Redeemable Digital Collectibles for Brands: The Ultimate Guide
In today's competitive marketplace, sustaining customer engagement beyond the point of sale is crucial for brand longevity and success. Traditional rewards programs, while effective to some extent, often fall short in maintaining long-term engagement.
They usually offer linear benefits like discounts or points that can be redeemed for products, but these incentives can’t keep customers truly engaged. Over time, the novelty wears off, and this leads to decreased customer participation and increased customer attrition.
Redeemable digital collectibles solve this. By leveraging its unique attributes, brands can create more meaningful and lasting relationships with their customers and improve their retention rates. But what exactly are redeemable digital collectibles?
In this article, we’ll look at what redeemable collectibles are, how they benefit brands, and the challenges faced while creating them.
Redeemable digital collectibles create new possibilities for brands to monetize their offerings, boost customer engagement, expand audience reach, and generate revenue.
Brands can convert various assets into redeemable digital collectibles, including physical goods, digital products, and experiences.
Brands may encounter challenges in adding them to their products, designing a smooth redemption process, and storing and shipping physical items.
What are Redeemable Digital Collectibles?
Redeemable digital collectibles are assets that let holders exchange them for tangible benefits like physical products, exclusive content, or virtual and real-world experiences.
They add a layer of value to traditional digital collectibles and expand their functionality beyond mere artwork, which allows brands to engage customers on a deeper level and retain them over longer periods.
There are two types of collectibles; one, where the collectible is burnt or removed from circulation when the user redeems the associated perks or physical items. Nike’s CryptoKicks and Adidas’ Into the Metaverse are examples of these types of collectibles.
The other type, also called multi-redeemable collectibles can be redeemed multiple times for benefits. And every time the holder redeems a perk, the status change is reflected in the metadata.
Why Should Brands Create Redeemable Digital Collectibles?
Big brands like Starbucks, Nike, and Adidas are opting are adding redeemable digital collectibles to their offering for the following strategic reasons:
Improves Customer Engagement
Customer engagement directly translates to increased revenue as it creates a strong emotional connection with the brand and encourages them to stay loyal and make repeat purchases.
However, brands today can’t differentiate themselves easily and customers disengage due to the generic messages. This is why brands should use redeemable collectibles. Their redemption aspect can be used to offer unique experiences and rewards that are one of a kind and can't be replicated.
For a fast-food outlet, offering redeemable digital collectibles can create a personalised and engaging customer experience. These collectibles could be tied to popular menu items or seasonal promotions, unlocking exclusive discounts or special menu options when redeemed.
The gamified element encourages repeat visits, while the exclusivity of the rewards fosters customer engagement and loyalty and sets the brand apart in a competitive market.
Unlocks New Revenue Streams
In the past, brands primarily generated revenue through the initial sale of their products or services, without benefiting from any subsequent resale transactions. However, the advent of redeemable digital collectibles has introduced a new revenue model.
Brands can now establish a royalty system for these digital assets, allowing them to earn a percentage of any secondary market sales. This not only provides an additional revenue stream but also extends the brand's earning potential beyond the initial sale of the collectible.
Provides Proof of Authenticity
Counterfeiting is a major problem for brands when it comes to physical goods. Redeemable digital collectibles help address this issue.
Thanks to blockchain technology, each collectible’s entire history—from creation to any transfers of ownership—is publicly recorded. This makes it a counterfeit-proof certificate of ownership.
Even if the collectible is "burnt," or made inaccessible by sending it to a special blockchain address, the record of its existence and ownership remains. This permanent, unchangeable history allows anyone to verify the item's authenticity and origin at any time.
In this way, redeemable collectibles enhance consumer trust and protect businesses from the financial and reputational damage caused by counterfeiting.
Increases Brand Visibility
Redeemable collectibles, often in the form of NFTs, can significantly boost a brand's visibility in several ways. First, they create a sense of exclusivity, which makes them more appealing and shareable.
When consumers own a limited-edition collectible tied to a brand, they are more likely to show it off on social media, thereby amplifying the brand's reach and attracting new potential customers.
Another way redeemable collectibles improve brand visibility is through collaborations. When brands collaborate with each other or other creators with a large audience to launch a collection, it generates a lot of buzz which enhances brand visibility. In addition to this, it also allows brands to tap into an existing and engaged audience and expand its customer base and market presence.
Helps Build a Community
Leveraging redeemable digital collectibles can be a game-changer for brands aiming to cultivate a dedicated and engaged community.
By offering collectibles that can be exchanged for special experiences, merchandise, or access to exclusive content, brands can create a sense of belonging and exclusivity.
This not only enhances customer engagement but also fosters a community of brand advocates who are more likely to share their positive experiences and attract new members.
All-in-all, redeemable digital collectibles enable the next generation of engagement, a strategic move for brands to build trust, elevate customer experience, and improve brand awareness.
Examples of Brands Creating Redeemable Digital Collectibles
Many big brands have already embraced redeemable digital collectibles as tools to engage customers in creative ways and design exciting experiences. Let's look at three such examples:
Robert Mondavi x Bernardaud NFT Collection
American winemaker, Robert Mondavi Winery came together with French luxury porcelain house Bernardaud to create the "MCMLXVI" collection. The special-edition digital collectibles could be redeemed for handcrafted porcelain bottles of wine with custom wine blends. What’s more, the digital collectibles themselves are unique pieces of generative art created by renowned designer Clay Heaton.
