Do non-fungible tokens create long-term value for luxury brands? The effect of NFT promotions on customer equity

Abstract

The potential of non-fungible tokens (NFTs) as promotional devices has gained attention across various industries. Particularly in the luxury goods sector, NFTs are being recognized as potentially valuable tools that can help in obtaining positive marketing outcomes. This study introduces the concept of NFT-based customer equity, which is designed to help understand the relationship between NFTs and consumer behavior. To achieve this objective, this study applies the mixed-method approach, in particular, by conducting in-depth interviews to identify key characteristics of NFT attributes that contribute to positive consumer perceptions—scarcity, resaleability, and trendiness—and following up with a survey examining these attributes’ impact on three dimensions of customer equity. Additionally, this study finds a moderating effect of online community engagement in that those who are highly engaged with NFTs in online forums show higher purchase intention. The findings of this research validate the idea that NFTs can create customer equity for consumers that can translate into increased purchase intention and increase the projected lifetime value of a customer. Practical implications for managers are discussed.