Leading brands turning to non-fungible tokens to drive revenue growth

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Currently, non-fungible tokens (NFTs) are widely used. The rise in innovations is helping to find many examples across different industry verticals. The demand in the NFT market has slumped in Q1 and Q2 2022. On the contrary, leading brands across industries are adopting NFTs to drive their revenue growth. For instance,

• In August 2022, Pearson, the textbook publisher announced that the firm plans to profit from the second-hand sales of its titles by converting them into NFTs. Notably, educational books are often sold more than once as students sell the study material after they no longer need it. Previously, textbook publishers have not been able to benefit from second-hand sales. However, the rise of digital books along with the provision of NFTs have created beneficial opportunities for firms. 
• Pearson will be able to track the ownership of the book as it keeps changing ownership. According to Pearson, its books are resold up to seven times; however, it only benefited from the first sale. Technology such as NFTs and blockchain will allow firms like Pearson to participate in every sale by driving incremental revenue for the publisher. Notably, selling books as NFT is not a new concept. Authors have used the technology to self-publish their books globally.

PayNXT360 expects that the strategy of Pearson to sell digital books as NFTs to become more mainstream if the firm is able to drive incremental revenue and benefit from the second-hand sale by capturing the market which escaped publishers so far. Notably, books sold as NFTs is one of the examples to drive revenues. Even luxury retailers are moving in direction of NFTs to drive their revenue growth. For instance,

• In July 2022, Tiffany & Co. announced that the firm is converting CryptoPunk NFTs into custom pendants worth US$50,000. The firm launched NFTiffs, an NFT collection, in August 2022 wherein it is selling 250 NFTs for about 30 ETH or US$50,000 to CryptoPunks holders who will be able to redeem custom pendants in the style of their NFT.

Brands are exploring the Web3 ecosystem in a significant manner.  Launching their own digital collectibles as well as accepting payments in cryptocurrencies and NFTs, the trend is expected to accelerate further over the next three to four years. In developed markets like United States, several consumer-focused brands have started to accept cryptocurrencies as a payment option. Notably, these brands are expanding the crypto payment options in the country. For instance,

• In August 2022, Gucci, the luxury fashion brand, also announced that it is accepting ApeCoin at select stores in United States. Notably, Gucci’s expanding crypto payments support comes through a strategic alliance with BitPay.
• In May 2022, Gucci and BitPay entered into a strategic partnership, allowing Gucci customers to pay for their purchases in leading cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and Dogecoin.

Even though demand in NFT market has declined, industry leaders continue to see Web3 and NFT technologies as a promising way to engage their customers and drive incremental revenue from the long-term perspective. 

To know more and gain a deeper understanding of the NFT market in the United States, click here.