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NFT: behind the scenes of a revolution for brands

NFT: behind the scenes of a revolution for brands

‍Popular with artists, Web3 is a formidable playground for brands, where technology opens up a whole new world of possibilities for creativity and customer experience.

It's all hands on deck this Thursday at the ephemeral Grand Palais in Paris. The NFT Paris teams are putting the finishing touches to the event, which is due to open tomorrow morning a stone's throw from the Eiffel Tower.

The organisers are hoping for 10,000 people over two days. For the first edition, in 2022, it was 10 times less! 💃

"It's a big challenge, but we feel that despite the context, there's real traction around NFTs, so there's going to be a big crowd," explains Alexandre Tsydenkov, one of the event's co-founders.

👉 Small disclaimer: The Big Whale is a media partner of NFT Paris

For this second edition, the organisers have managed to attract some very fine people to the French capital: the creators of Bored Ape Yacht Club, CryptoPunks, Doodles... All the top names in NFTs are there.

There's also metaverse giant The Sandbox, digital collectibles champion Sorare and other big players in the sector. 💪

But, new compared to the 2022 edition, the big "traditional" brands are also well represented. Some like Samsung are sponsors, and others like Lacoste, LVMH, Adidas or PMU have sent teams to the event.

"Web3 represents a profound cultural change, it transforms the way we create and own things," explains Erika Wykes-Sneyd, Web3 manager at Adidas (read her interview).

"We are at an event like NFT Paris to meet the creators of the Web3 ecosystem, discover new projects and imagine potential new collaborations," she adds.

The appetite of corporates

This arrival of corporates in the world of NFTs illustrates the evolution of a market where we no longer just talk about digital art 🎨. This trend is also reflected in the figures.

According to Laurent Issaurat, Head of Art Banking at Société Générale Private Banking "more than 80% of NFTs purchased in 2022 were related to something other than works of art, such as profile photos that can be used on social networks or membership cards. Art NFTs stricto sensu accounted for $2 billion in transactions, or 11% of the global NFT market."

With their NFTs, Adidas, Lacoste or Renault have a simple objective: to innovate, build customer loyalty and reach out to a new audience. All with a strong community strategy. To put it simply, it's an evolution (infinitely superior) to the company's Facebook page or Twitter account.

Brand collections give the right to services, such as access to an event or entry to a club, while others offer the digital double of a physical product, as Adidas has done 👟 with its NFTs from the "Into The Metaverse" collection created in partnership with the Bored Ape Yacht Club.

All holders of the 30.000 NFTs - sold out in a matter of minutes - were able to pick up exclusive merchandising from the brand with the three stripes.

On another note, the Dom Pérignon house (LVMH group) has signed a partnership with Lady Gaga and released a series of exclusive 🍾 champagne bottles. Unveiled in October 2021, the 100 numbered bottles were accompanied by a digital twin created on blockchain.

"The market was booming at the time, LVMH was launching its first NFT, and the craze was on. The NFTs were immediately sold out", explains Adrien Ohannessian, founder of Renaissance, a creative studio that supports brands in their Web3 experiences. In particular, he has worked on projects for Renault and Swiss watchmaker TAG Heuer.

NFT holders: a heterogeneous public

What is the profile of those who are ready to switch to branded NFTs?

It's very varied!"

Of course, there are the collectors of the first hour, those who have the Web3 codes. These are the ones who will mainly be targeting the collections of very exclusive brands. "They are often crypto-millionaires. The value of their portfolio and their knowledge of Web3 enable them to position themselves on the most sought-after drops on the market, following the example of CryptoPunk," argues Laurent Issaurat of Société Générale Private Banking. 💰

Launched in 2017, the CryptoPunk collection of 10,000 NFTs is worth more than $1 billion. The American jewellery brand Tiffany & Co, acquired by the LVMH group, has signed a partnership with the collection (the rights to which belong to Yuga Labs, the creators of Bored Ape).

Every holder of an NFT can treat themselves to a pendant from the brand bearing the effigy of their CryptoPunk. The price of the pendant? $50,000 😅

The population that can afford this type of gift is obviously limited. The vast majority are divided between less initiated investors and consumers who have come to the Web3 as much out of curiosity about these new digital formats as out of brand loyalty.

To attract these newcomers, brands are banking on the community dimension of NFTs and tools that simplify the experience.

"NFTs are not yet easy-to-use tools, but we're working on solutions that make the journey obvious for consumers and brands alike," explains Pierre-Nicolas Hurstel, CEO and co-founder of Arianee, a platform that supports brands (Vacheron Constantin, Audemars Piguet, Breitling, Thierry Mugler, etc.) in launching their NFTs collections.

And indeed, it's working. In recent months, there have been countless projects by brands despite the bear market in cryptos.

"Brands have reached saturation point in their spending on acquiring new customers in the current ecosystem. In this respect, Web3 is an Eldorado, giving them all the latitude they need to promote their history, know-how and creative strength directly to their target audience, without any intermediaries," explains Adrien Ohannessian.

A CSR strategy

In addition to these three areas, the NFT can even serve a brand's CSR commitments, i.e. their consideration of environmental, social, economic and ethical issues in their activities. 🌍

This is the approach taken by Évian, which has decided to team up with artist Sara Shakeel to create a series of NFT works echoing the label's Alpine heritage, as well as its commitments to sustainable development by opting for the Tezos blockchain, considered to be one of the least energy-intensive.

The good idea? Évian has chosen to donate 100% of the proceeds from sales to an association that supports the new generation of artists. A collaboration that ticks all the boxes.

When asked about future trends in NFTs for brands, Adrien Ohannessian puts forward two key points: the rise of co-creation and the development of utilities associated with NFTs. "Web consumers need to bear in mind that investment and brand NFTs are mutually exclusive. This would be tantamount to putting brands on the same level as artists, and would certainly lead to disappointment. Of course some collections, especially the first ones from the big houses, can potentially increase in value, but that shouldn't be the leitmotif," he tempers. 💸

School case: Lacoste vs Porsche

One of the examples to follow is surely Lacoste 🐊 , whose sale in June 2022 proved a success as the 11,212 NFTs in the collection were sold out in less than an hour.

Each NFT was offered at an "acceptable" price (0.08 ether, the equivalent of 80 euros at the time of the operation) and allows people to participate in the co-creation of clothing in collaboration with the brand's designers.

The pieces are naturally reserved... for holders of NFTs and very limited edition products.

"We arrived with a great deal of humility in order to understand the ecosystem, learn how to use blockchain and offer a quality experience," explains Benjamin Cornut, director of social and Web3 experiences at Lacoste, which has just won the "Web3 Award" for "Web3 Corporate Project of the Year".

Here the price of the token hasn't skyrocketed (it's currently worth 0.05 ether, or 77 euros), but the team of around ten people (all professions combined) continues to deliver.

However, there is also the risk of getting our feet tangled in the carpet, like Porsche and its collection of NFTs dedicated to the iconic 911 model. Criticised for its excessive price positioning (0.911 ethers, or around 1,300 euros at the time of the operation), the collection was finally limited by the brand to 2,363 pieces, instead of the 7,500 planned, to avoid a flop.

The reason? Little community effort, very meagre utilities and the gamble that users will pounce on it solely because of Porsche's prestige. 🚗

"To launch a collection successfully, you need several things: a price that matches the market, an attractive design and an active community. Porsche, however, did not have any of these elements", argues Stéphane Baudin, a specialist in the marketing analysis of NFTs collections.

A hard-won lesson that should serve as an example for brands' next experiments.

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