Blockchain Journal Reviews Launch of Michelin "Explorer" NFT Program

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David Berlind: Today is Thursday, November 9th, 2023. I'm David Berlind, and this is the Blockchain Journal podcast. Joining me for this podcast is Sophie Maxx Waldman. She is one of our writers. She writes about the customer journeys of the different NFT programs. And she writes about it from the customer's point of view to kind of show other enterprises and global brands around the world how existing programs are working and how they're resonating with customers, whether they're easy to use, hard to use, effective at driving more loyalty or more engagement. Sophie, thanks for joining me today.

Sophie Maxx Waldman: Yes, it's a pleasure to be here. [I'm] excited to hop into yet another conversation.

Berlind: It's great to have you. There are so many programs out there and it's actually kind of surprising. Most people think of NFTs and they think about like Bored Apes or other JPEGs that are just, you know, where the inventors of those JPEGs are just trying to make the JPEGs themselves collectible. What they don't realize is that there are literally hundreds, maybe thousands of global brands out there that are working with NFTs to make them a part of their customer engagement and loyalty programs and they're actually having some success.

The last time we talked, of course, we talked about what's going on with Nike and their dotSWOOSH program and their drop that involved both [a] physical pair of sneakers, the TINAJ's, which stands for This is not a JPEG. That's kind of tongue-in-cheek coming from Nike and also a matching NFT to go with that drop so that everybody who got the sneakers also got the NFT to go with them. That's sometimes called a phygital drop – physical and digital. And so there are a lot of brands that are doing this and we're here to talk about another one today.

Let's talk about Michelin because they just launched a program and I believe you've been poking around to see what it's like. So tell me a little bit about what's going on with Michelin.

Waldman: Yes, definitely. This is a fun one because Michelin is not the – to me – not the brand that you would see jumping into this space. But you know what, they've taken that leap and I applaud them for it. And I think what they're doing is actually a pretty cool way to kind of build this community around the brand. That's... I mean, it's a heritage brand. I'm sure it's been around for years upon years. And now I think they're probably looking toward Web3 to potentially build more of this like personalized and you know, tight-knit community of what they're calling "3xplorers" and you know, lead that with Web3 and blockchain technology. So I guess starting off, they launched the Michelin 3xplorer Club, which is what they're naming their huge Web3 venture here. The three is – or the 3xplorer – is written with a three, kind of paying homage to Web3, which I thought was cute.

It was launched with a NFT collection and it was a[n] original supply of 500 – or – 5,000. Although with the mint, it looks like they ended at a supply of 2,400. And so that's the final numbers of this first iteration. All of the NFTs itself were the like Michelin Man character. I'm sure you guys all know who I'm talking about. And so, the NFTs itself, the art was pretty cool. I mean, it was like an animated Michelin Man and he's doing his little walk and it's cool to see. For me, it's cool to see when NFTs are animated a bit. I just think it adds a little bit more, you know, fun to the collecting of it and personality to each of the unique assets. So yeah, there's 2,400 of these Michelin Man NFTs and each of them kind of gives access to the community for a whole bunch of what they're saying – you know – perks and experiences and we can get into what they've done with some of those specifically, but they're there and so far, I mean, this is their first phase or first like kind of really entrance into a Web3 strategy for the brand. And so it will be now interesting to see now that they're one month down where they're headed.

Berlind: When I think of the Michelin brand... I'm guessing, I got a few years on you when it comes to the age difference here between me and you. When I was a young kid, there were like two or three tire companies that were dominating all of the television advertising when you watch something like a car race. That was Goodyear, Firestone, and Michelin. And they competed hugely on like how inventive their treads were, and how well those treads worked in rain or snow, or if you were climbing a mountain or something like that. So, [if] you live in the city, if I'm not mistaken, you're probably not exposed to that level of advertising. I actually haven't seen much in the way of that sort of advertising for many of the tire companies in the last couple of decades.

Waldman: Yeah.

Berlind: So, just start there. What is your perception or what was your perception of Michelin before they launched this program?

Waldman: Yeah, that's actually a really good question because I mean, of course, have always seen the logo, have seen the Michelin Man, like [I'm] familiar with the brand, but I never really knew much more about what they were about or what they were doing other than tires. That's kind of just my own... that's what I thought they did. And I was, you know, not more. However, I did find out through the 3xplorer Club that since apparently Michelin's in, you know, original like founding goals has always been to help what they're saying 3xplorers around the world in traveling and going to new places and trying new things and having these experiences. And so, that was what I read as their... the reason as to why they launched this Web3 initiative. And so it was to build off of that goal and vision that they've had since day one. I just happen[ed] to not know that they were providing these opportunities or had some type of experiences or goal even to allow their community to, for instance, travel the world or try new things that they're bringing into this 3xplorer Club initiative.

Berlind: So you're a degen, and you're a self-declared degen. In fact, you said you're a part-time degen –

Waldman: Part-time.

