Even though the bear market is still hurting many nonfungible token (NFT) projects, some organizations have started using NFTs to solve real-world problems.
Particularly popular are NFTs for subscription/membership-based models or loyalty programs. This point was brought up in Forrester’s report, 2023 NFT and metaverse predictions, which says: “Brands will pivot from ‘cool’ non-fungible tokens (NFTs) towards loyalty. In 2023, brands will shift their focus to NFTs linked to loyalty, brand experience, and deepening customer relationships.”
In fact, use cases for NFT like these are being used right now. For example, Starbucks just announced a loyalty program based on NFTs. Industry experts have also started to explain why subscription-based services should use NFTs to improve their relationships with customers.
NFT memberships for wellness clubs
Even though the idea of using NFTs for loyalty programs or membership models is new, big businesses are starting to see what they can do. The billion-dollar fitness industry could be the next to use NFT-based memberships, as a few forward-thinking gym owners have already started looking into this model.
Deni Zulic, CEO and founder of the blockchain-based fitness platform Global Fit Club, told that the company will soon offer NFT memberships that will give users access to a full range of fitness services. Zulic said that Global Fit Club is working with well-known gyms like Anytime Fitness and F45 Training to give NFT members more benefits.
“This isn’t just a gym membership. NFT holders will get discounts on fitness related services such as supplements, personal training and equipment, as Global Fit Club has a number of partners lined up to provide this,” he said. Zulic also said that Global Fit Club’s move-earn platform, which pays NFT holders cryptocurrency when movement is tracked, will give users an incentive to work out.
Even though the idea behind Global Fit Club is new, Zulic said that an NFT membership model can solve many problems that the fitness industry is facing right now. For example, he said that gym membership prices change over time, which can make it hard for gym-goers to pay their bills:
“Some gyms have been around for years, once offering memberships for $6 a month. These same gyms are now offering memberships for $50 a month. Users that have $6 membership rates may not use their membership, but continue to keep it so they don’t have to pay more if they decide to go to the gym again. Or, some members may be forced to pay higher fees due to things like increasing inflation.”
Zulic thinks that a non-fungible token (NFT) gym membership could solve this problem because members could buy the NFT at its floor price and then keep getting the benefits for life. He also said that if a member wanted to stop being a member, they could sell their NFT and depending on how much the asset went up in value over time, even make money. “With NFTs, gym members can have full ownership of their memberships. They can lock in a certain rate and then sell their membership if they choose,” Zulic said.
Zulic also said that while some gyms have loyalty programs that let members earn rewards for working out, an NFT membership can make sure that crypto payments are sent directly to a user’s wallet when movement is tracked: “There is actual money behind this, which will help with customer retention and satisfaction.”
In line with what Zulic said, one study found that 67% of gym members never use their memberships. Recent research also shows that Americans spend $397 million a year on gym memberships that are never used. This problem might be solved by a program that gives rewards in the form of crypto payments.
Zulic said that the launch of Global Fit Club is planned for the first quarter of 2023. So, we don’t know yet if NFTs will really solve the problems that come with traditional gym memberships
In the meantime, people who work in the wellness industry are starting to notice that NFT membership models have a lot of potential. Co-founder of Equinox Fitness Clubs Lavinia Errico told Cointelegraph that she thinks NFTs will be very valuable for membership-based businesses:
“Fitness, wellness, social, private clubs, etc., all of these businesses are ripe for this huge disruption. Any companies who do not embrace this will be left behind. It’s best to get on board now.”
Errico said that she recently joined the board of advisors for Rafi Lounge, a wellness and fitness space in Malibu, California, that is now offering NFT memberships. Rafi Anteby, who started Rafi Lounge, told Cointelegraph that even though the business has been open for more than two years, he just recently realized that a better membership model is needed.
“There are many wellness clubs around the world that over-promise and underdeliver benefits for their members. Members also typically get locked in to high rates even if they don’t leverage their membership. There are also security issues associated with traditional gym memberships,” he said.
Anteby has started pre-selling a few NFT memberships to current members to solve these problems.
“This is a new membership model, so trust is key. I am starting with people who trust me, as I have been an existing business for over two years. I believe it’s important to know who is behind an NFT drop before users jump in,” he explained.
Anteby agreed with Zulic when he said that using NFTs as memberships gives users full ownership. “This gives members the opportunity to reap more benefits, along with the ability to sell their membership on a secondary market if they choose to do so,” he said.
But Anteby hopes that Rafi Lounge members will keep their memberships because this model is also about building a sense of community. “Rafi Lounge is about bringing Web2 and Web3 together, and this is made possible by using NFTs,” he remarked.
Anteby also pointed out that NFT-based memberships can provide more security because verification is based entirely on the nonfungible token. “We have an app that creates a unique QR-code for each member holding an NFT. It also uses facial recognition. This ensures that members are the only ones able to come in and take a class.”
Even though NFT-based gym memberships seem like they could work, it remains to be seen if they are popular with most people. Hacks and scams related to NFT projects, as well as high floor prices, could make it harder for people to use them.
Still, Zulic is optimistic, pointing out that Global Fit Club’s standard NFT membership is cheap and gives members lifetime access to gyms in the United States that work with the club.
“According to our research, Global Fit Club’s move-to-earn platform will also likely cover the cost of a member’s NFT within seven months,” he said. Zulic and Anteby have also said that NFT memberships can be sold on secondary markets, giving members the chance to make more than what they paid.
But some experts in the industry don’t like NFT membership models that can be resold on secondary markets like OpenSea. Lee Hnetinka, founder and CEO of FastAF, an NFT platform that focuses on utility, said that NFTs have become more than just investment vehicles:
“NFTs are now being used to provide on-chain utility. While these could be sold, this defeats the purpose behind these models.”
Hnetinka also said that while NFT membership has a lot of benefits, interoperability is the most important thing to think about for widespread adoption. For example, Hnetinka said that some gyms with NFT memberships should think about giving their members access to other gyms or health apps. “Merchants want a new engagement protocol and NFTs allow for this.”
In light of this, Zulic said that Global Fit Club plans to connect to fitness apps with open-source APIs in the third quarter of this year.
Micah Archibald, CEO of Ninja Media and a spin instructor for the company Spinning, told Cointelegraph that the idea of NFT-based gym memberships might not catch on right away, but she sees value in giving members access to fitness apps if they own certain NFTs. She doesn’t think, though, that many gyms have the technology and infrastructure in place to add NFTs to their membership models.
In light of this, Zulic said that the technology should be used by Global Fit Club. “Gyms that typically implement the newest technologies for their equipment or within their apps have become aware that Web3 and crypto are here to stay. I believe in the next five years innovative fitness clubs will have Web3 integration,” he said.