Empowerment or erosion? The impacts of NFT promotion strategy on brand attitude and physical product purchase intention

Abstract

Purpose This study aims to examine both the facilitating and cannibalization effects of non-fungible tokens (NFTs) on physical products. Design/methodology/approach Three experiments are conducted. Study 1 (n = 306) examines the impact of promotion strategy (fixed-price vs. freely distributed) and promotional products (NFTs vs. physical objects) on purchase intention (PI) and brand attitude. Studies 2 (n = 223) and 3 (n = 246) further examine the mediating role of pain of payment and brand ownership. Findings Freely distributed NFTs encourage purchases of physical products (facilitating effect) but barely influence brand attitude. Fixed-price NFTs enhance brand attitudes yet weaken physical product PI (cannibalization effect) (Study 1). Pain of payment and brand ownership mediate these effects, respectively (Study 2 and Study 3). Research limitations/implications Future research could explore how promotion strategies affect other NFT journey touchpoints, incorporating consumer/situational variables (e.g. prior NFT purchase experience, omnichannel behavior, demographics and cultural differences) and additional boundary conditions to refine the theoretical model. Practical implications This research suggests marketers notice both the facilitating and cannibalization effects of NFTs on the physical product promotion. And brands should employ NFTs based on their promotional targets: fixed-price NFTs to enhance brand image and freely distributed to boost physical product sales. Originality/value Previous research diverges on NFTs’ impact on enterprises’ physical operations. This research examines the facilitating effect and cannibalization effect of NFTs on physical products, explains their mechanisms and examines promotional products as a boundary condition.