Berlind: But, I think more likely you're a full-time degen. And I'm just going to go there. And you, of course, are interested in all the different NFT programs that are being launched out there for customer loyalty and engagement. And essentially, what you're kind of saying is that, to some extent, their plan worked. You had some limited familiarity with the brand. You knew about the Michelin Man and the logo and all that –

Waldman: Yeah.

Berlind: But this actually made you a little more aware of what that brand was about, what it stood for.

Waldman: 100%. I mean, they – with their I think the slogan that they're using for the 3xplorer Club also is the key to go further in the universe or in their universe. And so already, I'm like, well, what's their universe? What, you know, if this is the key, what does that look like to them? And so that's where I kind of found out that they've had this goal since day one. And it is definitely pretty cool to now learn more about what their origins and you know, original plans were and how it's still so relevant today to the brand and why they're now using it with the 3xplorer Club itself and connecting it to maybe newer generations or younger generations who missed that first foray that you're maybe referring to when racing was a little bit more, I guess, it still is, but it just was maybe a different time then.

Berlind: Yeah, it was a big deal back then. A lot of people sat in front of the television and watched these races and the races themselves – or the racing teams – it was a big deal. Are they driving on Goodyear tires? Are they driving on Firestone tires, [or] Michelin tires? And there was a lot of television advertising that went around that. The official tire for this team or that team. I just haven't seen a lot of that recently. Of course, I would also say that my... the way I use my time has changed. I don't sit around watching a lot of the different races. Although, now I'm taking a little more interest in Grand Prix racing because we're dabbling with the Williams racing F1 NFT program. That's another, that's one of the Grand Prix teams.

Waldman: That too.

Berlind: Well, we'll talk about that on another podcast, but, what was the onboarding experience like, did you go through it just to kind of get an idea of how it worked?

Waldman: Yeah, so I missed the original mint, which kind of keeps me out of somewhat of the experience. But the mint was October 16th, and I think the price was 0.05. I did just look at kind of the OpenSea page –

Berlind: I just want to – .05 what?

Waldman: ETH. I should have definitely clarified that there.

Berlind: ETH. The official token of Ethereum – So .05 is... that's actually pretty expensive if you think about it.

Waldman: Yeah, that's a little bit as to why I'm watching from the sidelines for the time being, because I want to see how they're rolling this out. And we'll get into some of the perks that they're already launching, but it does seem like there's definitely a cost, but potentially [it] makes sense for what you may be getting out of this, as opposed to what we were saying earlier with a flat JPEG type of NFT. The NFT itself of course is an NFT, but the value is within that experience that they're offering and this club that they're building around it. And so, I think that's where I view this definitely as like a membership or like a, you know, access key as opposed to just even the NFT itself. Although the animated art is cool and you can, you know, do something, set that as your PFP and use that in your own branding as well. It definitely is like an experiential NFT pass.

Berlind: You mentioned something there I want to stop you. What's a PFP?

Waldman: A PFP is your profile picture. So if you look at the earlier on like NFT brands that first came out, like a Bored Ape, for instance, they definitely set this kind of precedent that NFTs were profile pictures and kind of translated into your digital identity. And now I think that we've progressed past just that first iteration of NFTs and we are getting into more of these experiences and programs and memberships. We're seeing that these smart contracts can stand for way more than just a profile picture. You can use the art of the contract, of the NFT to do whatever a PFP NFT would do, but there's also a whole bunch of new experiences that can be unlocked through that.

Berlind: Right, so we do see this across NFT programs where they're allowing the customer to do some customizations or to acquire a unique NFT that kind of represents their own personality. And then by owning that, that kind of gives you all of the rights to use that particular imagery as your personal profile picture on your social media or wherever else you might use an avatar, is that right?

Waldman: Yes, definitely. And I think a big piece into that, especially if people are unfamiliar with this, is that a lot of the mints are – which is when you originally, you know, purchase your token – are blind or you don't know necessarily like random, depending on kind of the term that the brand uses. So you don't know when you are originally getting access, what your specific, you know, asset may look like. And I kind of think it's similar. I compare this when I'm explaining to people to like a gift card at a store or Starbucks, for instance, like they have all of those gift cards with different art and the thank yous and the personalized holidays. But at the same time, all that really matters is the actual amount that's put onto that card. And so, that's kind of how I look at something like this. There's value in what this NFT gives you. And then there's also a little bit of fun, festive art that maybe resonates with you and you want to do something with, but definitely like on the utility – they're heavier on the utility side. And that actually makes me think of [that] they were definitely pulling from kind of this like Web3 culture and lingo that we've seen because they're using those words that we're familiar with, like "utility" and they're kind of making their own acronyms across social media, which I think is pretty cute. And so they did like a, CGU stands for "create good utilities." And it was like the Michelin Man, like go for good utilities. And I thought that was cute just to see the Michelin Man fighting for utility. And, you know, years later, I probably never thought that it would be doing such.

