E-commerce is phenomenal in this new era. Many traditional enterprises consider digitalization and e-commerce as elixir to save their declining businesses. But it is infeasible to only develop either an online business or an offline business. What enterprises need is to integrate online and offline organically and develop a mature ecosystem, that is called O2O (Online to Offline).
O2O is easier said than done. It is difficult to transfer the offline business model directly to online, vice versa. Let’s go through the journey together: you aim to maintain your customers in your ecosystem, so you implement online promotion which drives consumers to do shopping at your physical store; then they purchase and settle transaction, and hopefully they will return to the online shop to start the next 'consumer journey'. There are two major challenges of this O2O journey: first, how to reduce the churn rate of existing customers in the conversion process; second, how to attract new customers or increase the motivation of existing customers to keep going in the cycle.
The story of 'Shiyun fried chicken shop' is a good reference for companies that aim to develop O2O marketing leveraging NFT.
Founded in 1984, Shiyun fried chicken is such a popular tuck shop in Taiwan. With the rise of NFT, Shiyan seized the opportunity and issued Shiyuan fried chicken NFT on the OurSong platform. Under the eye-catching title - 'The world first fried chicken NFT shop', the shop effortlessly acclaimed the title of 'world's first'. The NFT series Shiyun issued comsists of 8 'dishes' including fried squid, eryngii mushroom, fried chicken, green beans, etc. The initial bidding price of each 'item' is 1 OSD (equivalent to one U.S. dollar), and the total quantity available is between 80 and 500.
With this innovative idea of combining fried chicken and NFT, this series was destined to be popular as reflected from its positive sales: on the first day of sale, one of the fried chicken was almost sold out; the price of another fried chicken dish has increased by 13400% to 135 OSD. The result showed that the new attempt of Shiyun not only gained the PR buzz, but also earned revenue from selling NFTs, let's call it 'killing two birds with one stone'.
All these things, however, were just side dishes. The real magic of this NFT campaign lies in the 'owner's guarantee'. According to its white paper, every time when a new transaction is made by reselling the fried chicken NFT, the new holder of the NFT can redeem that product at the physical store. And the NFT need not to be returned to the store. That is to say, if A buys the green beans NFT, he can go to the Shiyun store to get one free green bean; if A then sells the green beans to B, B can go to the store to get a free green bean, and so on.
What Shiyun did was actually using the NFT as a tool to extend the online promotion and drive the customers to visit the store. With the continuous resale of NFTs, the effect of driving traffic to the store will keep on going, and this 'automation’ helps save the promotion and time costs required to maintain the popularity. NFT holders also become the 'promoters': they are attracting people to purchase their NFTs, and introducing more potential customers.
Although NFT can be used to redeem goods, the authenticity verification feature of the blockchain prevents Shiyun from getting involved in the cumbersome administrative procedures of issuing 'redemption coupons' in the real world. Oh, yes! You may lose customers during the process of buying and selling from NFT and physical store redemption. For instance, some people only buy NFT but do not redeem the fried chicken in the store, but, please be reminded that in this new type of O2O, the churn rate no longer means loss: if the NFT keeps circulating in the market but no one comes to the store to redeem the free gifts, Shiyun still receive royalties fee in the transaction. In this sense, does the 'churn rate' mean loss?
Shiyun fried chicken has demonstrated one of the many ways of NFT business application. More and more companies will definitely follow what Shiyun had done. With the rise of different NFT applications that are linked to the real world, O2O will become more and more feasible.
