As the business for cryptocurrencies and non-fungible tokens swells, brands have an opportunity to build brand customer loyalty.
After several false starts, cryptocurrencies — driven by Bitcoin — could be here to stay. It’s unknown territory for the luxury fashion area, but momentum might increase fast.
Cryptocurrencies can serve as social tokens, building community and loyalty. The giant leap is to take this concept from tech circles to more mainstream consumer audiences, gaining acceptance among brands and influencers.
The first and several well-known cryptocurrencies appeared in 2008 during the financial crisis as a decentralised digital currency available from governmental oversight. Improvement was slow. Crypto has been tainted with the idea that it’s dirty money. Up until 2017, and up to 97 per cent of stuff out there was a scam. Visit the trusted one with bitcoin circuit app.
But cryptocurrencies are now reverting to the spotlight, thanks to their recent adoption by high-profile entrepreneurs like Elon Musk. In addition, regulation has improved the image of Bitcoin. It’s cleaning up. A year ago, Bitcoin’s market worth was $178 billion. Cryptocurrency is exchanged at new record highs, per the CoinDesk Bitcoin Price Index. Share of Bitcoin’s resurgence also has to do with the rise of online gaming and an increasing interest in non-fungible tokens (NFTs), says Martha Bennett, Forrester’s vice president and principal analyst. He has over 30 years of experience incorporating rising technologies.
Build Brand Customer Loyalty
This year could see fast growth for NFTs, a new type of decentralised digital asset issued on the Ethereum blockchain and certifiably singular, as a novel work of art. While digital marketing assets — such as avatar skins — isn’t new, this is a new way of preventing replicating investments by other users. In addition, fashion’s desire for newness and exclusive pieces could allow NFT creators to prosper: in July 2020, total NFT sales surpassed $100 million, according to Nonfungible.com, which monitors the collectable crypto market.
Major labels are already formulating and trading NFTs: Nike has applied them to improve digital shoes connected to real-world shoes. Louis Vuitton uses NFTs to trace the provenance of luxury goods. This trend is likely to stay in 2021 as fashion embraces the metaverse — a virtual world where people interact through avatars. But, overall, there is a trend towards representing physical assets in a digital form. So they would say to a luxury house, be aware of what’s going on because if you don’t become directly involved, someone else might.
Rewarding Follower Communities
A small proportion of luxury consumers currently utilise cryptocurrencies — one per cent. So in the context of the luxury industry, it isn’t going to become a mainstream payment instrument, but that’s not to say that brands should entirely ignore it.
Luxury watchmakers like Franck Muller and Hublot have started trading timepieces exclusively for investment via Bitcoin. The launch was a smash hit; interest was high, and they pre-sold 210 watches.
Cryptocurrencies can be used by brands to unite with — and reward — their fan societies. Established in 2018, Lolli has created a stage that enables anyone to obtain Bitcoin through purchasing. While most reward programmes give loyalty points or cashback, Lolli transfers Bitcoin straight to customers’ wallets whenever they buy online with Lolli’s partners. Lolli currently operates with over 1,000 retailers, including Nike, Bloomingdale’s, Saks, Sephora, Ulta, and the signed sneaker marketplace StockX.
Cryptocurrencies can be compared to air miles. They can only be accepted within the infrastructure of particular companies, but that’s not fundamentally a bad thing, states Tay of Plutus, which partnered with Nike in 2020. Customers who bought at Nike via Plutus would get back 10 per cent of the cost of the sneakers purchased in Bitcoin — a bonus for customer loyalty. Currently, Plutus has 25,000 users, most of who are below 35.
Brands have a chance to propel exclusive drops in the metaverse. For example, assume some day Nike creates a fashionable limited-edition NFT drop with LeBron James, and there are 100 of these sneakers that exist on. It can be your surface in the sport, but you can also get it in real life, and they’re available only via their social tokens.
Brand Loyalty Game
Various creators seem burned out by big tech social platforms, which rake huge profits and often give creators the raw end of the deal. Instead, brands and creators might prefer to use their tokens to build their economies and interact with fans on their terms.
Launching his currency is a loyalty activity that generates value for his fans, appearing like they’re investing and having ownership in his brand, says JVCKJ. Users who purchase into his $PSTL coin, named after his EP Pastel, will gain early access to his new statements in fashion and harmony. In the future, the entrepreneur intends to create “collectable” NFTs that his fans can purchase.
Kyiv-based fashion designer Anna Karenina believes that everyone who attends her fashion show could be an “investor”. So she issues crypto tokens, also known as initial coin offerings (ICOs), to her audience before a show, enabling viewers to crowdfund a design or collection.
The solution to carry in mind is that it’s a meditative asset, so they have to be adjusted to lose their money if it doesn’t work out potentially. In addition, the environmental impact of mining cryptocurrency could also be a significant obstacle in a long-term rise, as large amounts of computing power are required.