Consumer brands and NFTs: a troubled relationship

Recently, Starbucks announced it was shutting down its NFT-based loyalty program, Odyssey. There are rumors that Nike will shutter its program as well.

Over the last few years, consumer goods brands have made several attempts to enter the Web3 space, many jumping into the world of NFTs as a first salvo. The number of entrants is large — over 50 of the biggest brands in the world have executed something in the NFT, including:

• Coca Cola
• Honda
• Nestlé
• Trix
• Heineken
• Jack Daniel’s
• Kellog’s
• … and more

These initiatives mostly seemed to have fizzled, with several NFT collections moving virtually no volume after their initial launch — for example, Funko and DC’s collection has moved all of $553 as of the time of writing this. Luxury brands such as Burberry, Gucci, and Louis Vuitton shipped projects that made a big splash but have since languished, never shipping second seasons to their programs or generating further buzz.

Why? Let’s explore some reasons why brands might have struggled with general, non-crypto audiences:

1. They do not solve a problem, nor do they provide a 10X improvement to the product experience
2. They add unnecessary friction to product usage: NFT schemes for loyalty programs require the user to take extra steps during their purchase or usage process, requiring users to change or adopt new habits
3. They were not designed to be long-lived in the first place; some perhaps intentionally so (e.g., charity drives), and others due to a lack of experience or preparation.

One final point that can be considered is the unique culture of the NFT community, which is largely based on speculation. The current cadre of core NFT enthusiasts expects to be able to gain value, if not altogether earn, from their participation and acquisition of NFTs. For hardcore enthusiasts to participate in these loyalty-driven NFT programs, they should see a way to benefit in the long term. Ideally, in the short term. Charity drives are the only possible exception.

A barrier contributing to the difficulty points above is the inability to easily integrate participation in web3 programs into their larger marketing/promotional ecosystem. With the current air gap between web3 marketing and traditional marketing, it becomes hard to maintain these programs without an increased headcount, tool stack, and effort.

Dappfuse eliminates this airgap by enabling wallet and contract activity to seamlessly flow into existing stacks — Amplitude, Mixpanel, etc. This empowers existing teams to integrate their web3 projects into a complete marketing strategy.

Want to explore the possibilities of a holistic marketing program? Let’s talk! Reach out to us on Twitter or via email.