All About Phygital NFTs and How They Work
Businesses across industries are aiming to build customer communities in the hopes of staying ahead in the competitive market. The presence of a community can enhance customer experience, engagement and appeal in many ways. As such a situation persists, phygital nonfungible tokens are proving their worth with their potential to offer worthwhile community experiences that can take brand-customer relationships to the next level.
What phygital NFTs are
Phygital NFTs are the combination of digital and physical NFTs. They make it possible to purchase and manage physical products through their digital NFT counterparts. The customers who own phygital NFTs have a sense of belonging to a community based on a particular business. They are often entitled to exclusive benefits, which further enhance their connection to the brand providing them. They further improve brand recall and loyalty.
Industries involved in the phygital NFT space
Several industries worldwide are jumping onto the physical NFT bandwagon, and are reaping the various benefits that it offers. These are majorly the type of industries which find customer engagement essential to ensure business progress and development.
The major industries are as follows:
Some major businesses have already successfully adopted phygital NFT technology to create thriving customer communities. It includes Timex and the Bored Ape Yacht Club, Starbucks Odyssey, Bstroy x Givenchy phygital experiences, The Whiskey Barrel, and Cult and Rain.
Popular strategies used by brands to promote the use of phygital NFTs
While the potential of phygital NFTs to positively impact brands and customers is immense, not many are aware of it. Therefore, it has become vital to ease customers into the space, and help them understand the benefits as they experience them. For growing brands, taking it one step at a time is necessary to build a strong foundation for their NFT communities to stand on. The following are some real-life strategies used by brands to do so.
1. Brands are recommending customers to purchase NFTs and then burn them. This will give them access to various physical products and other experiences.
2. Once a customer burns a particular NFT, the brand provides them an alternative NFT. Or else, as soon as a customer buys a physical product, a related NFT is activated for them to use right at the store. The owners of such NFTs become a part of the brand’s community, and they can unlock new offers and experiences.
3. A good strategy has been observed in the gaming industry. Gaming brands enable players to own and sell phygital NFTs associated with their game avatars and in-game purchases, thereby shedding light on their achievements as a player.
4. Recently, Akshaya.io joined hands with the World Tennis League to provide phygital NFTs based on physical products based on luxury furniture, jewellery, entertainment, and so on. Through the initiative, fans can buy 3D digital NFTs and autographed WTL team jerseys. Plus, it unlocked access to exclusive WTL events where fans were able to meet their favourite athletes and buy NFTs that immortalised such experiences.
The future of phygital NFTs
Phygital NFTs are proving their power to build strong community experiences that can benefit business and customers immensely. NFTs are trending these days across various social media platforms, and brands are scrambling to make use of the hype surrounding them.
Despite the potential, there is a long way to go in actually reaping the benefits of what they have to offer. At first, it is imperative to set up a feasible system to manage and store the physical products that the phygital NFTs stand for. What’s more, phygital NFTs are in competition with regular NFTs that are more cost effective and hassle-free to manage.
Unless the legal, technical and practical elements of phygital NFTs are developed, the technology cannot be implemented successfully and on a sustainable basis. All in all, only time will tell how the future of phygital NFTs will go. If everything goes well, they could become a global sensation.
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