How the automotive industry benefits from NFTs

Content

1. The relationship between customer and dealership

2. What is the potential of PBTs in this context?

3. What concrete added value is created here for the automotive industry?

4. Jump start with our workshop

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What is the potential of PBTs in this context?

In a previous article, we have already written in detail about how the so-called Phyiscal Backed Tokens (PBTs) work. However, to provide a basic understanding, we would like to briefly explain the principle of these special NFTs once again.  

The revolutionary technology behind this token standard makes it possible for the first time to reliably link physical objects with digital proofs of ownership (NFTs) without the need for actual ownership to be authenticated by an intermediary body. In very concrete terms, this means that the objects coupled with a PBT are based on an inseparable and transparent link on the blockchain. So, should either the token or the associated physical item be sold or given away, the actual ownership can only transfer with the confirmation of both parties in the other counterpart pair. For a deeper understanding, we highly recommend this blog article.

We see revolutionary opportunities here, especially for the automotive industry, to awaken the experience beyond the car purchase. To explain this in a practical way below, we describe the potentials from the perspective of a fictitious sports car dealer.

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The future of vehicle ownership

The holder or owner of the sports car is the person who is entered as such in the vehicle registration document. Now, with the help of PBTs, the ownership of the car can be digitally recorded on the blockchain, thus replacing the paper or electronic certificate.  

If the sports car dealer now equips his fleet with PBTs and the chips linked to them, which define the ownership by scanning them with a smartphone, this enables completely transparent, unambiguous and forgery-proof proof of ownership. If a customer now buys a car from this dealer, he can claim ownership by scanning it with his smartphone.  It is important to note that the scan alone is not sufficient for PBT transfer. The transaction must also be approved by the seller, i.e. the current owner, on the blockchain via smartphone. Only after this confirmation on both sides does the digital proof of ownership move fully automatically from the merchant's wallet to the buyer's wallet. This innovative "Scan-To-Own" experience can be carried out throughout the entire lifecycle of the sports car, i.e. until it is totaled. This means that this process also takes place at the next resale without a third party. In the process, the blockchain automatically records all transactions and provides an unfalsifiable record of the number of owners, which are highly relevant for resale, especially in the case of sports cars. For the dealer of the chipped sports cars, this opens up a completely new possibility for the sales experience.

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The recording of vehicle data

In addition to the cryptographic recording of vehicle owners, all other vehicle data can be integrated into the smart contract and regularly updated as needed to ensure maximum transparency in car trading. In addition to fixed data such as first registration, horsepower, color and equipment features, dynamic data such as mileage or purchase price history can also be regularly updated and secured on the blockchain in an unforgeable manner.

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Digital experiences through vehicle ownership

A look at the previous ways of orchestrating experiences with NFTs shows that this was predominantly a one-way street. Digital tokens have been used to create physical experiences, rather than the other way around. For example, possession of certain NFTs enabled access to exclusive products, gated communities, or entry to events. This characteristic of an NFT could also be leveraged by the dealer, but with a focus on the physical components - the sports car.

In order for the experience at the sports car dealer to extend beyond the purchase of the car, the described linking of PBTs to the sports cars provides the first opportunity to add a two-way lane to this one-way street.

Buying a car, i.e., owning the physical object, allows the buyer to receive digital proof of ownership in the form of a PBT. At the dealership, however, the PBT not only serves as a unique authentication of ownership, but is also a digital, beautifully designed membership card for the dealership's "Racing Club." With the membership NFT to the "Racing Club," the car dealer not only expresses his appreciation for the buyers of the expensive sports cars, but at the same time binds them to the brand through the associated added values. For example, members not only receive exclusive access to the dealership's token gate, but also the status of guest of honor at the annual summer party, which the dealership stages as a major networking event. The dealership enjoys prestigious status in the automotive world because of these regular events and is happy to have celebrity guests at its event, which also benefits buyers. So the dealership creates physical and digital after-sale-experiences through the purchase of a sports car. And it is precisely this holistic linking of digital and physical that is very important for innovative experience design. The dealership is opening up entirely new avenues of storytelling and is already planning to further engage its community with the brand. Soon, a gamification aspect will be integrated, allowing users to move up in rank through interactions with the brand, which in turn unlocks further added value, such as vouchers for a car wash at the partner car wash in the form of airdrops.

The PBT thus serves as a digital proof of ownership, certificate of authenticity, access to the "Racing Club," admission to events, and an activation option for further incentives.

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What concrete added value is created here for the automotive industry?

Brand loyalty depends heavily on how well the brand's sense of community is conveyed. Through the experiences created, from the "Scan-To-Own" to the digital certificate of ownership, to added values that go far beyond the car purchase, there are four specific added values for the car dealer in particular.

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Customer loyalty

By activating customers in the long term, even after the purchase, and emotionalizing them through membership of the "Racing Club", the dealership binds buyers with far more than just the purchase of a car. The exclusive benefits offered by the dealership can be considered a decisive factor in the purchase decision. After all, if I can get the same sports car at a similar price from three different dealers, I will tend to choose the dealership that offers me the strongest incentives.

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Exclusivity

Desirable after-sale added values create demand and an exclusive character for the brand. Furthermore, it can be assumed that the more upscale clientele of the sports car dealer generally considers exclusive incentives to be desirable. Moreover, this type of experience design, which goes beyond the car purchase, is not found very often in the automotive industry, which reinforces the exclusivity for the dealership.

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Boost of the brand

NFTs remain a powerful positioning tool for brands. While companies should definitely avoid using NFTs as a PR stunt, PBTs and token-gating technologies can be used to generate tremendous buzz. This increases brand awareness among both existing and potential customers.

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Community building

Owning a digital and premium membership card fosters a sense of belonging, which further strengthens brand awareness. Members can also interact with each other, which fosters community and strengthens both brand loyalty and word-of-mouth marketing.

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Jump start with our workshop

We would be happy to support you and your company in the conception, outlining of ideas and implementation of an NFT strategy. Our Discovery Workshop is a proven foundation for all business ventures in the Web3 area. Please contact us via our form on the website and we will get back to you as soon as possible.

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