NFTs started out as mere digital collectibles with a certificate of authenticity and true ownership intact. But, today, these digital assets have expanded their horizons from digital art and profile pictures (PFPs) to assets with a mix of physical and digital value — "phygital" assets — as well as gaming-related NFTs
Interestingly, according to our analysis of OpenSea, 84% of NFT adopters voiced their support for NFTs that are redeemable for physical goods. during our analysis of OpenSea. We found that over 25% of sales volume came from collections with both digital and physical utilities — and this number is growing.
Since we now know that people prefer NFTs with redeemable utility, how can brands leverage them?
The growing preference for NFTs with tangible benefits opens doors for brands to explore innovative revenue streams, enhance their brand-customer bond, and craft more interactive and personalized marketing strategies.
In this article, we will dive into what redeemable NFTs are and what value they bring to your brand and customers.
● Redeemable NFTs create a bridge between the digital and real world, offering customers tangible value.
● Brands can employ NFTs to enhance their customer journey through exclusive perks and limited-edition offers.
● Blockchain-based ownership and authenticity further boost the credibility of the brand.
What are Redeemable NFTs?
Redeemable NFTs are digital tokens linked to tangible assets whether physical or virtual. These tokens offer holders the ability to exchange them for valuable assets or experiences. NFTs are innately unique, thanks to their variations in traits and rarity. Brands can use this uniqueness to amplify the perceived value of their products.
For instance, Adidas Original teamed with BAPE to launch an exclusive collection of 100 NFTs.
Each NFT holder will be able to redeem their NFTs for a physical pair of kicks and its digital twin that can be worn in the metaverse. Once the holder exchanges the NFT for the physical sneakers and digital pair, it will be shipped to their address, and tokens will be burned from circulation.
The above was an example of one-time redeemable NFTs. There are multi-redeemable NFTs too — that can be exchanged multiple times for digital or real-world benefits — like Starbucks's Odyssey loyalty program.
The customers collect NFTs or ‘Journey stamps’ and reward points to participate in the program. These can be redeemed multiple times for benefits like access to virtual coffee classes, free drinks, and virtual tours at Starbucks Reserve.
How Redeemable NFTs Benefit Your Brand and Customers?
For brands, redeemable NFTs aren't only limited to selling products and services. They are also about creating real value and unique experiences for the brand’s customers.
Let's look at five ways in which redeemable NFTs can create value for your brand and customers.
Tangible Value
Redeemable NFTs offer holders more than just a digital token; they open doors to access real-world benefits and experiences.
They provide a more profound sense of investment as they can be converted into real-world assets. This ability to redeem the utility provides a sense of personal ownership too, rather than mere investment.
Brands can add extra utility layers to their collectibles, creating a more appealing experience for their customers.
For example, RTFKT X Nike Air Force 1 Genesis is a redeemable NFT collection of 1776 pairs of sneakers that allows holders to redeem NFTs for physical sneakers.
Brand Loyalty
Redeemable NFTs are an amazing tool for brands to reward and recognize their most loyal customers. Brands can tailor their redeemable NFTs to offer customized experiences or exclusive goodies for their customers.
This feeling of exclusivity is often a powerful motivator for customers, driving both purchase intent and brand loyalty.
In the NFT sentiment report, we found that approximately 60% of survey participants would love to buy NFTs from brands they love. This is more the reason for brands to design redeemable NFTs and reward them to loyal customers.
For example, Yves Saint Laurent (YSL) offered NFTs to every customer who purchased their Black Opium fragrance. This NFT came with perks such as membership to the YSL Beauté program, access to private sales and events, etc.
Enhanced Customer Journey
Customers want to feel special and valued in their bond with a brand. Owning a redeemable NFT gives them a genuine sense of ownership, as they hold a unique token that can't be replicated.
This ownership, combined with the exclusivity of limited edition NFTs, makes customers feel they have something rare and valuable.
By incorporating redeemable NFTs, brands can foster continuous engagement. Customers are more likely to interact with a brand repeatedly, either to redeem their NFTs or to participate in exclusive events or sales linked to their NFT ownership.
Thanks to blockchain, customers can trust the authenticity of the NFTs they purchase and the promise of the redeemable value attached to them.
These help in building trust and the customer journey improves.
For example, Tiffany & Co. launched a collection of 250 NFTs exclusive to CryptoPunk NFT holders. This offered holders to have a physical version of their CryptoPunk NFT, thereby strengthening their bond with the CryptoPunk and Tiffany & Co. brands.
Community Building
Communities form the heart of any successful NFT initiative. Through redeemable NFTs, brands can foster a deep sense of exclusivity and connection among their followers, enhancing their market presence.
These NFTs not only become a bridge between customers and their cherished brands but also unite like-minded enthusiasts.
By collaborating with companies and creators to co-create exclusive products and experiences, brands can enrich the bond with their customers.
For instance, Adidas Originals partnered with gmoney, Bored Ape Yacht Club, and PUNKS Comic to release its first-ever collection of 30,000 NFTs to enter the Metaverse. This collaborative effort sold the entire collection within minutes of launch and shot to the top of the charts.
Proof of Ownership and Authenticity
Redeemable NFTs come with an irrefutable proof of ownership and authenticity. This isn't just about digital bragging rights; it's about having a verifiable claim to an asset, both in the digital and physical world.
This proof, especially when associated with tangible goods or services, amplifies trust between the customer and the brand.
For example, NFT holders of previously mentioned collections like Tiffany & Co exclusive pendants can easily verify and prove the ownership and authenticity of their jewelry, as it's stored on the blockchain.
Craft Redeemable NFTs with Dibbs
Bridging the gap between the physical and digital worlds is no longer optional; it's essential. Redeemable NFTs enable your brand to create this connection seamlessly, transforming your offerings into digital collectibles that carry both real ownership and tangible value.
Imagine your customers not just purchasing a product, but an experience, a story, a unique digital-physical fusion. This is the future of customer satisfaction.
If this is the kind of satisfaction you wish to offer your customers, we can help your brand transition into it. We at Dibbs convert physical products or digital services into phygital and digital collectibles and guide your customers through the redemption process. To learn how Dibbs can help your brand grow its customers and engage them, schedule a call with us today.
