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 just a stone's throw from the Eiffel Tower.
The organizers hope to have 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 is a real traction around the NFTs, there will be people," explains Alexander Tsydenkov, one of the co-founders of the event.
👉 Small disclaimer: The Big Whale is a media partner of NFT Paris
For this second edition, the organizers managed to attract some very nice people in the French capital: the creators of Bored Ape Yacht Club, CryptoPunks, Doodles... All the elite of the NFTs is present.
There's also metaverse giant The Sandbox, digital collectibles champion Sorare and other big players in the industry. 💪
But, new compared to the 2022 edition, the big "traditional" brands are also present. Some like Samsung are sponsors, and others like Lacoste, LVMH, Adidas or PMU have sent teams for the event.
"Web3 represents a profound cultural change, it transforms the way we create and own things," says Erika Wykes-Sneyd, Web3 manager at Adidas (read her interview).
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"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 companies in the world of NFTs illustrates the evolution of a market where we no longer speak only of digital art 🎨. This trend is also reflected in the numbers.
According to Laurent Issaurat, Head of Art Banking at Societe Generale Private Banking "more than 80% of NFTs purchased in 2022 were related to something other than artworks, such as profile pictures 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: innovate, build customer loyalty and reach out to new audiences. All this with a great community strategy. In simple terms, 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, when others offer the digital duplicate of a physical product as Adidas did 👟 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 minutes - were able to pick up exclusive merchandising from the three-stripes brand.
In a different vein, the Dom Pérignon house (LVMH Group) 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 the blockchain.
"The market was booming at the time, LVMH was launching its first NFT, and the craze was there. The NFTs were immediately sold out," explains Adrien Ohannessian, founder of Renaissance, a creative studio that assists brands in their Web3 experiences. He has worked on projects for Renault and the Swiss watchmaker TAG Heuer.
NFT holders: a heterogeneous public
What is the profile of those who are ready to switch to branded NFTs?
It is very varied!
There are obviously the collectors of the first hour, those who have the codes of the Web3. Those will mostly target the collections of very exclusive brands. "They are often crypto-millionaires. The value of their portfolio and their knowledge of Web3 allow 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, which includes 10,000 NFTs, is worth more than $1 billion. American jewelry brand Tiffany & Co, which was 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 NFT holder can afford a branded pendant featuring their CryptoPunk. The price of the pendant? $50,000 😅
The population that can afford such gifts is obviously limited. The vast majority is divided between less sophisticated investors and consumers who have come to the Web3 out of curiosity about these new digital formats and 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 are working on precisely those solutions that make the journey obvious for consumers and brands," 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 in fact, it works. In recent months, there have been countless branded projects despite the bear market in cryptos.
"Brands have reached saturation point in their customer acquisition expenses in the current ecosystem. Web3 is an Eldorado for them, giving them all the latitude they need to promote their story, their know-how and their creative strength directly to their target, without intermediaries," explains Adrien Ohannessian.
A CSR strategy
In addition to these three axes, the NFT can even serve a brand's CSR commitments, i.e. their consideration of environmental, social, economic and ethical issues in their activities. 🌍
Evian decided to partner with artist Sara Shakeel to create a series of NFT works that echo the brand's alpine heritage, as well as its commitment to sustainable development by opting for the Tezos blockchain, considered one of the most energy-efficient.
The good idea? Evian 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 must keep in mind that investment and branded NFTs are antinomic. It would be like 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 this should not be the leitmotif," he tempers. 💸
Case study: Lacoste vs Porsche
One of the examples to follow is surely Lacoste 🐊, whose sale in June 2022 proved to be a success as the 11,212 NFTs of the collection were sold out in less than an hour.
Each NFT was offered at an "acceptable" price (0.08 ether, equivalent to 80 euros at the time of the operation) and allows to participate in the co-creation of clothes in collaboration with the designers of the brand.
The coins are of course reserved... for the holders of the NFTs and very limited edition products.
"We came in with a lot of humility in order to understand the ecosystem, learn how to use blockchain and deliver a quality experience," says Benjamin Cornut, director of social and Web3 experiences at Lacoste, which just won the "Web3 Award" for "Web3 Corporate Project of the Year."
Here the price of the token has not soared (it is currently worth 0.05 ether, or 77 euros), but the team of a dozen people (all trades) continues to deliver.
Nevertheless the risk is also to take the feet in the carpet, as Porsche and its collection of NFT dedicated to the iconic model of the 911. Criticized for its excessive price positioning (0.911 ethers, or about 1300 euros at the time of the operation), the collection was finally limited by the brand to 2363 pieces, instead of the 7500 planned, to avoid the flop.
The reason? Little community effort, very meager utilities, and the bet that users will jump on it only because of Porsche's prestige. 🚗
"To successfully launch a collection, you need several things: a price that corresponds to the market, an attractive design and an active community. But Porsche has not met any of these elements," says Stéphane Baudin, a specialist in the marketing analysis of NFTs collections.
A hard-won lesson that should serve as an example for future brand experiments.