Traditionally, wine and art have been two distinct avenues for collectors, each with its own set of rules, verification methods, and marketplaces. However, by integrating these two worlds through redeemable NFTs, the brands have created a novel hybrid market that appeals to a broader range of collectors.
Also, when a collectible is redeemed for a physical item, the blockchain serves as an immutable record of that item's provenance. This ensures that the physical item is genuine and matches the digital asset, providing collectors with a level of authenticity that is difficult to achieve through traditional means.
Cristóbal Balenciaga: To The Moon
Balenciaga, a renowned luxury fashion brand, created an exclusive collection of 8300 NFTs, consisting of never-before-seen designs from Cristóbal Balenciaga himself. These redeemable digital collectibles came with a variety of perks, including original hand-drawn designs, designer brand gift cards, and Balenciaga gear like wallets & bags.
The chance of owning a 70-year-old sketch by Cristobal Balenciaga himself appealed to both fashion enthusiasts and professionals. This conveyed the brand's heritage, value, and artistic legacy to customers, forging an emotional bond between the brand and consumers.
The additional perks like brand merchandise and gift cards provided tangible value to customers, encouraging them to engage more actively with the brand.
WAGMI United x Adidas
WAGMI United, an innovative Web3 brand, partnered with Adidas to launch its first NFT collection exclusively designed for WAGMI United's Crawley Town Football Club. Holders could redeem these digital collectibles for physical & digital merchandise by Adidas and get access to other club perks.
This strategic collaboration of web3 & web2 brands allowed WAGMI United to reach a wider audience and build a global digital community of Crawley Town fans around the club. The holders receive tangible value, showcasing their support for the club and improving engagement.
The digital collectibles also granted holders voting rights on issues around the community, giving them a voice in team decision-making. This, in turn, built trust between the brand and community and instilled a sense of shared ownership.
What Can Brands Turn Into Redeemable Digital Collectibles?
Brands have the flexibility to transform a wide range of assets and products into digital collectibles that can be redeemed. But the success of this strategy largely hinges on the characteristics of the items being offered and the preferences of the target market.
To assist brands in crafting a well-thought-out approach to redeemable digital collectibles, we've categorized the options into three main groups:
- Merchandise: Brands can create redeemable digital collectibles that buyers can exchange for limited-edition branded clothing, designer accessories, beverage bottles, or other tangible items.
- Artwork: Artists can tokenize their paintings, sculptures, or art pieces that collectors can redeem and own both in digital and physical representation.
- Collector's items: Brands can create digital collectibles that can be redeemed for physical trading cards, action figures, or memorabilia. At the same time, at the same time, these collectibles can also serve as digital ownership certificates securely recorded on the blockchain.
- E-Book: Authors or publishers can mint a limited number of redeemable digital collectibles that grant early access to an upcoming ebook. These NFTs could be sold or auctioned off before the book's official release date.
- Video game content: Gaming companies or developers can offer digital collectibles tied to in-game characters, assets, skins, or that unlock special levels. Holders could redeem these NFTs or trade them at secondary marketplaces.
- Educational material: Ed-tech brands or course instructors can offer collectibles that unlock additional lessons, one-on-one mentoring, live Q&A sessions, or exclusive study materials. These can also be used to monitor learners' progress in the course as they redeem each lesson.
- VIP access: Membership programs, concert tickets, event passes, or other exclusive experiences can be converted into redeemable digital collectibles. These could also contain other perks, such as early access to the venue or custom seating.
- Meet and greets: Brands can use redeemable digital collectibles to offer meet & greet opportunities with celebrities, influencers, or industry experts. Holders could redeem their NFTs for a specific time slot to meet the person of their choice.
- Workshops and training: Redeemable digital collectibles can unlock access to seminars and other skill-building experiences.
What Are The Challenges In Creating Redeemable Digital Collectibles?
Although redeemable digital collectibles have a multitude of benefits for brands, integrating them into brand offerings can be challenging. One of the most pressing hurdles in creating redeemable digital collectibles is designing a smooth redemption process.
For starters, it is important to ensure that the redemption process is user-friendly and accessible to customers. Not everyone is tech-savvy or familiar with blockchain terminologies like wallet or gas fees. This can deter customers from redeeming their collectibles.
Additionally, when the items to be redeemed are physical products, brands will need to collect customers' information like address and name. This is challenging as customers might hesitate to share personal information due to the fear of being doxed.
Another complexity with physical products is logistics and storage. Brands need to securely store items, use specialized packaging, and handle fragile items with care. Any misstep can lead to damaged products which in turn lead to customer dissatisfaction and harm the brand's reputation.
How Can Dibbs Help Solve These Challenges?
As a leading tokenization-as-a-service platform, Dibbs can help your brand navigate hurdles and convert items into redeemable digital collectibles. We tokenize your assets, guide your customers through all stages of redemption, and ensure that they get the best redemption experience.
We also ensure secure storage of your brand's physical items in our vault equipped with the latest security protocols and safely deliver them to the customer upon redemption.
All in all, our comprehensive solution streamlines every stage of the brand’s NFT journey - from creation to legal complexities. To know more about how Dibbs can help your brand embrace redeemable digital collectibles into its strategies and create memorable customer experiences, schedule a demo with us today.