How NFTs Could Revolutionize Luxury

Key Takeaways: The global pandemic has helped the NFT phenomenon since more brands started focusing on digital innovation and blockchain-backed digital assets. NFTs provide greater protection against the duplication and distribution of copyrighted materials. Non-fungible tokens will impact digital storytelling by bringing creators who understand the power of ethical marketing to the forefront. Over the past few years, digital technology has revolutionized marketing and storytelling. But recent developments in blockchain and non-fungible tokens (NFTs) are likely to change the industry further. The global pandemic helped launch the NFT phenomenon since more brands started focusing on digital innovation and blockchain-backed digital assets. But how will non-fungible tokens revolutionize digital marketing and luxury storytelling? Compared to “fungible” assets like bitcoins, NFTs have more appeal for luxury brands because they are “non-fungible,” meaning each NFT is assigned a digital hash that distinguishes it from every other NFT of its kind. NFTs have a “value” that is set by market demand. As such, NFTs can gain digital scarcity, which pushes the valuation higher. It’s the same scarcity principle that the luxury industry uses regularly. Take, for example, Hermès. The French luxury goods manufacturer has used the scarcity of its most iconic bags, the Birkin and the Kelly, as a marketing tool. It has also used the brand's desirability to dictate prices for its bags because, in the luxury world, leather bags don’t all hold the same value. Marketers can use non-fungible assets to set distinctive values for their digital products. And more importantly, NFTs provide greater protection against the duplication and distribution of copyrighted materials. Think of it this way, SASSO designed a visual ad for Coca-Cola and shared it on various social media platforms. The ad gained traction and was quickly redistributed and rewritten without SASSO’s permission. This predatory practice alters the perception of SASSO and its creative team. Moreover, a buyer might think that the ad is an original work and, in good faith, might decide “to buy” it from a third party. In this case, the buyer would inadvertently infringe copyright laws and become liable for violating the law. NFTs are used to avoid this depressing experience because the origin, authenticity, and ownership of the digital asset (in our case, the SASSO video) has been protected by blockchain technology. This digital certificate assures that the trade of digital assets is transparent and ethical. Protecting marketers and content creators will boost artistic creativity and confidence. And as a bonus, NFTs also amplify the voices of lesser-known content creators and digital storytellers. Imagine an artist has a thousand followers on Douyin, but she produces a very engaging short-video that gets re-shared millions of times. An NFT can help her achieve notoriety by making the video easily traceable to her, also amplifying her profit margins. Instead of working with a middle-man like an influencer, incubator, or e-commerce platform, which “owns” the work, the artist can sell her work directly to the end consumer. In doing so, she can improve her profit margins and create a more reliable, transparent interaction with her fans. Meanwhile, creators can slowly reduce marketing costs by eliminating intermediaries. Therefore, they can offer discounts and special pricing collaborations to brands. But brands also benefit immensely from the removal of intermediaries with NFTs. Not only can brands save marketing money, but they could also combat influencer fraud and eliminate the risks associated with paid bots and fake followers. Lastly, NFT will impact digital storytelling by bringing creators who understand the power of ethical marketing to the forefront. “Consumers are increasingly interested in understanding the story of the items they buy,” says Grant Wenzlau, Director of Creative Strategy, Day One Agency. “They want their products to reflect their values. Shoppers today are looking to brands to help them connect to other people.” Wenzlau rightfully highlights how modern consumers expect brands to express a set of principles that mirrors their progressive values. Therefore, ethical content and social impact storytelling will be in high demand. Building an ethical supply chain and offering consumers the opportunity to track each phase in the object’s lifecycle gives companies “the opportunity to tell extremely compelling product stories.”

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How NFTs Could Revolutionize Luxury