Before NFTs, “selling digital art” was an unlikely source of revenue for brands and businesses, even in the world of the arts. But with the growing adoption of crypto and NFTs, it is imperative that brands start venturing into this multi-billion dollar industry.
After all, opportunities are like sunrises; those who don’t pounce on them in a jiffy are bound to miss them.
Nevertheless, one fundamental question remains.
Can IRL brands simply leverage their existing consumer base to market a million-dollar NFT collection? Is it as easy as making a roadmap, tweeting a “WAGMI”, and hype and brand recognition will do the rest?
I’m afraid, nothing is that easy - even for big brands. In this article, we will be covering some success (and failure!) stories of brands stepping into the NFT space, as well as tips and tricks to sell NFTs, the right way.
A hundred years ago, establishing a brick-and-mortar was the “end goal” of almost every brand. But the Internet (or Digital) Revolution has changed that; and now company websites, social media accounts, and e-commerce stores are a “Must Have” for any business.
💡 Mark our words: Web3 Is the next revolution. And NFTs will be at the forefront of Brand identity.
Thus, entering the NFT space is really a no-brainer, especially for top tier brands.
So, can we replicate the methods of successful NFT projects? The short answer, no.
As we covered in a previous article, From NFTs To Building A Brand, these projects share common traits which have defined their success. But fundamentally, successful NFT projects and successful IRL brands are different. NFT projects want to BUILD THEIR BRAND.IRL Brands want to MAKE THEIR NFTs.The tables have turned, and brands are playing a whole new ball game.
So before going ahead to try and “replicate” the successes of any NFT success story, understand that context is everything.
If brands want to utilize the power of NFTs to build upon their business model, that’s already a step in the right direction. Without further ado, here are some IRL brands which have ventured into web3, some reaping the rewards, and others getting caught in no man’s land.
Instead of going the conventional way with the good before the ugly, let’s address what’s on everyone’s mind from the get-go. How can any Brand fail in their NFT collection? It is in fact, definitely possible and plausible.
On 10th Dec last year, a fairly praised NFT collection would pop out of nowhere: The Mic Drop Genesis NFT Collection by Pepsi.
Here is a brief summary of the drop details...
From the looks of it, Pepsi had a pretty strong foothold on their NFT project, with most of the right parameters which would encourage the typical NFT-enthusiast to get a Mic Drop NFT. Gary Vee and VaynerNFT behind the collection would provide the necessary NFT expertise, and whitelisted wallets give some order to the mint. Finally, a free mint means low barriers of entry to the project, thus creating more demand for the collection. All these traits are bullish.
And as expected, the Mic Drop NFT collection did well - reaching a floor price of nearly 2 ETH at one point.
But since then, the “hype” has died down, leaving Pepsi’s NFT collection to slowly fade... and it is currently standing at a floor of 0.3 ETH. In our eyes, there are currently no signs of revival. So this begs the question, why did Pepsi’s Mic Drop fail?
Looking back at the entire project, this is probably where things started going wrong.
On the surface, The Mic Drop seemed like a commemorative effort on Pepsi’s part, and their first venture into the NFT space. There was potential for it to be a fun mint, inclusive and easy, but the exact opposite happened.
Firstly, did you know that only U.S. citizens could take part in the Mic Drop mint? Yes, for taxation purposes! Those who minted also had to be of legal age (above 18), and provide certain private information upon request. Now that’s a red flag.
💡 Pepsi chose the centralized path. NFT-goers don’t appreciate that.
Something which struck us even harder was the presence of a T&Cs section... on their smart contract. Is Pepsi trying to hide the fact that they’re requesting personal information or what!?
Another factor contributing to the downfall of Pepsi’s Genesis NFT collection is their lack of connection with the NFT community. As the tweet above perfectly illustrates, we know it, frens, that Pepsi was pushing “WAGMI” too hard. Some onlookers noted that Pepsi was on a tirade of trying to be part of the NFT space, specifically through excessive use of 🚀 emojis and web-native terms like “Gm” or “LFG”.
💡 Pepsi was forcing the crypto-lingo. There was a lack of authenticity, and they failed to connect with the NFT community.
These “Cringeworthy” moments spectacularly on display on Pepsi’s Twitter account show their disconnect from the NFT world. Pepsi even had Snoop Dogg come in to say a few words about The Mic Drop (obviously a blatant “shill”), which had no effect on improving their reputation in the community.
When we talk about blue-chip NFTs, especially those which aim to become an NFT brand, the team is always focusing on the long haul. Pepsi... not so much. For one, The Mic Drop didn’t provide any real value. Unlike many other projects, Pepsi chose the “vibe” route. But if Pepsi couldn’t even strike a relationship with NFTers, how can “hype” be a long-term solution ?
