NFTs have been one of the hottest conversation topics on the internet these days. We have witnessed multi-million-dollar deals on digital assets for the first time ever. While NFTs are known for uplifting independent artists and creators, global brands made their first move to explore new opportunities in this space.
- How are companies using NFTs in their business?
- What values are they delivering to consumers through NFTs?
- Do NFTs actually benefit their business?
Event summary and key takeaways
Non-fungible tokens (“NFTs”) have not left the most talked about topic billboard since 2021. It is now also a new digital asset class associated with blockchain and cryptocurrencies. Learn more about NFTs fundamentals here. As much hype exists in this space, what does this emerging technology mean to enterprises? Do NFTs present any new business opportunities that enterprises could seize?
In our recent Immersion session, our analysts went down the rabbit hole on NFTs with our panel of experts, who are pioneers in this emerging field. We summarised a few key takeaways from the session — points that you, as a business leader, could benefit from. We hope this would be the cornerstone for you to initiate NFT conversations with your team members.
NFTs are beyond a digital ledger
Technically, NFTs are non-interchangeable units of data stored on a blockchain. It is common knowledge that NFTs represent ownerships and store data in an immutable manner. However, the capabilities of NFTs have shown that they can deliver more value to the enterprise than what one perceives at a surface level.
Adding utility for practical use-cases
The utility of NFTs provides experiences to your consumers and it allows NFTs to have a sustainable value creation throughout the user journey. For instance, this could be membership, event access, professional certification, phygital ownership and crowdfunding.
Eliminating administrative hassles
When enterprises integrate NFTs into business processes, traits such as metadata and timestamps can simplify transactions and potentially remove the need for intermediaries. Therefore, NFTs positively impact both enterprises and consumers with increased efficiency and lower operating costs in such an instance.
Recurring revenue for the NFT project owner
Enterprises can benefit from a new revenue model, one enabled by smart contracts embedded in NFTs. If NFTs (tangible assets or intangible) have potential in the secondary market, enterprises can gain a small royalty fee from every new trade in the future.
Business Benefits from NFTs
With that potential being said, should enterprises even consider implementing NFTs? Is there any return on investment (“ROI”) from an NFT project? Like every other new technology, NFTs are still at the experimental stage of its adoption life cycle. Hence, we are convinced that enterprises should view the implementation of NFTs as an innovative initiative. The goal is to understand NFTs and continuously develop new use cases for the stakeholders.
Tapping into the NFTs space
For enterprises to execute an NFT project, it will differ from how an individual artist or creator launches their NFT digital art. Depending on their respective industry, enterprises already have existing product/service offerings and defined customer segments. Hence, as an organisation leader, you should ask yourself and your team three questions before you kickstart an NFT initiative:
- What problem are you trying to solve with NFTs?
Think about the value you would be adding to your customers through an NFT strategy. It will be a unique proposition for your business to outperform competitors.
- What is your community strategy?
Instead of ad-driven marketing, community-first is the winning strategy in the NFTs space. Enterprises need to identify their community model canvas – how to engage with the community members, be it rewards (e.g. airdrops), voting rights on community proposals or other interactions that will foster a deeper relationship between your brand and your consumers.
- How do you educate and align with all the stakeholders?
As mentioned, NFTs are still at the nascent stage. It is vital to educate and ensure the alignment between all stakeholders, including C-suites, IT teams and other executives. They need to understand NFTs and how this emerging technology can help future-proof the business for the new digital economy.
Existing entry barriers for enterprises
Unavoidably, innovation initiatives always come with obstacles. In order to commence an NFT initiative, there are three immediate challenges that enterprises need to address:
- Lack of seamless experience for new participants
The onboarding process to a crypto wallet, buying an NFT from the marketplace, is complicated for most consumers/end-users. It is a significant obstacle, one that hinders NFTs from achieving mass adoption.
- Talent and skills gap
There is a shortage of candidates who know NFTs. Project managers, strategists, marketers, community managers, and developers are among the in-demand skills in the NFT space.
- Ineffective in pivot and execution
Enterprise lacks experience and agility to pivot NFT strategy based on user requirements — increasing the failure rate of the NFT initiative.
Interesting case studies shared by twimbit analysts and the experts:
- McDonalds McRibs: https://www.independent.co.uk/life-style/food-and-drink/news/mc-donalds-mc-rib-nft-b1949621.html
- Alfa-Romeo SUV: https://www.cnbc.com/2022/02/08/new-alfa-romeo-suv-equipped-with-nft-blockchain-technology.html
- Nike Air Max 1 Sneakers: https://ftw.usatoday.com/2022/02/oregon-ducks-football-nft-air-max-tinker-hatfield
- Bored Ape Yacht Club restaurant: https://abc7.com/nft-bored-ape-yacht-club-long-beach-web-3/11745812/
- Flyfish Club by Gary Vaynerchuk: https://thespoon.tech/here-are-the-details-about-flyfish-club-gary-vaynerchuks-nft-restaurant-opening-in-2023/