Welcome to Digital Twin, we help you get a little smarter about the NFT market and its impact on the future of fashion, commerce, and culture.
Digital twins are becoming more and more prevalent as a way for companies to better understand and engage with their customers. But what ARE digital twins, and why should you be paying attention? In this blog post, we’ll break down everything you need to know about digital twins, including what they are, how they work, and why they’re so essential for businesses. Stay tuned – by the end of this post, you’ll be convinced that every company needs a digital twin!
What is a Digital Twin?
Let’s start with the basics…what does a digital twin inherently mean? A digital twin is a virtual model designed to accurately reflect a physical object. In the blockchain space, our studio is focused on working with brands that want to link physical products to their virtual versions.
Lets cover some of the use cases
1. Connected Products
The idea of a ‘digital twin’ to accompany your physical product is opening up a whole new world for brands and their customers. Various brands are testing this market with Nike announcing the redemption of physical versions of digital “Space Drip” sneakers through Rtfkt, the experimental startup it acquired last year. Rtfkt came up with a mechanism known as “forging”, which basically means someone can redeem their NFT for a physical pair of shoes during a set window of time which closed on June 15th of this year. RTFKT co-founder Steven Vasilev Zaptio also emphasized how this drop democratized access to artists who were able to express their creative work through the “Space Drip” collection.
Why Space Drip was a monumental project where the Creators won 🏆 🧶— Zaptio RTFKT (@Zaptio) May 27, 2022
I always wanted to express my creativity with sneakers, hence prior to RTFKT I was deep in the 👟custom scene.
My goal was to enable artists to express their vision through sneakers as a artistic medium. pic.twitter.com/ONiFlPY137
The team paired the NFTs with NFC technology, which solves the issues around sneakers with authenticity, fakes, and counterfeiting, because an NFT displays who owns it and who redeemed that shoe on the blockchain. Paired with NFCs, you can use your phone to scan the NFC tag on the shoe. It takes you to a page which confirms the authenticity and shows you the NFT that was used to forge that shoe. This creates a second layer of authentication.
This pairing of physical to digital and vice versa can add value to products and offer a revenue stream for brands in the secondary market. The digital NFT enables provenance and authentication and travels with the good, regardless if the physical item remains connected with the digital. In turn, this generates a network of products, both digital and physical.
2. Loyalty Rewards
Everyday, consumers are faced with a multitude of options whether it’s purchasing a bar of chocolate in a grocery store or buying sneakers online – the options are endless. Now more than ever, it’s critical that brands establish a form of loyalty with their customers in order to acquire and retain them from competitors in the market.
Today, we have all likely participated in loyalty engagement:
- Order a coffee at starbucks → collect stars → unlock free food & drinks
- Sign up for a credit card → make purchases at relevant restaurants, grocery stores, etc → earn points that unlock credits, travel rewards, lounge perks, etc
- Provide your phone number at a grocery store → earn points for each purchase you make → receive discounts on your final bill
Loyalty rewards are a key pillar of a brand’s strategy and customers love nothing more than being rewarded for their consistent behavior. Web3 is making it easier for brands to build and retain relationships with these loyal customers. At Digital Twin Studios we’re supporting brands with strategy and blockchain integration to make it easier than ever to unlock this new ecosystem of rewards. Here’s how the concept of a digital twin can strengthen brand loyalty:
- Consumer makes a physical product purchase online or instores from a brands website and provides their email address
- Customer receives an email with their receipt and a link to claim the associated NFT
- Customer visits claim page of a brands website and connects their digital wallet or signs up under the brand’s custodial wallet to claim the NFT associated with their purchase
- Customer continues to transact with the brand and receives NFT tokens associated with their physical purchases. These tokens begin to collect within the customers digital wallet
- The brand designates a certain # of tokens with an unlock of a reward such as access to a free product, discount or exclusive experience
In today’s loyalty landscape, it’s more important than ever for brands to find new and innovative ways to engage their customers. Digital Twins Studios has partnered with Alo Yoga to create a unique loyalty experience that leverages the power of NFTs. Customers who purchase items from the Aspen Collection will be able to claim the associated product NFTs and unlock real-world experiences from the items’ digital twins. This use case provides customers with the opportunity to unlock access to Alo’s Wellness Clubs and Alo Houses, creating a powerful loyalty loop that drives engagement and builds brand equity.