Let’s not get the wrong idea that hype is not sustainable. In fact, some of the greatest NFT projects like Mfers stem from hype and community-building. But hype is a risky business.
💡 At the root of it all, people were expecting MORE from an established IRL brand like Pepsi. Not some hyped-up, vibey, NFT mic PFP.
Herein lies a great opportunity to restate a key point. IRL Brands can’t just copy methods of successful NFT projects, such as “hype”, to propel them forward. NFT’ers wanted value, but no value was to be found in a free mint.
At the end of the day, it was the grave mistake of making the collection “free” and inclusive, that contributed to the FP drop of The Mic Drop. It’s pretty ironic - Pepsi’s complicated Whitelisting process already eliminated any sort of “inclusivity”, what for make it a free mint?
To give Pepsi credit, they have been silently building behind the scenes. VeeCon, an event organized for VeeFriends holders and Gary Vee supporters, have just announced Pepsi’s “The Mic Drop” as one of their partners.
After all, Pepsi is still a huge IRL brand, and despite the poor NFT drop, we’re confident that it can certainly find new ways to add value to the holders. Can Pepsi make a 180 degree turn on their NFT collection? Only time will tell.
And of course, we have our fair share of success stories. After all, it’s the brilliant minds running day-to-day operations in IRL brands; working tirelessly on these NFT projects. We should expect fantastic results from projects led by veteran business managers.
Luxury brands are starting to appreciate the undervalued world of fashion in web3. And Gucci is one of the first movers. Back in mid-2021, Gucci stepped into the NFT space with its debut piece: Aria NFT. This was launched in celebration of Gucci’s 100th anniversary, and even came with a commemorative video. The NFT sold at $25,000 (https://m.youtube.com/watch?v=H14DatRx0Uo).
But Gucci isn’t stopping there. 6 months after their debut, Gucci collaborated with Superplastic to launch their exclusive SUPERGUCCI NFT collection. Here are some details in brief.
As expected, this SUPERGUCCI mint was hyped, for many more reasons than one. First and foremost, the limited-edition handmade ceramic sculptures caught the eye of many. Art appreciation aside, think about the significance of this collab.
💡 Superplastic is a global entertainment and product brand. Gucci has been synonymous with “Luxury” for over a century. It wasn’t long before people put two and two together...
As a brand of fashion and luxury, owning this NFT didn’t just mean profits for holders, but also ownership of a branded good IRL. Combining the world of NFTs and IRL luxury was a smart move on Gucci’s part. Tangibles and Non-fungibles aside, we noticed that Gucci had superb communication! Not only was it easy to reach the team on channels like Discord, but they were also highly flexible when it came to collaborations.
At our first NFT Paris event earlier this year, we invited Nicolas Oudinot, Chief Digital Business and Innovation Officer at Gucci, to give a sharing. Hand over heart, the Gucci team is one that simply “gets the NFT business”.
Future mints by Gucci will definitely be on our watchlist.
“Just Do It.”
Well in mid-December last year, Nike lived up to its name. The Sporting brand giant acquired NFT sneaker studio, RTFKT, which was valued at around $33 million at the time.
This acquisition seems to be Nike’s first venture into the NFT space, and it proved to be a major success. Since then, Nike has made significant progress in creating virtual wearables and sneakers, including their most notable collection, CryptoKicks.
💡 If you can’t beat them, join them. The team at Nike knew this from the beginning.
The NFT world is an unpredictable and wild place. Even an expert in digital derivatives would find it challenging to navigate the world of web3.0. So why not, acquire a successful NFT business and ride off their success?
RTFKT fit the bill, as it was both art and sneaker-centric. Through the acquisition of RTFKT, Nike gained their “street cred” in the NFT space, and kicks and wearables were in line with what Nike does IRL.
In all, the RTFKT x Nike merge, simply propelled both studio and business forward.
Hot Wheels, our childhood toy cars and also our proudest automobile collectibles. Truly, Hot Wheels has been building up an immense consumer base for the past few decades.
So when Hot Wheels decided to hop on the NFT bandwagon in November last year, fans were hyped. Here are some details about their first NFT collection.
From the structure of their NFT drop, it was clear that Hot Wheels was trying to market their collection, to the fans. In this case, hosting NFTs on the WAX blockchain makes sense; lower fees and the ability to price NFTs in FIAT USD. A huge NFT pack collection also allows ample time for enthusiasts to mint their pack.
But the game-changer for me is their vIRL feature, which basically allows holders of vIRL NFTs to claim a physical copy of their Hot Wheels model.
💡 vIRL is Hot Wheels’ way of bridging the real world and the web3.0 world. This encompasses the very meaning of what NFTs should be.
