customers who are looking for innovative experiences. For them, loyalty programs, memberships and ticketing opportunities are the most applicable scenarios for NFT.

Enhancing Loyalty Economy via NFT

Loyalty programs, or points-based systems such as Delta Air Lines' Skymiles and cosmetics retailer Sephora's Beauty Insider program, reward customers for purchasing branded goods and services. According to a July 2022 survey by LendingTree, 80% of Americans are members of at least one loyalty program. Consumers typically want better discounts, better access through loyalty programs, said Matt Schulz, chief credit analyst at LendingTree.

NFTs have gained a place in these systems for their ability to create communities around brands, according to Tara Fung, CEO of Web3 infrastructure company Co:Create, who said NFT loyalty gives users the opportunity to forge a stronger connection with the brands they love , and brands can more effectively connect and interact with customers.

Getting started is often a pain point for companies looking to add Web3 loyalty benefits to existing goods and services. Blackbird founder Ben Leventhal claimed that he believes NFTs are the most effective mechanism for attracting and rewarding restaurant customers for brand loyalty.

Blackbird's NFT loyalty program is simple: when customers dine at a Blackbird-supported restaurant, they instantly receive an NFT that is minted into a unique backend wallet as their "proof of meal." Every time they go back to that restaurant, the NFT becomes a new token with more rare features.

Blackbird, like many other companies leveraging blockchain technology, has taken the approach of removing terms associated with Web3 in order to be as user-friendly as possible for new users. For example, some companies, including Nike and Starbucks, have chosen not to use the word "NFT" in their marketing materials, instead referring to their products as "digital collectibles" and "tokenized assets."

NFT tickets are the future trend

Disruption over ticket sales for pop star Taylor Swift's tour has exposed serious problems across the mainstream ticketing industry. From malfunctioning platforms to duplicate tickets to exorbitant resale prices, Swifties fans often face significant barriers to acquiring tickets.

NFT tickets could provide a solution to some of the problems currently plaguing the events industry. David Marcus, executive vice president of music at Ticketmaster, explained that artists can use NFT tickets as a way to better control how tickets are distributed to fans. Metal band Avenged Sevenfold, for example, offered NFT holders of its Deathbats club exclusive tickets to a live show through Ticketmaster.

Matt Sanders, lead singer of Avenged Sevenfold, believes that not all types of events need NFTs, but they do provide fans with more choices and eliminate some of the pain points of buying and selling tickets.

Alfonso Olvera, CEO of NFT security company Tokenproof, said that NFT tickets can provide holders with some benefits, such as on-chain verification of ownership, participation rewards, artist royalties for secondary resale.

At present, Web3 ticketing is still in the early stage of development, but some well-known companies have begun to set foot in the field of Web3 ticketing. In May, sports magazine Sports Illustrated launched SI Box Office, a self-service event management and blockchain ticketing platform that helps events create and sell NFT tickets. The platform partnered with blockchain software company ConsenSys to mint all tickets on the Ethereum sidechain Polygon.

"We believe that NFT tickets are the future trend of holding live events, and NFT ticket sales can become an entrance for fans to explore blockchain technology and gradually adapt to Web3 events." David Lane, CEO of SI Ticketing Company, said.

In addition, SI Box Office aims to make it easier for traditional entertainment or media brands to enter the Web3 space and engage their audiences.

Web3 Membership and Community Engagement

In addition to loyalty programs, some brands are using NFTs as memberships into entire ecosystems. These ecosystems not only provide users with a unique experience or perks, but also create avenues for communities to thrive.

Meral Arik, co-founder of Passage Protocol, a Web3 membership platform, said that when consumers own a membership NFT, they feel like they own part of the brand, community, or ecosystem that the NFT represents. As a result, consumers are more motivated to create value for the ecosystem, whether it's buying more products, interacting on social media, or telling friends about it.

Arik said that tokenized memberships can also reward members for long-term participation in the ecosystem. She noted that Passage Protocol builds dynamic NFTs that evolve as holders interact with brands.

Web3 beauty company KIKI World built its brand around a growing community of makeup enthusiasts looking to better connect with the makers of their favorite products.

KIKI World utilizes the technology stack built by Co:Create to launch the KIKI World membership pass NFT, granting holders access to the DAO. In The DAO, members can propose product ideas, vote on upcoming product launches, and participate in exclusive events and experiences.

Brendon Garner, co-founder of KIKI World, pointed out that membership programs can use blockchain technology to enhance user experience and create more enjoyable interactions.

Although the NFT is the vehicle to drive the KIKI WORLD membership program, the DAO component of their strategy helps foster a more interactive community structure - similar to a real-life membership program, but with the added benefit of blockchain technology and security.

“From a conceptual level and a philosophical level, I think it’s important to be able to reward those who make the biggest contributions and empower them to actually have an impact on areas they’re passionate about,” Garner said.

Bringing Brand to Fans via Web3

Going forward, tools such as NFT loyalty programs, membership rewards, or NFT tickets provide a powerful framework for brands and consumers to gradually adapt to Web3. Using NFTs, brands can build communities around their products, connect the two and reward those loyal fans who engage in the long term.

Brands can leverage these tools smartly without losing new users to short-term trends. The point is to find the right way to fit the technology, not to follow trends blindly. Additionally, NFTs do not need to be marketed as the focal point of a branding campaign or Web3 strategy, but can be used as a tool to enhance existing initiatives, engaging mainstream users in a meaningful and sustainable way.