Clinique is today becoming the first Estée Lauder brand to offer an NFT in a bid to drive loyalty and add marketing weight to its top products in a sign of more purposeful brand uses of non-fungible tokens.
Instead of selling NFTs, the beauty brand is giving shoppers who are signed to its rewards scheme the chance to receive free products for 10 years along with one of three editions of an NFT artwork. Called “Meta Optimist”, the NFT is a conceptual “molecule” that changes colors based on two of its most popular products: the Moisture Surge 100H moisturiser and Almost Lipstick Black Honey, a 50-year-old product that sporadically goes viral on social media thanks to its sheer colourway that claims to suit every skin tone (pictured at top).
People enter to win by sharing “stories of optimism” on Instagram, Tiktok and Twitter: the three winners receive Black Honey (often out of stock and currently unavailable), in addition to once-yearly physical products. For added excitement, the winners will be announced on social media by actors Emilia Clarke and Melissa Barrera, Clinique’s ambassadors.
Since this summer, fashion and beauty brands have been rapidly experimenting with various approaches to non-fungible tokens, which give digital items unique identities that enable scarcity and ownership. While the first wave of brand-created NFTs largely focused on creating and selling or giving away digital artworks, the industry has recently been entering a new phase of brand-created NFTs. Now, brands are connecting NFTs and digital products with more perks attached to them beyond collectible works of art, including building and rewarding loyalty, granting special access and promoting physical products.
By opening up NFT access only to its loyalty programme members, Clinique is both rewarding membership and incentivising others to join via sign up. The project was an effort to “modernise loyalty,” says Carolyn Dawkins, SVP of Clinique Global Online, consumer engagement and product marketing. “As we started to frame up this opportunity, sure, we could turn up with a piece of art with something that's sellable, but it's honestly not even where the NFT direction is moving and it's not really connected to our brand. It’s rewarding the consumer for being so loyal and giving something back that transcends just a digital opportunity.”
Cathy Hackl, chief metaverse officer and CEO of Future Intelligence Group, worked with Clinique on the strategy for this drop. “Clinique's approach is unique because it's focused on social currency, so the way to interact is via stories. It's not necessarily for free. It empowers Clinique's loyal fans to be able to use their content as a gateway into the metaverse,” she says. “We wanted to focus on the utility of the NFT, engaging the community and creating value both virtually and physically.”
Clinique is not the only brand to tie NFTs to physical products. Other brands include physical items with purchases of NFTs, or build perks on top. This week, Jimmy Choo will auction its first NFT through the Binance NFT marketplace. In addition to a digital sneaker created with artist Eric Haze, the winning bidder will also receive a pair of sneakers. Hugo Boss recently introduced a Tiktok challenge in which people could win five unique Boss x Russell Athletic NFT jackets, as well as a physical twin, which comes with a QR code that enables the person to wear it in AR. The campaign set social media records for the brand, with 3.1 million consumer-generated #Bossmoves videos and more than 7.5 billion views. The project was part of new CEO Daniel Greider’s initiative to “become the leading premium tech-driven fashion platform worldwide”.
“NFTs have seen a lot of hype recently, but they are still not accessible to the average consumer. Therefore, we decided to combine the digital element with our physical product, bringing the consumers closer to the NFTs and adding a new dimension to the brand experience,” Greider says. “By integrating the NFTs as a reward into our Tiktok challenge, we excluded the complexities of cryptocurrency and democratised the virtual products.”
Also this month, lifestyle brand Axel Arigato partnered with “metaverse-commerce” game Aglet to provide consumers with both physical and digital shoes. Players who reached a certain in-game threshold could win physical shoes, and people who went to stores and showed that they were wearing digital Axels in-game received a pair of physical socks.
