NFTs, or non-fungible tokens have hit the headlines in recent times. But what are NFTs and how can retailers benefit from them? We spoke to Marc Sach, Director of Fuzzballs, about everything you need to know about NFTs in retail, his journey creating NFTs for his brand and the brilliant characters that have proven popular in the Fuzzballs comics, retail merchandise and social media stickers.
1. What are NFTs and how do they work?
“NFTs are a bit of a strange concept to get your head around at first but the technical answer is NFTs are non-fungible tokens which use the block chain, similar to bitcoin and other crypto currencies which are also on their own versions of the block chain. The block chain basically keeps a receipt of every transaction ever made and is how the crypto world runs in the way it does.
“Non-Fungible basically means can’t be replaced, or unique. But a simpler way to think of them is like baseball cards, so if I trade a unique baseball card for something, I’m going to get back something completely different. Whereas a bitcoin is fungible and can be traded for another bitcoin, giving you the same thing back.
“NFTs can be anything from a picture, to sound to video to whatever you can create digitally. You can create an NFT by a process called ‘minting’ and then you can sell or give away that NFT. Whilst each NFT is unique, you can have multiple editions of an NFT, just like a baseball card. So some NFTs may be rare and only 1 exists, whilst others can have thousands of editions of that NFT, each unique in themselves eg. Edition 0001/1000.
“There are some of misconceptions about NFTs, thinking that just like bitcoin, they are bad for the environment. Whilst Bitcoins use a lot of energy to create and use (they use a process called Proof of Work) most NFTs are not on the bitcoin blockchain, but other ones like Tezos which use a process called Proof of Stake which are much less energy-intensive to create, and about the same amount of energy is used posting a tweet as making an NFT in these cases.
“There are multiple ways to look at NFTs from a way to sell digital art and show ownership of it, to gaining access to exclusive content such as digital products in video games to even being able to track the sale of say a rare trainer. NFTs are more than just a jpeg, they can give you access to things a jpeg couldn’t.”
2. What made you decide to get involved with NFTs?
“NFTs became a thing I’d heard around 2016 when Cryptopunks NFTs were launched. These were a series of 10,000 generated images of pixelated punk characters. This was a crypto art blockchain project and initially they were given away for free. But over the years people started to see value in these pieces of art and by 2020 a lot of famous brands and artists had started to explore the NFT space. The likes of the NBA, WWE, Marvel, artists like Beeple and even memes like Nyan Cat, Disaster Girl and even the first tweet had been launched as NFTs that you could own.
“This intrigued me as Fuzzballs has a huge cast of characters and artwork that not only has been super popular in our comics and retail merchandise but especially as social media stickers. To date, over 700 million Fuzzballs social media stickers have been used on Facebook, Twitter, Instagram, Line and many other platforms. So the idea hit me, people love the social media stickers but what if they could own one of them. Fuzzballs fans love the cast of adorable characters and really relate to them individually. For example they like Timmy Tiger because he is a little silly and clumsy or perhaps they like Whisky Cat for her love of junk food and video games and will buy the matching merch. But it goes much deeper than that with fans loving in particular certain drawings that really relate to them because they see themselves in that characters moment. What if they could own that one drawing that defined them. They already do it with the merch, wanting to own certain characters or moods, so why not be able to do the same with the social media stickers?
“This is where a friend introduced me to an NFT marketplace called Kalamint.io, which specialises in artist-based NFTs. We discussed some ideas and a small initial launch was created in September 2021 to see how fans and the NFT space would react, I priced them low so any fan could be involved in owning a piece of Fuzzballs history. We were blown away at the response with all 50+ NFTs selling out as instantly as they were minted and then reselling on the second-hand market just as quickly to those fans that didn’t want to miss out on owning one. It has been a rollercoaster seeing new fans come on board and people wanting to own a unique piece of Fuzzballs that is exclusive to them and being a part of the Fuzzballs NFT Community.
