2PM - No. 736: A DTC Country Club

NFTS / Real Money: The price of admission is the cost of the NFT. And that's a one-time cost. 

Short Analysis: When 2PM Executive Member and CPG investor Magdalena Kala first explained Bored Ape Yacht Club as a social signal, I balked. That was months ago and she was right. The key ingredient to any social club is FOMO and FOMO is exactly what many consumers feel right now - me included. Who needs a Country Club membership to signal upward mobility when your Twitter avatar does that for you. Look at this recent tweet by Shopify App entrepreneur Dennis Hegstad, for instance. A year ago, few of us would be able to conceptualize this. The "social signal" class of Non-Fungible Tokens is one that you're going to want to study. Not only will its social impact have an effect on the burgeoning world of online community (ahem, the metaverse) but it will play a substantial role in brand retail. 

There is a chance that your favorite brands will build NTF-based social circles of their own and these tokens will be the buy-in. This strategy won't just be for the traditional brands, Shopify recently enabled NFT sales on its platform to much praise from the cryptocurrency community. The timing couldn’t have been better as brands look for new ways to foster community (and revenue) amidst supply chain and COVID disruptions. I explained as such in The Digital Supply Chain. 

NFTs have always been tied to access. The purchase of a digital good mystifies some who don’t understand the real-life value of an old YouTube video or NBA clip. It makes more sense when you think about NFTs as gateways to digital communities steeped in exclusivity. Today's feature report explains the idea of the NFT boom facilitating the era of the “digital country club”.

​​People are buying community. People are buying access to events and experiences. The most successful projects have been about creating a community. Think of it like a digital country club. The price of admission is the cost of the NFT. And that’s a one-time cost.

Country clubs have always been places where members can flaunt status and mingle among a select group. NFTs are making that possible for an internet-bound generation. That’s playing out across platforms in a number of ways. CryptoPunks, a collection of unique character avatars on the Ethereum blockchain, is now allowing users to rent out their avatars, essentially opening up a revenue stream while granting access for a limited time to newcomers. The idea that NFTs were crashing as an asset class is beyond laughable at this point.

NFTs will continue to underscore the exclusivity and accessibility of the community while giving outsiders a glimpse inside the world they’re now vying to enter. There are a number of retail applications, here. As mentioned above, there’s also a clear tie-in to luxury brands, whose value is steeped in exclusivity. Burberry and Louis Vuitton have both recently launched NFTs in gaming worlds where insiders are in the know and outsiders don’t get it. Within these digital worlds, status blooms when you can buy a digital luxury skin.

Through these NFT plays, access can be teased and played with. New experiences will unfold only for NFT holders. This will become a sign of brand loyalty, a new meaning for VIPs. Shopify’s recent move will open up NFTs to more mainstream merchants, but there’s still a level of knowledge, resources and commitment one must have to get involved. From there, fear of missing out unfolds.

Hilary Milnes and Web Smith, 2PM

Status monkeys

B. NFTs / Packy McCormick: Before the full Metaverse arrives, there’s already something happening that’s bigger than jpegs. NFTs are starting to feel a lot like a new kind of social network that sits above other social networks and communities — something of a Superverse — and there’s no better framework to evaluate a social network than the one Wei put forth in Status-as-a-Service (StaaS).

Editor's Note: Packy is always ahead of the curve with his approach to analysis. Read here if you want a deep dive. 

As Coca-Cola auctions its first NFT, more brands are entering the metaverse

C. Metaverse / Forbes: Coca-Cola is just one of numerous notable brands experimenting with NFTs this year. On Wednesday, Campbell’s worked with artist Sophia Chang and the shoppable video app NTWRK to create an NFT collection that celebrates the soup company’s newly designed label. And while Taco Bell was among the first to jump on the NFT wagon when it released a series of “limited edition” taco NFTs, even luxury brands like Dolce & Gabbana have released their own high-fashion NFT collections as recently as this month.

Updated August 9: Shein remains No. 1 for the fourth week in a row. Away, Cuts Clothing, and Summersalt break into the top 20.

