The NFT space is an asset class that has experienced tremendous growth within a short time. Two years ago, only 545,000 wallets were trading NFTs, but as of early 2022, the number spiked up to $30 million and counting.
This increased participation of NFT wallets in the NFT space has undoubtedly increased the market’s trading volume. At the moment, the total volume of the NFT market—on aggregate—has surpassed 18 million ETH which is worth $54 billion, and experts predicted that it will hit $350 billion in 2030.
While all these incredible sales are going on, the one vital question is, “Who are those buying these NFTs?”
Answering this question is important so NFT creators and NFT brands can have insight into who their ideal customers are. Of course, not everyone buys NFTs or even has plans to do so.
But when you know those who buy NFTs, you can know the category of those you should target when you create and promote your NFT.
If you are an NFT creator or a brand pivoting to NFTs, this piece of content will give you a perception of your ideal buyers and the type of NFTs that appeal to them.
Individuals from the larger part of those who buy NFTs for various reasons which we will look at later. For easier comprehension, we will give insights on individual buyers based on age, gender, income, and location.
Research has shown that the 23% of Millennials, those who were born between 1981 and 1996, are leading in collecting NFTs. Baby Boomers have the lowest turnout towards NFTs as only about 2% of them admitted purchasing NFTs.
On the other hand, Gen Xers and Gen Zers have 8% and 4% respectively. Although the Gen Zers have always been known to be at the forefront of digital innovations, more researchers have been more interested in the reasons they don’t often get NFTs.
Further study has however shown that the main reason 57% of Gen Zers don’t purchase NFTs is that they simply don’t understand it. Therefore, there are likelihoods that Gen Zers might top the NFT collection chart in the future once they have had enough education about it.
Men have a higher tendency of collecting NFTs compared to women. According to a survey, 15% of men tend to purchase NFTs, while only 4% of women tend to do so. This has sparked arguments about the gender imbalance in the NFT space.
Interestingly, more women like Serena Williams and Paris Hilton—who just invested $4 million in an NFT Ticketing platform—are increasing the NFT awareness among women. Similarly, there are also several women-led NFT projects trying to fill the gender gap in the NFT space. This includes the popular World of Women, Fame Lady Squad, and Boss Beauties.
Moving on, while there are several instances that the genders in the LGBTQ+ community have created NFTs, research has not yet shown if a tangible percentage or number of these genders actively collect NFTs.
Civic Science reported that individuals with an annual income of around $25k to $250k form the larger percentage of those who buy NFTs.
While there is an increased interest among those who earn less than $25k and those who earn higher than $150k, further study has shown a huge 94% disinterest among the people who earn between $25k and $50k.
Since 70% of Americans don’t know what an NFT means, research shows that only 2% of Americans are actively purchasing or collecting NFTs. But looking at the Google search results, there is spiking interest in NFTs and this is remarkable in California, Hawaii, Florida, New York, and New Jersey.
Moving on to Africa, the continent is posing to be a hub of NFT collectors. As of last year, 8.3% of South Africans buy NFTs, while a further 9.4% hope to ape into the market in the future. The results are quite higher in Nigeria with 13.7% actively buying NFTs, while 21.7% plan to start buying later.
There are two types of bodies that buy NFTs: blockchain-based organizations or mainstream companies.
The blockchain-based organizations are better-called DAOs. DAOs come together for various reasons, and the main reason for some DAOs is to purchase NFTs.
At this point, we should also stress that DAOs don’t only exist to buy only blue-chip NFTs. Recently, Pleasr DAO announced buying the only copy of “Once Upon A Time In Shaolin'' – an album by the Wu-Tang Clan for $4 million.
While some mainstream companies and brands have started creating NFT collections one after the other, not a good number of them are buying NFTs. Creative Bloq recently carried out a survey and discovered that almost 70% of mainstream companies are developing a positive disposition towards purchasing NFTs.
Most of them confessed they would like to either buy art NFTs or invest in NFTs generally. On this note, brands and NFT creators should start eyeing mainstream companies as their target audience.