The biggest opportunity for the growth of physical goods sales is virtual goods, says Ryan David Mullins, Aglet’s CEO and creative director. The underlying thesis of Aglet, which uses location-based gameplay (similar to Pokémon Go), is the convergence of online and offline worlds, in which owning something physical increases desire for the virtual version, and vice versa, Mullins says. “It's a new phase because it requires a mental model shift from, ‘There are physical goods in material reality and then there are virtual goods in virtual worlds.’”
Engaging with brands has become gamelike, he adds, especially in hype-driven markets like sneakers and streetwear. “You're competing against other consumers to capture scarce goods, so loyalty and membership programmes are about how a consumer moves in the ecosystem of your brand.”
Loyalty programmes have become increasingly important as access to third-party data has decreased. Since introducing its Smart Rewards programme in 2016, Clinique has found that it increases activity, frequency, conversion and average order values, Dawkins says. “In a world where we move to cookieless targeting et cetera, the value is enormous. When we have our consumers inside the loyalty programme, the amount we can personalise is different, whether it’s the site or email or sms, and how we take our services to that consumer is really different, because we are able to curate their data with so much more richness.”
Tech-centric fashion brand Vollebak is selling NFTs of a jacket in its virtual store on metaverse platform Decentraland; people can pay more to also get a physical version of the jacket. Creative agency R/GA, which is working on the project, called it “direct-to-avatar,” or DTA, and now, says R/GA head of creative Nick Pringle, it’s “DTATC,” or direct-to-avatar-and-consumer. People can buy the NFT without the physical version, but can’t buy the jacket without the NFT first.
“You want to encourage lots of people to have the experience, but not everyone necessarily is going to want to buy a physical jacket,” Pringle says, adding that the notion of a digital wearable could unlock a higher tier of membership. “At this point it's kind of hard to grow an audience and grow behavior. So if I now own the jacket, when I return to this concept store, it could unlock a different experience, or say, a queue-jumping experience. It’s a mistake to think of an NFT as just a piece of art; it’s a piece of code that unlocks a series of functions.”
Another perk of giving away NFTs through a social media competition — aside from the organic content it generates for the brand — is that it makes the process of acquiring an NFT much more accessible to the average consumer, says Roxanne Barretto Iyer, Clinique’s VP of global consumer engagement. “We thought a lot about how we bring consumers on this journey of innovation, because the barriers to innovation can be really high.”
Customers who win one of the NFTs can decide if they want to sell, trade or keep their NFT, but it was important to not assign it a monetary value, Iyer says. “Once we give it away to the consumer, it is theirs,” says Esteé Lauder Companies chief information officer Michael Smith. The Clinique NFT is issued using Polygon, an interoperable scaling solution for Ethereum, which consumes less electricity than many other blockchains, he notes. People can hold on to the NFT (and its accompanying rewards), or they can independently choose to price and sell it on an NFT marketplace. “They'll have to have a digital wallet, which we can help them set up, but the consumer and the marketplace really drive the value. They're really timeless assets, and they just happen to live in the digital world, so just like any rare asset, I anticipate that will go up in value over time.”
In keeping with the loyalty play, brands can add benefits of owning a branded NFT over time, enabling the NFT to essentially serve as a membership card for future events or promotions. Animated celebrity company Superplastic, which has partnered with Gucci, is adding on special perks for owners of NFTs that it sold earlier this year, in addition to giving customers tokens. Perks tied to these NFTs include special access to both online and physical stores, and an in-progress restaurant in Miami.
“Essentially what we're saying is, if you collect some of our NFTs or you have some tokens, you're probably an uber fan of ours and we are going to reward you for being awesome and supporting us and being really into what we're doing. It’s not so much about trying to make a shit ton of money, ” says Superplastic founder and CEO Paul Budnitz.
Smith says that the industry overall is just “scratching the surface” of how NFTs can be used. “We're looking at this opportunity with Clinique as a strategic learning moment for the company, for all of our brands. It's the first stop in what is going to be a journey to say, how do we really engage with digital for consumers?”
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