How NFTs and the metaverse transform customer experience
According to McKinsey’s recent report Value creation in the metaverse, the metaverse will be valued at $5 trillion by 2030. The potential impact of the metaverse varies by industry, with an estimated $2 to $2.6 trillion impact specifically on e-commerce. Let’s explore what opportunities the metaverse and NFTs bring to retailers and how these innovative technologies can change customer experience.
The metaverse is a new marketing and sales channel
McKinsey’s survey of consumers and business leaders found significant excitement about the potential of the metaverse. Almost 60% of consumers are enthusiastic about transitioning everyday activities to the metaverse. Shopping in the metaverse is one of the top 5 activities consumers are excited about. The survey also revealed that 95% of executives expect the metaverse to have a positive impact on their industry within five to ten years and 61% expect it to moderately change the way their industry operates.
Business leaders’ interest in the metaverse is quite obvious: brand presence in the metaverse is a perfect way to promote new products, create more word-of-mouth marketing buzz around the business, and build brand awareness. As a result, retail giants like Gucci, Balenciaga, Tommy Hilfiger, DKNY, Estée Lauder, Karl Lagerfeld, and Alexander McQueen are already experimenting with the metaverse to stand out from the competition. Other than staying ahead, the metaverse enables brands to engage with consumers as never before. For instance, Gucci Town on Roblox comes in as a “dynamic destination” in which users can explore the vision of creative director Alessandro Michele, express their individuality through virtual clothing, and connect with like-minded individuals.
Tommy Hilfiger also offers the metaverse experience to its customers through its virtual TOMMY PLAY store on Roblox. Alongside the retail space, the main attraction is parkour, where the community can enter a spray paint area to create their own tags and unlock street dancing. Roblox users also can work towards getting into a secret space, complete with a DJ booth for hosting parties. According to Tommy Hilfiger, sharing these fun and unique aspects of the brand with the Roblox users is an innovative way they engage with the digital consumer.
The metaverse is not only a perfect tool to entertain customers, it’s a new channel to sell goods, both real and virtual. Imagine that you can create a virtual space where your customers have an opportunity to examine the realistic digital copies of your goods from all angles and even try them on using AR technology. You can provide consumers with engaging online shopping experiences, allowing them to examine the quality and materials like they would offline. As a result, you blur the line between online and offline shopping and the consumer can buy your items without hesitation. This new approach to online retail will drastically improve customer experience.
NFTs are a new tool to cultivate member loyalty
Retailers are not only finding a use for the metaverse but also blockchain technology, in particular, non-fungible tokens (NFTs). Unlike other digital assets, NFTs are unique and exclusive. They are not intended to be mass-produced, and their limited nature drives their value. It is their uniqueness that enables brands to use NFTs to drive customer interaction and loyalty by building exclusive communities of NFT owners. On top of that, brands can attach any kind of reward or experience to an NFT, which allows them to engage with loyal customers in many different ways.
In October 2021, Clinique became the first Estée Lauder brand to offer an NFT. Instead of selling NFTs, the beauty brand has given away three unique non-fungible tokens among active members of the brand’s community. To win one of the NFTs, the brand’s fans needed to sign up for the Clinique loyalty program and explain how they bring optimism to the people around them on social networks. With the NFT airdrop, the beauty brand intended to reward consumers for being loyal and give something valuable back to their community.
Prada’s NFT strategy is also a great example of how a brand can use NFTs to reward loyal customers for buying its limited-edition products. The Italian luxury house has recently introduced NFTs to its Timecapsule collection. Launched in 2019, Timecapsule is a monthly, limited-edition drop of a ready-to-wear product, which is available to purchase only on the brand’s website for just 24 hours. In June 2022, each physical product from the Timecapsule collection came with a free NFT, giving access to exclusive benefits and experiences. On top of this, the brand promised to gift anyone who had previously bought Prada’s physical Timecapsule pieces with corresponding NFTs.
As the company bringing innovation to shopping experiences, Cappasity will be one of the companies to help brands step into the metaverse and take customer experience to the next level. Back in 2018, Cappasity demonstrated its vision of the metaverse for e-commerce:
Soon, Cappasity will launch a solution that will allow brands to create NFT-based loyalty programs and add extra value to their products. What makes the Cappasity NFT a truly valuable digital asset is that it can contain not only photos and videos, but also text (e.g. a brand’s history), immersive content (3D/3D View visualization, AR holograms, virtual try-on), and VIP perks and benefits, like personalized discounts, invitations to events, priority access to new product launches, and more. Brands can add new content to NFTs even after the customer gets the token, which allows them to use Cappasity NFTs as a new customer communication channel.
The metaverse and NFTs have great potential to change the way people shop and engage with their favorite brands. Investing in the metaverse experience today will give brands a competitive advantage in the future.