Phygital appears more like a made-up word with the combination of ‘physical’ and ‘digital.’ If Phygital can ensure a seamless unification of digital and physical experiences, then brands can explore many plausible opportunities for marketing. The following discussion helps you figure out the reasons for using Phygital NFTs in marketing initiatives and some pointers for the same.
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Background of Phygital NFTs
The search for entries in a Phygital NFT marketplace can take some time. You can find non-fungible tokens, or NFTs, as a unique class of crypto asset with many similarities to cryptocurrencies. Both digital assets run on the blockchain, albeit with many differences from each other. NFTs are also associated with the uniqueness of each asset without any scope for replacing NFTs with other tokens. Therefore, NFTs are the first choice for the representation of digital assets or ownership of any type of asset on the blockchain. The working of non-fungible tokens involves storing asset ownership and utility information on a blockchain network using minting.
It is important to remember that the properties of the non-fungible token would be defined under the metadata and the unique tokenID. NFTs are governed by smart contract code without any centralized intervention. Blockchain is a decentralized and distributed ledger with tamper-proof abilities and most of the NFTs have been created on Ethereum. Other new blockchain networks are also evolving as ideal candidates for NFT development, with popular examples such as Solana, Polygon and Binance Smart Chain.
The popularity of Phygital NFT marketing has been gaining considerable levels of attention recently. NFTs have the potential for transforming the conventional notions about the divide between the physical and digital worlds. Therefore, the evolution of Phygital NFTs seemed inevitable with the rise in the adoption of NFTs. Phygital NFTs can resolve concerns about complete dependence on digital environments for using NFTs. Now, you can also have physical proof of NFT ownership, such as items like a block or physical artwork.
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How Can Brands Capitalize on Phygital NFTs?
The potential of Phygital NFTs for marketing would also draw attention to their use cases. An overview of the use cases of Phygital NFTs in marketing can showcase a detailed impression of practices for utilizing them efficiently. The consumer-brand relationship is one of the biggest priorities of enterprises working on marketing strategies. What is the key element for marketing success today? The answer would point at instant gratification or a business that can cater to their needs immediately. As a matter of fact, around 45% of consumers have suggested that they would switch to another brand if an organization cannot cater to their needs. Customers have to evolve with new technologies and brands need to adapt to the changing customer behavior trends in the face of technological advancement.
From the looks of it, Phygital seems like an exclusive concept for the future or for people and organizations with advanced technology. However, Phygital experiences are for everyone, and many companies across different industries could leverage them for branding advantage. Here are some of the ways in which brands can capitalize on the potential of Phygital experiences.
Many companies, especially the big names, have taken the initiative to embrace Phygital experiences into their marketing strategy. During peak season as well as beyond that time, retail companies could use live video shopping. Therefore, brands could ensure that customers have the experience of in-store shopping directly from their homes or living room couches.
The next sector you might want to look at before searching for a Phygital NFT marketplace would be the automobile industry. Automobile companies use live one-on-one video calls for integrating Phygital experiences in their operations. For example, the Phygital element can help improve personalization to offer customers value-based benefits. As a result, automobile organizations can have better chances of improving online automobile sales.
Another notable area of opportunity for Phygital non-fungible tokens would round up in the real estate sector. Real estate companies can capitalize on the element of personalization, control over ownership and authenticity with Phygital NFTs. The adoption of Phygital NFT marketing can play a vital role in enhancing the trust of customers in the business models and properties listed by real estate firms.
Benefits of Using Phygital NFTs in Marketing
The Phygital NFTs are basically unique digital assets linked to blockchain and representing a physical asset. Phygital NFTs obtain digital values from smart contracts and metadata. In such cases, the NFTs based on a physical asset must be connected to the digital twin of the concerned asset, such as a 3D model or a digital image. Developments in the metaverse have shown that Phygital NFTs could soon unify physical and virtual worlds without any compromises. At the same time, you need to understand that digital artwork and collectibles are considerably popular in the present times. However, all the NFTs are not equal and have different utilities. Phygital NFTs serve a practical purpose and provide flexible proof of ownership alongside ease of transfer.
The applications of Phygital NFTs in brand marketing could show how they can help brands in growing their brand presence and revenue in multiple ways. Here is an outline of the potential reasons for adopting Phygital NFTs for your marketing strategies.
Royalties on Secondary Sales
NFTs rely on smart contracts which manage the token transfers and ownership verification. Smart contracts are basically pieces of code that help in storing NFTs in blockchain with transparency and immutability. After tokenizing a digital asset or product, brands could claim royalty payments for secondary sales. Every time the NFT of a brand is traded, the brand receives a certain percentage of the sales. Therefore, you can notice how the use cases of Phygital NFTs in marketing can enable fair royalty distribution. As a result, creators could explore new avenues for monetizing their art.
