The following article summarises my study «NFT Sports Collectibles: Characteristics and Factors of Consumer Value», published in the 2023 IGI Global publication «Global Applications of the Internet of Things in Digital Marketing» by A. Naim and V. Devi (Eds.). The study explores NFT characteristics and factors that influence consumer value perception and offers recommendations to enhance the NFT experience for sports fans and encourage NFT collection expansion.
NFT Characteristics and Factors of Consumer Value
Blockchain technology and non-fungible tokens (NFTs) have transformed sports collectibles, evolving trading cards from marketing gimmicks to serious investments. NFT platforms and games like NBA Top Shot and Sorare facilitate the purchase and sale of such collectibles, which also offer significant financial and promotional opportunities for sports brands. However, due to the novelty and limited use cases of NFT sports collectibles, marketing professionals face different challenges in conceptualising the implementation of NFTs into their business plans. In order to influence fans and collectors to purchase specific NFTs, it is crucial to understand their expectations regarding NFT characteristics and the value they perceive to obtain.
The conceptual model proposed in Figure 1 is based upon an in-depth literature review on product characteristics and perceived consumer values. It depicts the NFT characteristics scarcity, uniqueness, and aesthetics as potential influencers of consumer values. Functional utility is illustrated as a consumer value that can be influenced by the above-mentioned characteristics, but can also be seen as a characteristic that can affect the other two proposed consumer values. The investigated variables and the hypothesized relationships are defined in the following paragraphs.
Scarcity, in economic terms, represents the mismatch between product availability and consumer demand. This principle suggests that people desire what’s less accessible. The concept applies to NFTs, where creators can control the number and availability of unique collectibles on the blockchain. Moreover, an NFT sports collectible’s authenticated value can rise when it symbolizes a culturally significant moment. NFT sports collectibles can further foster a sense of community. Research indicates a positive link between scarcity and social value. Scarcity also correlates with higher prices for NFTs, suggesting that collectors are willing to pay more for rare items with potential for increased value.
Uniqueness in marketing pertains to both a consumer’s desire for distinctiveness and a product’s perceived distinctiveness. This study examines uniqueness from a product perspective, defined as how different customers perceive a product compared to other products in the same category. For NFTs, uniqueness and authenticity can be attributes influencing functional utility, emotional, and social value. NFTs grant ownership and access to tangible or intangible assets and offer enjoyment through digital collectibles. They create a sense of belonging among collectors, unlocking exclusive benefits and services. These characteristics, combined with communication efforts and online interactions, impact the intention to purchase NFTs.
Aesthetics, often associated with the study of beauty and taste, holds significance in differentiating products, motivating customers, and enhancing their perceived value, extending to virtual environments as well. Research indicates that aesthetics can influence the intention to purchase digital items. While aesthetics encompasses beauty and taste, it can also be multidimensional and include the perspective of expression and apperception. In the context of NFT sports collectibles, collecting items can become an aesthetic experience, where collectors seek to complete series or sets, strengthening their motivation to collect NFTs from specific collections.
Functional value, also known as functional utility, represents the utility derived from a product’s or brand’s ability to fulfil utilitarian or practical needs. It comprises two sub-factors: functional quality, related to perceived product quality and performance, and price utility, linked to cost reduction or benefits. In the context of NFT sports collectibles, functional quality can refer to how faithfully they represent real-world counterparts or grant access to specific assets or experiences, whether digital or physical. NFTs can also store and digitize moments from events, creating collectible digital memories. These NFTs offer more than collectible value; they hold price utility as their characteristics can influence emotional and social value over time. For example, NFTs with features like scarcity, aesthetics, and uniqueness may appreciate in value, fostering a sense of enjoyment and creativity among collectors in a playful environment.
Playfulness: Enjoyment and Creativity
Emotional value in the context of digital consumer items is the perceived utility derived from the capacity of a digital item to evoke feelings or affective states. Playfulness contributes significantly to emotional value for consumers, with playfulness consisting of two elements: enjoyment and creativity. Enjoyment adds emotional value by providing a sense of fun, joy, or happiness, encouraging the intention to purchase items. Creativity reflects a consumer’s curiosity, open-mindedness, and attraction to imaginative situations. In the case of NFT sports collectibles, collecting these digital items can offer emotional value through the enjoyment of the search for specific NFTs, leading to a sense of accomplishment and happiness when acquired. It also stimulates creativity by encouraging collectors to seek information and explore different purchase opportunities, fostering curiosity and imagination while promoting an open-minded approach to alternatives.