“I always like to explore new trends and if Fuzzballs can be one of the first doing something then I’ll try it and see how the fans and world react. Certainly, a lot of our products and even designs come about that way, listening to our audience and the market and seeing if something works and takes off.”
3. How can retailers benefit from NFTs?
“We’ve had lots of discussions with various manufacturers and licensees who are interested in how they can work with NFTs in retail. From the manufacturing side, there’s lots of fun things they can do, from NFT certificates showing that a limited edition product is the genuine thing and what edition it is, to giving away NFTs with plush toys that allow you to own a digital version of that plush toy in a mobile app. For retailers, NFTs can give you exclusive access to content, communities or even things like pre-sales. What makes NFTs more interesting is the community aspect.
“Certainly, Fuzzballs fans love to hang out in our Facebook group and chat about the characters and products they are a fan of. The NFT audience is into this in an even bigger way. They love to show off their collections, much like baseball card or Pokemon collectors, showing off that they own a certain Fuzzball variant (eg. Whisky Cat in a Dinosaur costume eating pizza), or looking to swap or trade as their mood changes. They’re really good at marketing for you too, using their NFTs as profile pictures on Twitter and really want to get involved in what becomes a really happy and loving community of passionate fans.
“Retailers can benefit a lot from adding NFTs to their existing ranges, especially if they create a community around it that can get access to things and be a part of like product launches or new announcements.”
4. What are the stages of launching your own retail NFTs?
“I think the stages are different based on what you are trying to do with them. If you are an artist looking to sell your digital work, the stages will be different to Marvel who are looking to sell an NFT comic. Are you looking to sell retail NFTs or give them away? Are you trying to offer a digital product, or create a community or access with them? There’s a lot of different variables to think about first, but ultimately whatever path you go down it is fairly simple to launch with.
“To answer this simply though, you firstly need something that you want to make as an NFT. You’ll need a platform to mint it on and of course, an audience who want it. NFTs may sound different and unique but they are no different than selling or buying digital music, video games or films. You are basically buying or selling digital content so the same steps for those apply to NFTs in retail as well.
“There’s a lot of people launching NFTs, but without a fanbase, you’ll have difficulty selling or giving them away. So Fuzzballs was lucky in that we have a large fanbase of passionate fans, as well as the help of Kalamint.io to help us launch our own retail NFTs.
“Retailers obviously will have their own fanbases and this is how especially bricks and mortars retails can help bring customers back to their stores by building a community around them.”
5. What is next for Fuzzballs?
“There are a lot of plans for Fuzzballs. In the retail space we have some big launches coming up with some exciting new retailers and licensees I just can’t wait to announce, as well as our Christmas product launches and so many plans for 2022 including plush toys.
“But for NFTs, our next drop will be a big one. We will be launching over 3,000 NFTs hopefully later this year featuring a huge range of Fuzzballs artwork, including unique one of a kind hand-drawn pieces as well as a bunch of algorithmically-generated pieces and of course fan favourites too. We want as many fans to be able to own a unique Fuzzballs NFT and with that become part of our Fuzzballs community. There are lots of plans for these retail NFTs that will gain you access to community features and special rewards that are only available to those that have Fuzzballs NFTs. Certainly, we’ll be following other popular NFTs liked Bored Apes Yacht Club, Crypto Kitties, Rocket Monsters and more in what we can do to give back to the Fuzzballs community and beyond. Keep an eye on our twitter.com/fuzzballs for all the updates on our NFT launches.
“Beyond 2022, there’s more NFT plans from collectable cards to comic strips and NFTs will be seen as just another extension of our merch range, just a more digital one that you can own and share online. I certainly want to tie retail NFTs into our physical products too, for example, if you buy a shirt, you get an NFT of it for free to use somewhere else and I think that is something our licensees and retailers are very keen to explore with us too as the Fuzzballs brand grows and spreads into other markets.”
Holly brings a wealth of experience in both print and digital publishing. As Modern Retail’s Content Editor, Holly is passionate about helping independent retailers to thrive in today’s ever-changing market.