So you want to launch an NFT. Here are 3 ways to do it.

January 25, 2022 Mary

This week I look into the three big strategies beauty brands look to when launching NFTs, as well as the burgeoning category of semi-permanent tattoos.

Over the last eight months, non-fungible tokens quickly swept the internet and the beauty industry. The excitement — and debate — generated by the possibilities over NFTs has spurred luxury brands like Givenchy, premium brands like Clinique and mass brands including E.l.f. Cosmetics to jump into the space.

While the debate on whether NFTs are a gimmick or represent the future of a decentralized digital world is still raging, what is clear is that brands are quick to opt-in in the name of experimentation. The results of these experiments have revealed three strategies for using NFTs: NFTs as marketing for physical products, NFTs used as engagement and loyalty tools, and NFTs used in corporate-social responsibility.

Below, Glossy broke down each of these strategies, including which brands use which approach and how successful they’ve proven to be.

Phygital NFTs
Even when the focus of an NFT launch relates to philanthropy or engagement, a physical product pairing is almost always part of it. But there are brands where the primary goal is to generate buzz for a physical product. Typically, they create an NFT inspired by the product and offer NFT buyers the physical product on top of their investment.

Brands that have opted for the phygital NFT experience include E.l.f. Cosmetics and Ciaté London. In the case of Ciaté London, it ventured into phygital NFTs based on a product collaboration done with Christin Quinn, a star of the Netflix show “Selling Sunset.” Ciaté London created and sold four NFTs, ranging from $10-$1,000, and buyers received the physical product collection. The physical product packaging was designed by New York-based street artist 1Penemy, as were two of the corresponding NFTs. The other two NFTs were digital representations of the Christine Quinn collection: a Heat Transforming Lip Cream and an eyeshadow palette. Ciaté London partnered with sustainability platform Aerial to offset the carbon footprint of its NFT drop, with the remainder of the primary sale proceeds going to the brand.

Ciaté London sold the NFTs on the Bitski platform, which enables purchasers to use fiat currency (e.g., U.S. dollars) rather than cryptocurrency, thereby opening up the pool of potential buyers. Nora Zukauskaite, marketing director for Ciaté London, said Bitski was chosen precisely for this reason, to provide a more “accessible and democratic” NFT experience to Ciaté London customers, and Christine Quinn and 1Penemy fans.

“We also wanted to tap into a new audience and introduce our products through a creative installation to NFT [buyers], who were possibly not familiar with the brand or fans of beauty,” said Zukauskaite. “NFTs are more of a communication tool versus anything else.”

She added that Ciaté London is now considering tying NFTs to the brand’s loyalty program, a similar strategy that brands like Clinique have employed. In the future, Ciaté London may also partner with female artists to promote women’s participation and recognition in the NFT space. Other brands like L’Oréal Paris have done similarly.

“Because it’s a new area, there’s no right or wrong at the moment,” Zukauskaite said.

NFTs for engagement and loyalty
When entering the NFT space, Roxanne Iyer, vp of global consumer engagement for Clinique, said that the brand was conscious of its wide-ranging Clinique consumers, spanning teens to Baby Boomers. Tying the NFTs to a sweepstakes versus requiring people to bid on or purchase an NFT, provided customers with an easier and more accessible way to participate in the NFT world. Iyer also said Clinique wanted customers to understand why the brand opted to participate in the NFT world and to bring customers into the conversation.

“If there’s a way for us to modernize loyalty and rethink how we approach our current consumer database, that would be interesting,” she said, regarding what motivated the launch. “NFTs are going to be the new membership. Your airline tickets could become NFTs, and your unique relationships with the brand could become NFTs. To me, that’s the future of it.”

People entered into the sweepstakes by signing up for the loyalty program, if they were not already part of it. They then posted on either Instagram, Twitter or TikTok about a person who brought them joy during the holiday period, using the hashtag #MetaOptimist. A panel of judges helped select the most inspiring. Ultimately, three people won a Clinique-molecule-inspired NFT. Winners also received 10 years’ worth of Clinique products. Clinique used its global brand ambassadors Emilia Clarke and Melissa Barrera to announce the winner on Dec. 2, 2021 via video posts across Clinique’s social media accounts.

Though Iyer declined to state how many people are part of the loyalty program, she said that the program saw a 15-20% lift in first-time sign-ups for the program between Oct. 19 and Nov. 2. There was also a 20% increase in social engagement and online searches for Clinique increased 60%. She declined to say how many people participated in the contest but offered that Clinique received 5x more submissions compared to previous contests of this scale.

“Our big message was that, if you’re a Clinique consumer, we value you more than more than anything else,” said Iyer. “That is probably going to be our continued strategy as we get into the metaverse.”

A unique element of using NFTs as contest prizes is the lack of assigned monetary value. Iyer said Clinique wanted to offer control to its customers in determining the value of Clinique molecule NFTs. She sees this as an important pillar in decentralized metaverses and Web3. Given the risk of an NFT selling on the secondary market for pennies and devaluing a brand by association, it is a bold move. Iyer said that Clinique might consider NFTs as a revenue stream in the future. But NFTs have yet to reveal themselves as a viable monetization opportunity within beauty, based on Glossy’s findings, and no beauty brand has attempted this approach yet.