Social Value: Self-image Expression and Relationship Support
Consumers often use products to enhance their social image, as products can communicate symbolic meaning to others. This concept adds to perceived product value and creates social value. For instance, scarce NFT sports collectibles with functional utility can provide unique benefits, like exclusive access to virtual or real-world assets or experiences, allowing collectors to express a specific virtual image. Such functionality can augment social value, creating exclusive groups of beneficiaries, and influencing like-minded individuals. Social relationship support is defined as a digital item’s capability to facilitate and enhance interpersonal relationships. In the context of NFTs, owning specific digital collectibles can encourage collectors to form connections while interacting within a community. Social interaction strengthens the bond with an online community, driven by a sense of belonging and self-concept. Peer influence, or social proof, is effective in this context, as persuasion is often more effective when it comes from peers. Additionally, peer-to-peer transactions within a community of NFT collectors can lead to cooperative pricing decisions, benefiting both buyers and sellers by increasing the chances of successful exchanges.
The causal relationships proposed in Figure 1 are analysed with data collected from 300 sports NFT collectors through a self-administered online survey. The convenience sample suggests a reasonably gender-balanced view (38.3% female, 61.3% male, 0.4% non-binary) with 25 to 44 years old consumers from the USA representing a great majority of the sample. Results were computed through structural equation modelling, upon which the following recommendations are based.
To entice collectors to purchase an NFT sports collectible due to its scarcity, the NFT should offer functional utility, playfulness, and social relationship support. Achieving this involves limiting the NFT’s availability to create exclusivity, which can significantly increase its price utility. Functional quality can be integrated by providing exclusive access to services related to the issuing brand, such as VIP access to events or limited-edition merchandise. Playfulness can be introduced by gamifying the NFT marketplace, where collectors use their digital collectibles for challenges, with rarer items having higher in-game value. Scarcity can also enhance social relationships as rare NFT owners engage in communities, discussing collectibles and related topics. NFT providers should foster such interactive and supportive communities, whether online or offline, to create a sustainable and beneficial environment for collectors and the organization.
The uniqueness of an NFT can influence the purchase intention for NFT sports collectibles by leveraging variables like functional utility, playfulness, and social relationship support. Functional utility can be enhanced by differentiating an NFT from others in the same category, such as offering collections that emphasize unique brand assets related to a sports brand or organization, along with specific augmented services. Playfulness may arise from this uniqueness, encouraging collectors to seek additional information and enjoy the process. This journey may lead collectors to online or offline communities, fostering a sense of belonging and social relationships. NFT providers should consider creating NFTs with varying degrees of uniqueness to offer a diversified NFT experience within a marketplace, catering to different consumer values.
The aesthetics of an NFT indirectly influence its purchase intention by impacting functional utility and playfulness. Sports organizations should focus on NFT aesthetics as a means to express brand values and attributes rather than purely visual beauty. For instance, the NBA Top Shot platform uses NFT aesthetics to represent specific athletic plays through short videos. This approach adds playfulness to the NFT experience, as collectors are drawn to the expressive nature of NFTs and derive joy from browsing and interacting with their collection. Additionally, expressive aesthetic communication design can enhance the functional utility of an NFT, adding visual and possibly economic value due to its unique visual interpretation of real-life moments.
While social self-image expression may not directly impact the intention to buy NFT sports collectibles, it can enhance the overall brand experience, affecting satisfaction and loyalty among NFT owners. Online users often seek to showcase their digital possessions to their virtual audience, and NFT providers should facilitate this by adding functional utility to NFTs, providing exclusive access to tangible or intangible items or experiences. This enables owners to enhance their perceived image within the community. Scarcity of sports NFTs can also play a role in self-image expression, allowing collectors to make a distinct impression with rare and sought-after digital items not accessible in the physical world. Sports organizations can further elevate NFT uniqueness by incorporating culturally significant moments that align with their brand values, fostering a stronger sense of identification and admiration within the community.
The study highlights the significance of NFT sports collectibles in the sports fan experience, offering collectors a digital extension of their passion. While NFT characteristics like scarcity, uniqueness, aesthetics, and functional utility do not directly drive the intention to buy NFT sports collectibles, they do positively impact purchase intention when mediated through consumer values such as enjoyment, creativity, and social relationship support. Surprisingly, social self-image expression did not significantly affect purchase intention in this context. The study additionally introduces a unique perspective on functional value, viewing it not just as a consumer value but also as a characteristic of digital items. This study acknowledges limitations such as sample bias from recruiting respondents through digital channels, primarily from North America, and being skewed towards Millennials. Future research opportunities include studying consumption behaviour across generations and exploring NFT sports collectible markets in other countries.