3. Up Next, The Collectibility Use Case
The collecting of digital assets is a new and exciting phenomenon made possible by the advent of blockchain technology. While the use cases of digital twinning are endless, the ability to collect and trade digital assets is one of the most innovative and promising applications. Let’s take a look at two players changing the way we think about collecting:
BlockBar allows consumers to purchase asset-backed NFTs directly from brand owners–with physical bottles stored in a secured facility in Singapore–customers receive the digital NFT as a proof of ownership over their respective purchase. Once the NFT is purchased, the cryptographic version is held securely by BlockBar with a record of authenticity held on the blockchain. The end customer can choose to redeem the physical product and remove the digital version from the BlockBar ecosystem, trade its NFT version within the BlockBar marketplace or store it in their virtual bar. This model enables customers to avoid the pain points of counterfeit that run high in the alcohol marketplace while also offering collectibility over rare bottle releases that often appreciate in value over time. Whether a customer grows their collection, sends it as a gift, or resells it, authenticity will never be an issue and guaranteed until the moment they decide to redeem the bottle and drink it themselves.
We are excited to announce our partnership with @TheBenriach to bring you this exclusive twinset, including both the Benriach Forty-Year-Old and The Benriach Forty Octave Cask Matured.— BlockBar (@BlockBar) October 6, 2022
Only 10 total twinsets, which include 2 bottles per NFT, will be available on 10.11.22 👀🥃 pic.twitter.com/Hdz2cr5Pl5
The second example of digital twinning enables the physical and digital versions to co-exist. Prada introduced its first standalone NFT project: a collection of limited edition physical T-shirts that come with a matching NFT twin. Since 2019, the brand has offered these limited edition t-shirts as part of its ‘Timecapsule’ collection. However, this offering has extended into Web3 with the inclusion of the digital twin NFT. The brand already is adding NFC and RFID chips to all its projects, which could potentially set up the addition of NFT twins to all products.
Announcing the October #PradaTimeCapsule: This limited-edition, serial-numbered shirt is available for 24 hours (October 6th) on https://t.co/g8xpUrt6hN, while supplies last. It comes with a gifted #NFT.— PRADA (@Prada) October 6, 2022
Discover more at https://t.co/0ZZMaeKL1B pic.twitter.com/XxeO9cHg5Y
This heightens the experience of owning a t-shirt from just a mere piece of clothing, to an authenticated piece from the brand that offers additional reward for the customer. In Prada’s case, customers who participate in Timecapsule drops gain exclusive access to experiences such as fashion shows, private tours, and dining events. Most recently, a lucky holder was flown out to Milan with all expenses paid for to experience the Prada Women’s SS23 Fashion show. The offering of a physical product linked to its digital twin enables a strong counterfeit resisting mechanism – with both the seller and collector having an incentive to maintain the NFT record with the physical item. Either way, the issuance of the digital NFT also provides the brand with additional touchpoints for customers in the secondary market. There are two scenarios that can occur when both the physical product and digital NFT co-exist in the ecosystem.
- The NFT and physical product could be transferred in tandem to a secondary buyer who wants to ensure provenance of the physical product while accessing a brands loyalty rewards through the ‘digital twin’ token
- The NFT could be sold separately from the physical good if a secondary buyer sees inherent value in solely owning the digital counterpart – as it unlocks brand loyalty or offers an experience in a virtual realm
In either case, the brand will gain additional data points on secondary ownership of the digital good. Today, many brands sell their product D2C but only have visibility for the primary sale of their purchase. They will never know if that item is resold on The Real Real and who becomes the secondary owner. In a decentralized state, brands have public blockchain visibility of ownership. If I were to purchase a piece from Prada and then sell my NFT to a friend – Prada has the ability to connect with my friend through their digital wallet. For instance, they could airdrop a token to this secondary buyer and offer a loyalty reward for choosing to purchase Prada products in the secondary market. This revolutionizes the way that brands can interact with secondary buyers, a market that is poised for significant growth in the coming years.
If you’re a brand looking to stay ahead of the curve, focus on digital twins and how they can revolutionize your customer experience. With an ironclad connection between brand and consumer, digital twins are key to the future of product ownership. And with blockchain technology shaping the way we exchange value and ownership in this new world, it’s more important than ever for brands to get on board. Ready to create a digital twin for your business? Let us know – we’d be happy to help!
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