IGK hair care also recently used NFTs as an engagement tactic to promote the launch of its at-home hair-dye collection. In this case, IGK launched a digital scavenger hunt in mid-Dec. 2021, where people who completed the hunt could sing-up to enter into a contest to win an NFT. Anyone who found a clue shared on IGK’s Instagram and TikTok accounts or by its brand ambassadors were directed to a microsite to learn about the color line and encouraged to enter an email to unlock special rewards. The 25 NFTs were inspired by the brand’s 25 hair-dye shade names like “But first, coffee” and “Astrobabe.” Winners, who were announced on January 15, also received an IGK At-Home Color Kit in a shade of their choice, a bundle of core IGK care products, and a personal color or styling consultation with an online IGK advisor. Everyone who entered the sweeps also received a 15% discount on their first Home Color Kit on IGKHair.com. Dan Langer, president of IGK-owner Luxury Brand Partners, said that making NFTs accessible to the public was part of the excitement of the activation and demonstrated that IGK is at the forefront of the digital world.

“It allowed us to create an ongoing relationship with our customers in a way where it was a little bit more novel instead of just marketing or promoting,” Langer said. “It was engaging them in the shades and the voice of the brand.”

NFTs for philanthropy and raising awareness
The third big strategy beauty brands are employing is philanthropy and awareness. Most recently, Valdé Beauty plans to offer up NFTs commemorating its new refillable lipstick system hand-carved from pure crystals. The proceeds from the NFT auction will go toward supporting the brand’s NFT artists and a grant awarding emerging Latinx beauty entrepreneurs. Valdé will host an NFT launch party at the Ainsley Gallery in Decentraland on January 27.

Supporting female artists is a common theme among awareness and philanthropic NFTs. For example, both Nars and L’Oréal Paris minted and auctioned NFTs created by female artists, with partial proceeds directed toward those artists, as a means to elevate women’s participation in a male-dominated sector. Female artists account for less than 16% of the NFT art market and only 5% of NFT sales, according to a November report from art market analysis firm ArtTactic.

On Dec. 13, L’Oréal Paris commissioned five female artists — Amber Vittoria, Arina BB, Hueman, Lili Tae and Puks — to create NFT art. Each took inspiration from the red shades within the new L’Oréal Paris Reds of Worth by Colour Riche range of lipstick, launched in November. The auction took place on the NFT auction site OpenSea from December 13-16. The Artists retained 100% of primary sales. Meanwhile, 50% of the secondary market sales, which can be thought of as royalties, will be donated to L’Oréal’s philanthropic initiative Women of Worth for one year.

“We feel it’s important to identify spaces in which we can make an impact, however small or large, and lead with our values,” said Maude Brunschwig, svp of marketing for L’Oréal Paris. “We don’t think [only] of NFTs versus other [male-dominated] sectors; it’s just one white-space opportunity we saw where L’Oréal Paris can help elevate deserving and worthy women, while also offering new technologies inspired by beauty and worth to the consumer.”

Each NFT began with a $1,500 floor price, with each one selling for between 1.65-4 WETH, an OpenSea cryptocurrency equivalent to Etherium. Etherium’s fiat worth was approximately $4,000 on Dec. 16.

Nars also wanted to draw public attention to female artists in the NFT space. In July 2021, the Shiseido-owned brand launched an NFT campaign celebrating its hero Orgasm blush with a collection of three commissioned NFT artworks by female-identifying artists on the platform Truesy. Truesy is a smaller NFT marketplace trying to appeal to consumers outside the typical NFT crowd, per Vogue Business. According to Glossy’s previous reportin g, the first piece, by contemporary collage and crystal artist Sara Shakeel, was available for free in an unlimited number starting in late July. It was followed in early Aug. 2021 by another open-edition piece for $50 by fashion designer and multimedia artist Azéde Jean-Pierre. A $500 limited-edition piece by electronic music artist Nina Kraviz then went on sale on Aug. 4.

Purchases of the Jean-Pierre and Kraviz pieces came with physical makeup. With the $50 NFT, buyers received a limited-edition jumbo Orgasm blush and lip balm. The $500 piece included a makeup set for cheeks, lips and eyes called “The Ultimate Orgasm Bundle.”

Before Nars, Givenchy Parfums partnered in June 2021 with London gallery owner Amar Singh and a group of artists called Rewind Artist Collective, aimed at addressing the gender and minority imbalances. The hope was to sell 1,952 copies of a digital artwork on the platform VeVe. Sales supported the LGBTQ+ charity Le Mag Jeunes association. All copies sold out in mere seconds, and ultimately $128,000 was raised.

“Givenchy is avant-garde about digital,” Edwin Sberro, founder of fashion and beauty magazine Exhibition, told Glossy last year. Sberro worked with the brand as a consultant on the project. “They love to explore. They love to create new territories.” He added that the NFT campaign “was a new opportunity for the brand and the digital world to do something different for a beauty brand.”

Semi-permanent tattoos gain momentum

On Jan. 19, BIC, a manufacturer of disposable consumer products including lighters, razors and pens, acquired Inkbox, a semi-permanent tattoo brand. The $65 million purchase broadens BIC’s skin creative portfolio, which already includes temporary tattoo marker brand BodyMark by BIC. Inkbox’s semi-permanent tattoos are skin-safe and easy to apply and can last up two weeks. Individuals can create custom designs or choose from 10,000 artist-designed tattoos. Inkbox was founded in 2015 by brothers Tyler and Braden Handley. The company is based in Toronto, Canada.

“Consumers today crave newness, desire creative freedom and embody authenticity,” said Gonzalve Bich, CEO of BIC, in a press release. “Inkbox’s temporary tattoos and markers empower individuals to be their continually evolving, fluid selves. The acquisition… [brings] more innovative and high-quality tools to individuals who are not afraid to showcase who they truly are.”

In July 2021, another semi-permanent tattoo brand called Ephemeral raised $20 million in funding four months after launch. It offers a proprietary tattoo ink that the body metabolizes, with tattoos disappearing in about a year. The company has two locations, in Brooklyn and Los Angeles.