When 2PM Executive Member and CPG investor Magdalena Kala first explained Bored Ape Yacht Club as a social signal, I balked. That was months ago and she was right. The key ingredient to any social club is FOMO and FOMO is exactly what many consumers feel right now – me included. Who needs a Country Club membership to signal upward mobility when your Twitter avatar does that for you. Look at this recent tweet by Shopify App entrepreneur Dennis Hegstad, for instance. Hegstad’s satirical tweet highlights the levels of FOMO observed around the NFT market. A year ago, few of us would be able to conceptualize this. The “social signal” class of Non-Fungible Tokens is one that you’re going to want to study. Not only will its social impact have an effect on the burgeoning world of online community (ahem, the metaverse) but it will play a substantial role in brand retail.
There is a chance that your favorite brands will build NTF-based social circles of their own and these tokens will be the buy-in. This strategy won’t just be for the traditional brands, Shopify recently enabled NFT sales on its platform to much praise from the cryptocurrency community. The timing couldn’t have been better as brands look for new ways to foster community (and revenue) amidst supply chain and COVID disruptions. I explained as such in The Digital Supply Chain.
NFTs have always been tied to access. The purchase of a digital good mystifies some who don’t understand the real-life value of an old YouTube video or NBA clip. It makes more sense when you think about NFTs as gateways to digital communities steeped in exclusivity. Today’s feature report explains the idea of the NFT boom facilitating the era of the “digital country club”.
People are buying community. People are buying access to events and experiences. The most successful projects have been about creating a community. Think of it like a digital country club. The price of admission is the cost of the NFT. And that’s a one-time cost.
Country clubs have always been places where members can flaunt status and mingle among a select group. NFTs are making that possible for an internet-bound generation. That’s playing out across platforms in a number of ways. CryptoPunks, a collection of unique character avatars on the Ethereum blockchain, is now allowing users to rent out their avatars, essentially opening up a revenue stream while granting access for a limited time to newcomers. The idea that NFTs were crashing as an asset class is beyond laughable at this point.
NFTs will continue to underscore the exclusivity and accessibility of the community while giving outsiders a glimpse inside the world they’re now vying to enter. There are a number of retail applications, here. As mentioned above, there’s also a clear tie-in to luxury brands, whose value is steeped in exclusivity. Burberry and Louis Vuitton have both recently launched NFTs in gaming worlds where insiders are in the know and outsiders don’t get it. Within these digital worlds, status blooms when you can buy a digital luxury skin.
Through these NFT plays, access can be teased and played with. New experiences will unfold only for NFT holders. This will become a sign of brand loyalty, a new meaning for VIPs. Shopify’s recent move will open up NFTs to more mainstream merchants, but there’s still a level of knowledge, resources and commitment one must have to get involved. From there, fear of missing out unfolds.
By Web Smith | Editor: Hilary Milnes | Art: Alex Remy