The jury is still out on the long-term value of NFTs as a digital ownership model, but SXSW 2022 was steeped in NFT hype. The conference hosted 20+ sessions anchored in serious consideration of the topic, while in another room NFTs of digital art objects were available (to download) for a price. A quick NFT refresher: “A non-fungible token is a blockchain-housed identifier (or piece of individual code) that represents the terms of a smart contract granted upon the exchange of a singular digital object.
This object could be a virtual property owned in a specific online-only environment (Decentraland), a digitally generated image or musical composition…or the $69 million digital artwork by Beeple that was sold by Christie’s in 2021. A non-fungible object can be duplicated, just as an image of Van Gogh’s Starry Night may appear on that coffee mug in your cabinet, but the value of the original object is not diminished by the process of duplication, and the inherent value of the original is not shared with the facsimile.
If segments of our consumer base migrate to a digital/physical split for either work or leisure, the very human inclination to express economic status, style, and personality will travel with them.
The options for creating and purchasing NFTs are growing. In late December 2021, an NFT vending machine appeared at 29 John Street in Manhattan’s Financial District, installed by the Neon NFT marketplace. The vending machine drops a small box, in the box is a printed card that reveals a QR code representing a registered token. The digital good associated with the token is revealed as a post-purchase surprise. This jackpot experience is not dissimilar from a cereal box prize, but the price to play ranges from $5.99 and $420.69. One assumes that the value of the NFT is commensurate to the price point selected, but the determination of an NFT’s value is speculative by nature.
I don’t think I am going too far out on a limb in suggesting that an NFT vending machine is a gimmick to drive people to explore the Neon NFT marketplace. Still, Neon is following in the promotional footsteps of retailers and brands who have been experimenting with vending machines as promotional or experiential retail in recent years.
- Snapchat leveraged the retro/new-school technology for an experiential retail scavenger hunt. The company placed Spectacles vending machines called Snapbots in various locations that were trackable via the company’s app. The Snap fans who uncovered the machines were not rewarded with a pot of gold, rather they were offered the opportunity to buy a $130 camera-augmented pair of Snap-branded sunglasses.
- In 2017, Uniqlo built a small network of apparel vending machines in cities and airports throughout the United States. The machines, which distributed lightweight down jackets and other layering apparel, could play a similar role to the sidewalk umbrella vendor for the weather-unprepared city-dweller or air traveler.
- Luxury brand YSL has been experimenting with vending machines for a few years. The latest iteration from the legendary house combines a vending machine with a state fair favorite, the magic claw. Consumers can try their luck in the Los Angeles and Paris YSL Rive Droite stores.
Don’t Ignore the Seemingly Ridiculous
I am not suggesting that an NFT vending machine is a future retail channel, rather, it is a signal, reinforced by the intense NFT focus at SXSW, that intangible goods in digital form are gaining a foothold in today’s zeitgeist. Quantifiable NFT utility is in the hype/experimental phase, but as virtual environments evolve, the desire to replicate, transfer, or replace elements of individuality from the human behind the screen to a virtual presence holds a retail opportunity. If segments of our consumer base migrate to a digital/physical split for either work or leisure, the very human inclination to express economic status, style, and personality will travel with them.
Change does not arrive in a straight line, it takes some crazy zigs and zags along the route. An NFT vending machine may indeed be ridiculous, but we shouldn’t ignore the signal it could be sending us from the future.