Pop-up shops were amongst the first retail tactics to create FOMO (Fear Of Missing Out) – here today gone tomorrow. This was followed by “drops”, made popular by sneakerheads (people who collect or trade sneakers as a hobby) and hypebeasts (a person who is devoted to acquiring fashionable items, especially clothing and shoes). The underlying strategy is to create scarcity which drives desire and value. The latest example of selling items using scarcity as a strategy are NFT’s, (Non-Fungible Tokens) where digital assets like art and virtual land are sold using blockchain technology.
Soon we could see mass adoption of NFT’s attributed to real world items. An early indication of this is highlighted by Nike in 2019 where the company filed a patent entitled, “a system and method for providing cryptographically secured digital assets”. The patent describes a system for minting, exchanging, and intermingling cryptographic digital assets in the form of digital shoes, which can be linked to a real-world physical shoe. Ok, what the hell does that mean? Basically Nike will produce a shoe in the real world but they’ll also create a digital version, (a token) of that shoe that lives on the blockchain making it accessible in the metaverse either as a collectable token or an item that can be worn virtually. Where this gets interesting is if the blockchain token comes with a smart contract, every time that digital asset is sold, Nike will get a share of the revenue. This form of retailing means if in the future retailers mint products on the blockchain as well as selling the item in the first place, they’ll create a reoccurring revenue stream without doing anything. Think of it in the same way a recording artist is paid royalties each time their music is played.
Retail is about to change in ways we’ve never experienced before and marketeers operating across the industry need to quickly understand the change and how this could affect their businesses. Valley is already investing in cutting-edge technologies and helping their clients understand shopper behaviour in richer ways.
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