As such, it’s no surprise that the Hot Wheels NFT collection has been doing superbly, with multiple sales every day (even till today!). They have since launched an even bigger 2nd NFT collection, which has also sold out.
We feel that Hot Wheels has done a fabulous job connecting with both their IRL customers as well as NFT enthusiasts.
Going through the IRL examples above, I hope you’ve taken away some insights on how brands fly or flop in their NFT journey.
But to make it even more clear-cut, here are some tips and tricks for brands to successfully enter the NFT space.
KYC (Know Your Customer), is a term widely used in the crypto industry, most notably when crypto exchanges ask for their customers’ personal particulars. KYA (Know Your Audience) works in the same way.
In your NFT project, which group is the target audience? Are they your client base IRL? Is it the “General NFT public”? Who would you like to own your NFT? KYA is a point that is often overlooked, and it will either make or break an NFT project. One poised for the masses would end up getting botted by flippers looking for a quick buck, a severe detriment to the long-term plans for the project. Furthermore, it would be rather unrealistic to market NFTs to your IRL clientele, because most are simply not in the space.
💡 IRL Clients and NFT Clients are different. Focus on targeting the “NFT Collectors”, and you’re on the road to success.
These are the angel investors, the techies, the art collectors, and the NFT enthusiasts. They would pay good money for your creations and solutions both IRL and in web3: these customers are the early adopters.
If your brand delivers, these early adopters (usually credible figures in the space), will incite a second wave of adoption, to the other NFTers. And finally, digitization would do its thing bringing about full-scale adoption, even to those foreign to NFTs.
This is a cliché for any type of business. Brands, being in the industry of entrepreneurship and reputation, should know this best. Yet, not all of them follow this golden rule when it comes to NFTs. Trust us, it still matters.
Many NFT projects are criticized for their overreliance on hype and circumstance, rather than giving any real value to holders or the space.
But some NFT campaigns luck out with a strong community, and run to greater heights with nothing but vibes and hype.
💡 Brands built on “Hype” won’t last. Why? People naturally expect more from IRL Brands, so they want value.
It’s true: What can you expect from a team of artists and devs making 10K NFTs on the blockchain? Probably nothing.
Comparatively, people would expect more from a multi-billion dollar corporation and brands with huge presence IRL. Yes, NFTs are but another “face” of brands, so you should get your branding right before making NFTs.
And yes, there’s absolutely nothing wrong with underpromising. Just make sure your brand delivers.
There is one real simple way for brands to do their first steps in the NFT Space : POAP. To make it simple, POAP is a badge that proves you attended an event or an experience. It’s entirely free and easy to collect, which makes it an excellent first experience for brands who want to enter the space.
💡 Start small, it's the best way to understand the space and to succeed !
Wether it’s a pop-up store experience or a digital event, customers can show that they were part of the brand’s journey can do it through POAP. Adidas used it to celebrate it’s entry into the Metaverse, why not you ?
As with all industries, being part of the inner circle comes with its endless stream of advantages.
To a brand entering the NFT space, this is crucial. The right connections to key industry players can and will give your brand an edge over competitors. That’s why sporting brand Adidas partnered with BAYC, the largest NFT project by market cap, thus allowing Adidas to break into the metaverse and NFT space successfully.
💡 But how should your brand join the “inner circle” without having prior connections? Well, find the right partner!
It’s normal for brands to lack the relevant contacts initially, after all, the NFT space is still in its infancy. So why not turn to existing firms providing end-to-end Web3 solutions ?
Arianee is one such firm, and they have been developing crypto-native solutions for years now. Arianee has their own protocol and blockchain, a native token (ARIA20), and they even built a web3 platform. Established brands such as Richemont, Breitling, IBM and Panerai, have all partnered with Arianee to successfully enter the space. They have notably just raised 21 million to deliver ownership NFTs with physical luxury goods
Let’s be real: Building an in-house team of web3 experts just to enter the NFT space can be both difficult and expensive.
That’s why having an end-to-end Web3 solution is a no-brainer for brands who have a great IRL reputation and want to preserve it while entering the space. Even better when you partner with a veteran web3 brand to roll out your NFT campaign.
In all, the world of NFTs can be compared to a literal gold mine... with lots of potholes and dead ends.
Navigating web3.0 isn’t a task for the average joe. More importantly, the IRL brand and the solopreunist would take two very different approaches when starting an NFT project. Adidas, which made a remarkable entry in the NFT Space, isn't included in this article but will be featured in the our next article about brands entering the Metaverse.
I hope this article has let you gain more knowledge about how IRL brands can make it big in the NFT world, and that this mission is full of promises.
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