Does your brand want to get into NFTs anytime soon, know the qualities of NFTs that appeal to the buyers:
Right from the time of collecting Pokémon NFT trading cards or artifacts, humans have always expressed the idea of buying items that they connect with. Interestingly, the passion for collecting items didn't die with Pokémon cards, it still exists today.
Nowadays, several people collect NFTs that appeal to them and remind them of certain events or memories. There are a lot of collectors like Jean-Michel Pailhon who recently spent over 36 ETH to buy NFT artwork of Isaac Drift Wright.
As a brand hoping to break into the NFT market, especially if you have a large base of customers already, you can create NFT collectibles for some of your die-hard customers to own. The collectibles might be NFT photography, iconic images, symbols, moments, or mascots.
A week ago, Hyundai—a popular South-Korean car manufacturing company— in partnership with Meta Kongz announced launching 30 collectibles of customized King Kong in its debut NFT collection. Apart from the utilities of these NFTs, some fans of the company would likely proceed to buy them as collectibles.
When your brand wants to create an NFT that appeals to the buyer, you should ensure that your NFT collection has some exclusive benefits it would offer to prospective collectors.
Research has confirmed that people are naturally drawn to exclusive items or events because of the uniqueness attached to them. The benefits you can offer can be merch drops, access to a close community, or a special invitation to events.
A robust example of this is SanoPass’ NFT collection. SanoPass is a health tech Romanian startup, and its NFT grants the holders the following benefits:
When Coca-Cola released its first NFT debut, it gave the highest bidder a branded real-life refrigerator.
Balenciaga also offered the buyer of some of its NFTs the exclusive benefit of shopping a complete collection of its Balenciaga and Fortnight goods.
Since the trend of NFTs is on the rise, people are constantly looking for ways to make money with NFTs. Of course, the use-cases of NFTs have gone beyond mere collectibles, they can be profitable investment opportunities.
NFTs can be lent, stake, or farmed. Even their commercial rights can be licensed out as is the case with most blue-chip NFT projects. Degods, one of the top Solana projects with a floor price of 320 SOL, makes it possible for holders to stake their NFTs and receive DUST in return.
Due to the profitability, around 31% of the entire collection has been staked. However, it's worth noting that most mainstream brands releasing NFTs have not opened their collectibles up to be an investment opportunity.
Thus, a huge takeaway for brands hoping to create NFTs that will magnetize buyers must make their collectibles have investment possibilities.
Brands always want to contribute to the betterment of society or some targeted individuals. Hence, the reason they now raise funds with NFTs is to cater to these charitable projects.
When Taco Bell—an investment food brand—created and sold its NFT collection, some portions of the proceeds were pumped into Taco Bell Foundation. Similarly, the entire 1.6 ETH realized from Campbell’s NFT was given towards the Feeding America initiative.
With the way the two NFT collections above sold out quite quickly, it appears charity NFT appeals to most buyers.
If you have always wanted a closely-knitted community for your brand, you can launch an NFT collection for your fans or customers to support you. We especially recommend this to brands that have built an existing community over time.
Social media influencer brands are leveraging this at scale. A popular example is the Vayner NFT community created by the popular Gary Vaynerchuk. However, mainstream brands have not extensively tapped into this.
The next gear in marketing your product as a brand is to launch your NFT collections. But before you do that, you should carry out customer research and know the type of NFTs that resonate with your buyers.
At this point, we would like to stress that you don’t need to implement all these takeaways in your NFTs at once. Nonetheless, you should combine a couple of them to enhance your chance of selling out fast.
Once you have known your target audience and what NFTs appeal to them, you should go-ahead to create a platform where you can sell your NFTs to them.
Of course, we understand that building an NFT marketplace all by yourself can be tasking, time-consuming, and pretty costly. That’s where our platform comes in.
You can leverage NFTify to build your own customized NFT storefront, and launch in a matter of days or weeks. You can start creating your storefront here.