A new way for brands to reward loyal customers

by James · September 15, 2022

Of CNBCTV18.com September 15, 2022, 3:50 p.m IST (published)

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CNBC-TV18 explains what POAP NFTs are and how they work.

NFTs have grown tremendously in popularity in recent years. They have quickly moved from a relatively unheard of asset class to a fast moving and lucrative space that almost every artist, celebrity and brand wants to tap into.

The exploding sales figures of the NFT industry are proof of this rapid growth. NFT sales reached a whopping $40 billion in 2021. This year, NFT sales reached $42 billion in the first six months alone. The growing popularity of NFTs has also led to several new offshoots of the technology, one of which is POAP NFTs.

This new addition to the digital asset class has its own history of evolution. POAP NFTs have only been around for the past couple of years. However, they have quickly transitioned from a simple form of memorabilia to being used by some of the biggest brands as a means of appreciating loyal customers. Follow along as we explain what POAP NFTs are and how they work.

What are POAP NFTs

In the past, concertgoers or event participants would secure ticket stubs or posters as reminders or proof of attendance. But with the rise of the metaverse and Web3, things are bound to change and POAP NFTs are here to lead the way.

The POAP website describes these digital assets as “the bookmarks of your life” that are “stamped to celebrate life’s remarkable moments.”

Short for Proof of Attendance Protocol, POAP NFTs act as digital memories or memories. The POAP platform allows event organizers to better engage their audience by offering them customized digital souvenirs in the form of NFTs.

Those who receive POAP NFT have bragging rights to the places and events they have been to. On the other hand, the organizations issuing these NFTs now have an accurate way to track and engage their most loyal audiences, and this is where brands come into play.

How can brands use POAPs?

Brands like to reward loyal customers for their interaction with the organization. They may provide exclusive offers, additional discounts, or the first release of a product line to customers who regularly attend their events, participate in their online contests, and actively engage in other such activities.

However, brands rarely have an accurate way to track who attended and participated in such events. Therefore, without any way to prove attendance, it is extremely difficult to reward the right customers. This is where the POAP NFTs come into play.

Brands can partner with POAP to distribute custom NFTs at their events. These NFTs help track the brand’s most loyal customers. Customers who collect more of these NFTs are those who actively participate in brand-related activities.

Hence, these innovative NFTs help brands track and reward the right customers. They also allow brands to create a collection of unique NFTs for specific events. While these NFTs are distributed for free, their exclusivity can create rarity over time, translating into monetary value on the open market. Therefore, POAP NFTs can also act as a means to stimulate customer participation.

Brands using POAP

In April 2022, Warner Music announced its partnership with POAP. Through this partnership, the music company will issue POAP NFTs to attendees of music events starting with the concert of rapper Kevin Gates. “POAPs give artists and fans new ways to hold on to moments that are shared forever,” said Warner Music’s official press release announcing the partnership.

The footwear giant Adidas has also collaborated with POAP. Adidas took a different approach with these digital assets. Instead of issuing POAPs to commemorate a specific event, they used them to reward their most loyal customers who used the “adidas CONFIRMED” app. The NFTs often served as a ticket to future events and exclusive drops.

More recently, multinational cosmetics brand, Estée-Lauder issued exclusive POAPs for Decenetraland’s Metaverse Art Week. The event took place from 22nd to 28th August 2022. POAP can be picked up at three different stations at the venue and will provide exclusive access to upcoming Web3 releases from Estée-Lauder.

Conclusion:

As of April 2022, more than 4.5 million POAP NFTs were issued to hundreds of thousands of collectors and customers. The POAP platform has also tied up with some of the leading brands in the world, including Adidas, Budweiser, Coach, Lollapalooza, US Open, TIME Magazine, FOX and more. With such rapid growth, POAP NFTs seem like they are here to stay.