Super Mario Bros. sells for $2 million, another record for gaming collectibles

eCommerce / New York Times: Rally bought the Super Mario Bros. game for $140,000 in April 2020, and investors shot down a $300,000 offer for it last year. The $2 million offer from the anonymous buyer — a collector who is “making big bets in the video game space” — won the approval of three-fourths of the game’s investors, Mr. Petrozzo said.

The chip shortage is getting worse

Supply Chain / Recode: Apple CEO Tim Cook warned last week that a limited supply of semiconductors would hurt sales of iPhones. Microsoft is struggling to make enough Xbox consoles and Surface laptops. Elon Musk told a court last month that the chip shortage meant Tesla would only be able to manufacture about half as many Powerwall home batteries as it thinks it can sell. One San Francisco sex toy company even stockpiled microcontrollers to fend off future supply chain problems.

VCs are financing an economy of servants

Gig Economy / Sifted: 10-minute grocery startups are the newest wave of VC bets on human laziness, after taxi-apps — Uber, Lyft, Via — and meal delivery — Grubhub and DoorDash in the US, Deliveroo and Just Eat in Europe. VCs have ploughed hundreds of millions of euros into these companies in 2021 alone. But this is more than just the most recent unicorn-bubble fad. It’s bringing us one step closer to living in a servant economy.

By 2PM: Read The "Parasite" Economy to grasp the cost of the proliferation of the eCommerce economy

We’ve set the precedent where last-mile workers and drivers are without the benefits that the market would expect of hard workers. The growth of the online retail industry is critical to local, national, and global markets. But it does not need to be this way.

The ultimate guide to social commerce

Linear Commerce / The Sociology of Business: Powered by Instagram Checkout feature, social commerce means buying from people we follow, rather than going to actual stores and brand websites. Quite an oxymoron, social commerce represents the ultimate merger of money and influence, economy and culture, self-monetization and self-promotion. It turns consumption into creativity and blurs the boundary between buying things and making things. It promises to create economic value while simultaneously making us feel socially valuable.

Meet the "genuinfluencers" who don't want to sell you anything

Brands / Vogue Business: Emerging platforms such as Clubhouse, Discordand Substack not only encouraged quality content that people would be willing to pay for, but it also gave way to a new group of individuals who aren’t conventional influencers but have amassed large followings because of what they have to say. 

Unsubscribed brand launches eCommerce

eCommerce / WWD: Unsubscribed is going online. The slow fashion brand, part of the American Eagle Outfitters family, is launching an eCommerce shopping site today. "The demand [for Unsubscribed] has been so great that we would really like to share this product with more people," Jennifer Foyle, president, executive creative director of American Eagle and told WWD.

'The Suicide Squad' allegedly had a huge weekend on HBO Max

The Streaming Economy / Uproxx: The Suicide Squad, DC’s $185-million quasi-sequel to the critically and director-derided but hugely profitable 2016 original, stumbled into theaters, raking in only $26.5 million. But it’s not like no one watched it. Surely one reason it made so little dough in brick-and-mortars is because it’s available for free on a hugely popular streamer.

Amazon lures advertisers from Facebook after Apple privacy shift

Relevant / Bloomberg: The Seattle-based giant was late to the $191 billion U.S. digital advertising market, fearing that a site cluttered with ads would alienate shoppers. Today, advertising represents one of the company’s fastest-growing and most profitable lines, supplementing the low-margin eCommerce business.

gCommerce solves for this: 👇🏽

Unlocked Member Brief: Spiritual Opium and gCommerce 

No one actually knows what the metaverse is. While the spirit of Neal Stephenson’s 1992 ideal remains “a collectively shared virtual space,” it’s difficult to pinpoint what that means or how that ideal will materialize. There are frameworks that guide today’s business titans, however. Mark Zuckerberg reads Matthew Ball’s voluminous essays on the topic and is influenced by them. Ball’s writing has a consistent framework that steadies his rhetoric. He focuses on hardware, computing power, networking, virtual platforms, interchange standards, content, and payment services. His metaverse primer is 33,000 words of intellectual curiosity.

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