Tokenizing Brand Marketing in the Fashion Industry: The Signaling Effects of Branded Non-Fungible Tokens on Consumer Engagement in Social Media

Abstract

Branded non-fungible tokens have become a powerful marketing tool for increasing brand awareness and engaging consumer targets who were previously unreachable, such as Gen-Z and cryptocurrency enthusiasts. In this study, we aim to fill a gap in the literature and examine the signaling effect of launching branded non-fungible token products on consumer engagement on social media. Additionally, we examine the moderating impact of brand age and gender-based brand popularity. Using Twitter data from fashion brands, we employ a two-way fixed effects model to estimate the effect of launching branded non-fungible tokens on the number of likes, retweets, and replies to brand posts, which indicate consumer engagement. Our results show that launching branded non-fungible tokens plays a significant role in increasing consumer engagement on social media. The effect is stronger for younger brands and for brands that are popular among men. Our results provide important insights for brands to understand how to strategically embrace digital trends.

Keywords: non-fungible tokens, fashion brands, social media, consumer engagement, signaling theory