Although the NFT market is currently experiencing a decline in activity compared to its peak in 2021, web2 brands are charging into NFT adoption in droves.
Nike, a brand that has already made it big in the digital collectibles space, recently released NFT sneakers that can be redeemed for their real-world counterparts.
And Disney has partnered with Dapper Labs to release collectible digital pins that fans can trade.
The reason behind the mass adoption is simple — NFTs have created a new frontier for brands to engage with audiences and create new revenue streams.
Nike, for example, generated $185 million in revenue through various NFT collections. NBA Top Shots, another popular NFT collection, has amassed more than $1 billion in revenue for its digital trading cards.
So, in this article, we’ll look at how different web2 brands are unlocking multiple revenue streams with NFTs.
NFT collectibles serve as a creative outlet for brands, allowing them to explore and redefine their relationship with audiences through unique digital assets.
NFT collectibles redefine brand revenue by offering unique engagement and monetization avenues.
Brands can strategically leverage NFTs through various avenues such as digital collectibles, physical-backed tokens, fractionalized tokens, royalties, and airdrops.
4 Ways Brands Can Generate Revenue With NFT Collectibles
Let's look at how various brands are strategically leveraging NFT collectibles to redefine their approach to revenue generation in the digital age.
Digital collectibles
NFTs initially made their mark through digital collectibles, offering ownership rights to a range of items including original art, video game cosmetics, and even trading cards.
But now, they’ve opened up a new realm for brands to engage with the audience and generate revenue by leveraging brand association and creating a sense of identity and belonging.
For example, the Steve Aoki x Stepn digital sneaker collection utilized the celebrity DJ's influence to attract fans and sneaker enthusiasts alike. Additionally, the collection's limited edition nature and unique designs also drove sales by creating a sense of exclusivity.
In a similar vein, Reddit’s recently launched NFL-themed avatars also took off. Aside from being affordable (each NFT started at $25), the collection engaged the target audience as it aligned with the target audience’s interests.
Note: While the collections above showed that digital collectibles without additional utilities can be successful, the long-term viability and interest in such NFTs can be limited. So, brands considering NFTs should think about integrating digital utilities or benefits to enhance value and sustain interest.
Loyalty Programs
NFT-based loyalty programs can transform customer engagement, offering a mix of exclusivity, personalization, and innovation.They help brands strengthen their relationships with customers, foster long-term loyalty and drive revenue growth over a long-term period.
Club Soda 3.0 exemplifies how a brand can leverage NFTs and blockchain technology to create a more engaging, inclusive, and innovative loyalty program. A key feature of the program is the opportunity for members to co-create with Scotch & Soda on special projects, deepening the engagement and allowing a collaborative and creative interaction with the brand.
Additionally, the program emphasizes privacy and inclusivity, allowing members to join anonymously through their public cryptocurrency wallet addresses. This approach, combined with the use of Discord for community engagement, creates a unique platform for interaction, free from the traditional algorithmic constraints of search engines and social media platforms.
Royalties
Unlike traditional collectibles markets, blockchain platforms can incorporate a royalty fee into each subsequent NFT collectible trade. This allows the original creator or brand to continue benefiting financially from the appreciation in value of their digital assets. Some notable examples of how businesses are benefitting from royalties on the sales of their NFT collectibles:
- Nike's NFT collectible business resulted in a staggering $91.2 million in royalties.
- Tiffany has also generated an impressive $4.76 million in royalties from NFT sales.
- Adidas has also notched up substantial success through its NFTs, amassing over $4.7 million in royalties revenue.
Phygitals
Phygitals allows brands to integrate a physical item with its digital counterpart to create a more immersive and exclusive experience for their customers by adding a layer of engagement beyond the physical product or digital product.
For example, Gucci’s "Otherside: Relics by Gucci," features the KodaPendant, a limited-edition collectible that’s linked to a Koda silver pendant.
The KodaPendant is sold for 450 APE (approximately $1,800). Only 3,333 of these pendants are available and are sold only to Otherdeed holders, making them a rare collectible item. Also, players must complete a set of tasks in the Otherside to unlock the purchase of the digital pendant.
That’s not all. The digital pendant further enhances the experience by unlocking new features within the Otherside game.
By offering these exclusive phygital products and integrating them into a unique virtual narrative, Gucci not only elevates its brand presence in the digital domain but also opens new avenues for customer engagement and revenue generation.
Unlock New Revenue Frontiers for Your Brand with Dibbs
In a digital landscape where major players like Nike and Disney are capitalizing on the untapped potential of NFTs, brands face the challenge of adapting to the evolving market.
Dibbs addresses this challenge by offering comprehensive support from planning to launching and distributing NFT collections while staying legally compliant.
To learn more on how Dibbs can help with launching successful NFT collections that maximize revenue potential, schedule a demo with Dibbs today.
