Marketers need a way to meet customers where they are. Increasingly, that is in virtual worlds, where NFTs and metaverse promotions can drive awareness, supercharge sales and build loyalty, shares Preston Woo, CFO and head of strategy of Tafi and Daz 3D.
Brands are still adjusting to rapid changes in consumer expectations and buying habits that were already evolving but accelerated during the COVID-19 pandemic. The most successful companies over the past few years were those that quickly responded to changes in how customers learn about and buy products. Now brands are looking at new ways to meet customers where they are, including in virtual spaces.
To drive brand awareness, build customer trust, inspire customer loyalty, and increase sales, many top brands are leveraging augmented reality (AR) and NFTs. Other brands are tapping into the creativity of their superfans to develop unique messages and memorable consumer experiences. Along the way, Marketers need new skills to stay ahead of the curve as the metaverse gets more mainstream traction.
The current situation is analogous to the evolution of brand marketing experienced at the advent of the internet as well as when mobile apps became ubiquitous. Major brands are establishing a presence in the metaverse, which means it is a good idea for marketers who work with brands of all sizes to stay up-to-date on how the discipline is evolving. Here is a closer look.
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Using Avatars and NFTs to Communicate Values and Deepen Relationships
People want to do business with companies that share their values. Diversity and inclusion are core values for the top beauty brand Clinique. The company recently collaborated with artists, such as Sheika Daley and Emira D’Spain, on an NFT collection that celebrates “the beauty of all skin everywhere,” including the metaverse. The brand has also partnered with Daz 3D on its mission to make the metaverse more inclusive. Clinique’s avatar project communicates the company’s values while appealing to consumers who share their ideals.
Top athleticwear company, Champion, nurtured brand trust and loyalty by launching a line of apparel and accessory NFTs that brand superfans can wear in the metaverse, including branded hoodies and sweatshirts. Coca-Cola, one of the most recognizable brands in the world, collaborated with top device maker Samsung and our team at Daz on a series of augmented reality avatars and digital apparel projects. The branded apparel is available to customers exclusively on Samsung Galaxy AR Emoji Marketplace.
NFTs are a unique marketing asset because they give consumers a way to connect with the brand while still maintaining the brand’s control over assets through blockchain technology. As brands like RTFKT, a leading creator of virtual sneakers, collectibles, and experiences, have demonstrated, companies can give fans license to interpret the brand by creating memorable digital artifacts. Meanwhile, marketers continue to learn valuable skills through virtual world experimentation.
Brands Using Virtual Reality to Drive Real-world Sales
Building affinity communities is nothing new, of course. Brands have been doing that in the analog world for generations — the Mickey Mouse Club in the early days of television is just one example. A fan community like the Pearl Jam 10 Club is another — the popular band uses analog and digital club membership to connect with fans and provide access to exclusive content.
Now brands are using NFTs in a similar way, and it is driving real-world sales. A recent Wall Street Journal article outlined the scale of the opportunity, noting that a McKinsey study projects that metaverse spending will reach $5 trillion by 2030. The overwhelming majority of consumers surveyed, 79%, say they have already made a metaverse purchase. About 47% of those people said they made in-game purchases, and 37% said they bought virtual cosmetic items. About 33% also said they purchased real-world items offered for sale in the metaverse.
Surveyed executives told McKinsey they expect the metaverse to be good for their industry within five to ten years; 95% believe it will positively impact them. About 25% expect metaverse to drive 15% of their total margin growth in five years. The article indicates that brands that have taken the plunge, including fashion brand Forever 21, have reaped the benefits, building greater brand awareness within virtual reality (VR) communities like Roblox and seeing an uptick in real-world sales of virtually promoted apparel.
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New Skills for a New Era
Many marketers are understandably hesitant to invest in metaverse marketing since virtual reality is not yet fully mainstream. But consumer acceptance of virtual worlds, digital identities and related accessories is growing, especially among younger customers. This is why major brands are eager to establish a presence now, as they did when the internet and apps emerged in earlier eras.
Now is the perfect time for brands to expand their comfort zone and test new ways of connecting with customers. Brand marketers who are just starting out in the space can work with a partner with the experience and knowledge of metaverse to execute a successful NFT marketing strategy. That is a great way for brand managers to explore virtual reality marketing opportunities, including cross-over promotions that combine traditional and metaverse-based marketing campaigns.
At a minimum, marketers should keep tabs on how marketing in the metaverse evolves and consider opportunities to use digital assets like NFTs. The metaverse is changing rapidly, but the underlying technology, including blockchain, is uniquely suited to help brands maintain control while unleashing creativity to reach customers where they are.
How are you adapting your marketing strategies to connect with customers in the era of NFTs? Share with us on Facebook, Twitter, and LinkedIn.
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