An example of NFT royalties could help you understand how they work. Let us assume that you own a business that sells luxury jewelry items. When a customer purchases a piece of jewelry item, you receive the payment, and that’s it. Now, the buyer can sell off the jewelry item and your business would not gain anything. On the other hand, you can convert the jewelry item into a physical NFT. Therefore, your business can earn royalties on secondary sales of the jewelry.
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Non-fungible tokens are the top favorites of brands for creating brand awareness, contributions to good causes, developing additional revenue streams and growth in customer loyalty. Interestingly, the prospects for Phygital NFT marketing focus on the collaboration of brands with popular NFT collections. The collaboration can help the top brands reach a wider audience alongside developing better connections with existing customers. Some of the renowned examples of such collaboration include Gucci and Superplastic, GAP and Frank Ape and Adidas and Bored Ape. Such type of collaborations guide brands towards new channels for wealth creation alongside launching new and rare collectibles. Brands collaborating with NFT collections effectively indicate their adaptability to new tech trends. Most important of all, you don’t have to worry about adding separate technology tracking growth as smart contracts can do the heavy lifting.
The uses of a Phygital NFT marketplace for the marketing strategy of a business also focus on limited editions. What is so special about limited edition products? The answer points out the necessity for creating a sense of exclusivity and urgency regarding the special highlights of a product. Customers don’t want to miss on limited edition products as they can sell them on secondary markets or gain ownership of a special asset. On the other hand, you can release limited edition products in the form of Phygital NFTs to capitalize on the benefits of higher resale value, which also increases the royalty payments. At the same time, limited edition products are also associated with scarcity, thereby enabling possibilities for more resales.
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The interesting use cases of Phygital NFTs in marketing would also point towards pre-sale NFTs. Putting up physical NFTs for pre-sale could help in crowdfunding projects. Brands could sell NFTs of a product under development, thereby helping garner the required financial resources for product development. On the other hand, NFT owners could receive early access to the project offerings and the possibilities for success. For example, a popular crowdfunded adult animated short series, Stoner Cats, uses pre-sale NFTs for creating exclusive content.
The adoption of cryptocurrencies and NFTs among the younger generation i.e., Gen-Z and millennials, is a promising indication for the adoption of Phygital NFTs. With the help of NFTs, brands can have better chances of selling their offerings to a younger audience. In addition, NFTs can easily open up a business to a wider collection of target audience groups. For example, Block bar shows how a Phygital NFT marketplace could work effectively for selling liquor. The traditional liquor store and the new-age NFTs spell out a productive tool for premium brands to reach a new audience.
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How to Use Phygital NFTs in Marketing?
The reasons for using Phygital NFTs in marketing deliver a clear impression of why brands should try them right now. On the contrary, it is also important to have a detailed impression of the best practices for using Phygital non-fungible tokens in marketing. Here are some of the best practices for brands to capitalize on the true potential of Phygital NFTs.
The most common use case for Phygital NFTs in brand marketing would draw the limelight toward event ticketing. Non-fungible tokens can serve as digital tickets for virtual or physical events and can draw more users. Mintbase is one of the popular platforms used for minting digital assets and tickets in the form of NFTs. NFT tickets for an event could help in reducing the environmental footprint of the non-fungible tokens.
The concept of decentralized technologies revolves largely around creating communities. NFT communities are based on shared interests, and many Phygital NFT use cases in marketing could help owners get access to elite clubs or communities. Most important of all, owners of Phygital NFT marketplaces could help in establishing a discord community.
The uses of Phygital NFT marketing also serve as an effective option for the traceability of products. All the data about Phygital NFTs goes on a secure blockchain, thereby ensuring better traceability of products. NFTs can help in tracking all physical items individually, thereby offering better results in comparison to serial numbers.
If you want to develop a collection of Phygital NFTs for your brand, then you would need a project-oriented community. NFT marketing services could help you develop a community. On the other hand, Phygital NFTs can serve valuable incentives for all community members with long-term utilities.
Integration with Products
Brands could also integrate NFTs with their products to make the most of Phygital NFTs in marketing. The use of Phygital NFTs with products could help in preventing concerns of counterfeit or fraudulent goods. Such a strategy would work best for limited edition products, collectibles and expensive goods.
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The reasons to use Phygital NFTs in brand marketing and the best practices for the same help you understand their capabilities. Phygital NFTs spell a unique relationship between virtual and physical experiences while embracing a new class of assets. Non-fungible tokens have been considered the future of the digital economy, and the skyrocketing sales numbers of NFTs speak the same. The adoption of Phygital NFTs for marketing can be quite challenging for beginners. However, a detailed impression of the fundamentals of Phygital non-fungible tokens can help you start the learning journey. Discover a revised perspective on the use of NFTs in marketing now.
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*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!