NFTs are currently associated with high-value art, but they are evolving into incremental assets that brands will issue to engage with customers in a hybrid digital and physical space, says Jonathan Teplitsky.
Individual brands are creating dynamic NFTs and captive NFT marketplaces to keep customers as engaged in digital spaces as they are with the physical brand, Jonathan Teplitsky, CEO of Pipeline Marketing, told Opto.
The non-fungible token took the market by storm in 2021 and became known for richly priced art selling. However, Teplitsky thinks the future will be much smaller and simpler with ticket sizes of NFTs shrinking and volumes of commonplace trades rising. “People won’t look at it like an NFT,” he said. “They’re going to look at it like an asset that they’re issuing. You can only do that if NFTs are valued in small increments — $15, $20, $50. That's kind of where we’re headed.”
A former team manager for Amazon [AMZN] in Seattle, Teplitsky started his own company that builds NFT marketplaces and consumer experiences for brands.
In the gaming world, green shoots of incremental buying have already emerged. Players can buy character avatars, accessories and even power-ups, which are stored and can be traded in the form of NFTs, he said.
The development of the market will depend on the confidence NFT owners have on the marketplace. For instance, there is a sense of security if the marketplace was owned by Sony [SONY] or Gamestation rather than an unknown third party, Teplitsky explained.
Real world companies
The shift to real world companies is also on the way. For instance, a bowling alley chain that Teplitsky is working with is building a metaverse bowling experience that will seamlessly connect with the physical alley through customers’ NFT identity. “They want to build a real bowling alley in the metaverse where people can bowl, but the experience gets them excited about bowling in real life.”
One of the largest US bowling alley chains is Bowlero [BOWL], which has been recovering from its bankruptcy since 2012 and recently consolidated with AMF as footfall at such locations tumbled during the pandemic. Shares of Bowlero ended down 1.6% on 17 February.
“I think we’re probably six months to a year before we start seeing widespread adoption” – Jonathan Teplitsky
The chain Teplitsky is building a solution for plans to offer a dynamic NFT to its users, and points and starts that will be added to the NFT can be redeemed for offers in either the physical or virtual game.
Luxury brands are also using NFTs to create unique customer engagement, he added. While Teplitsky did not name customers, he said that a brand like Moët Hennessy Louis Vuitton’s [LVMH] Sephora may issue an NFT to a customer, which would act a little like a loyalty card. However, if the customer is not using the benefits for some reason, rather than letting the loyalty points lapse, they could “sell it to somebody who wants it, and make a little bit of money”.
Moreover, if brands allow interoperability for customers to trade, there may be a place for buyers to trade relative offers, optimising sales activities for the brands themselves.
While the top brands may continue to operate closed, exclusive marketplaces, Teplitsky expects that “for the long tail 95% of brands, it’s going to be open. They’re going to end up building on more open platforms, like OpenSea,” he said, adding that this will automatically kickstart trades.
Build your NFT
Disney [DIS] is ahead of the pack when it comes to adopting NFTs. The company reported a stellar fourth-quarter result and said the footfall in its theme parks was recovering after two years of slowdown owing to the pandemic. “I heard rumours that in Disney World, you can actually create your own NFTs,” said Teplitsky. What this means is that a buyer may be able to create and own a digital lightsabre, which they could then use in the Disney metaverse or even sell at a later date. The experience of building it would be somewhat like building a stuffed toy, where the customer can pick attributes of the final ensemble.
“I think we’re probably six months to a year before we start seeing widespread adoption,” said Teplitsky.
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