Berlind: One thing I do want to ask about is the mint. As you mentioned, they sort of set the program up and said, hey, there's going to be as many as 5,000 of these NFTs that you buy as sort of like your ticket into the 3xplorer program. But as you pointed out, only a subset of those, less than half, it sounds like, actually ended up in the hands of customers or fans of the brand. And that's a very interesting point you made there, because we do see across programs varying degrees of success when something gets minted. For example, if you look at the different mints that Starbucks has had throughout its Starbucks Odyssey program, some of those have been more successful than others in terms of whether they sell out or not.

And in this case, it didn't sell out. So in your mind, as somebody who's watching the program, as somebody who engages with other programs, how do you perceive that? Like when you see that a mint doesn't sell out, does it does it send you a message or do you interpret that in some way? Like this program is going to be a great program or it's not going to be so great. How do you view that?

Waldman: Yeah, that's an interesting point. And I think honestly, my answer is maybe a little bit controversial to some other people that are, you know, big in the space as well, only because I come from this like appreciation that these brands are exploring and trying out this technology. Like, this is a huge risk for them to launch something like this, to have a mint from the brand and, you know, try out what the, like these technologies can do for them.

[the sound of sirens can be heard in the background, interrupting the conversation]

And so I actually, you know – is the sirens too loud? 'Cause I'll pause a second.

Berlind: They're coming to get you. The Michelin people have sick the fire department on you and they're coming after you. Stop talking about us. Keep going.

Waldman: I figured I'll let them run for a second. I'm sorry.

Yeah, so my view of it is like, we should just, you know, congratulate them and uplift them for even trying. And then I look at it like a long-term play as well, where like, this isn't just like, for instance, in Michelin's case, this isn't just for the hype. This was not something that is going to be launched just to pick up royalties or secondary, you know, market-like activity there. They have a full roadmap and, you know, utility in this and they're going to deliver on that regardless of who comes in to support them early on. And then I also look at it like, okay, they didn't completely mint out, but that's because we have this kind of like line in this NFT space where half of the people are here to trade and make money. And the other half are here to support this technology, [and] see how they can become involved. They kind of preach this like community and wanting to potentially be involved in Michelin like never before and have that brand experience. And so I think that if they don't, you know, mint out, it's not necessarily a reflection of what the overall like – project or experience – will offer. I think it's just more so scarce for the people who are in. And it shows that those people maybe in two years when everyone wants to be involved in the Explorer Club, that those early on people will potentially either reap some benefits in that they were early or be able to pass that on to some new consumer who wants to get in two years, because again, that's the power of blockchain. We don't need to just cancel our subscription. We can relist it and pass it on to someone else.

Berlind: Sure, that's a really good example. I mean, when I go back to Starbucks again, and the thing that really kind of gave me that fear of missing out, that FOMO, was when one of the NFTs they sold out of was their Siren collection. There were only 2,000 of those. They sold them for $100 each. That generated a bit of revenue for Starbucks, which is probably a good day for them. But then further down the line, a couple of months later, everybody who bought one of those NFTs actually got a really cool hot cold tumbler, a mirror tumbler that on the side of the tumbler, it had the same image that was on their NFT. So there was a matching, again, it was a phygital kind of play. The tumbler matched the NFT that they owned.

And I look back on that and I said, Oh God, I missed out on that. And it made me wanna pay more attention to the Starbucks program. So I didn't miss out on some other benefit that was coming. And the same could be here, true here, right?

Waldman: Totally.

Berlind: 'Cause Michelin maybe only 24[,000, ]2,500 people got in, but when they start to experience those benefits, they start to share those experiences on social media and stuff, then that could kind of create this FOMO situation where more people wanna be into the program.

Waldman: 100% that that's such a good point. It's definitely the case. And I actually was thinking about it while we're on the topic of their mint. The mint was delayed multiple times prior to the actual launch. And I took note of this because the first tweet that they had put out was mostly a year-long roadmap, which is funny because you don't see projects doing that a lot anymore. And they took that more traditional, like this is what we should do – showing a full roadmap of what our plans are. And that original roadmap had a mint date for June. And then in, so I was thinking, okay, I saw that this was launching in June. I was a little bit confused because I knew it was October when the mint actually occurred. And then I saw a couple of months later in August, they had tweeted, due to legal topics that comes, or that like is a part of having a, you know, large company behind you. They fully transparently said this, "We need to postpone the mint yet again to September."

Keep in mind that still wasn't October. And so then there was one more delay. So there were, and there may have been more, that was what I could see. So, but there were at least three delays in the mint date. Again, I'm more about just the fact that they got a mint up and off the ground. It successfully went through – like all of that. However, you know, that may have caused a little bit of, "Oh, no, they keep delaying. They're not ready. They're not on it." And maybe some people did view that as a well, I'm not going to mint anymore just because it doesn't seem super put together. And so I think that is actually a good point here to make for brands that are exploring this is if you will, you know, announce something, it is really crucial to have the dates because especially people in, you know, these communities are not like super forgiving and they will post on, you know, socials what their opinion is. And so with that, I just think it's really important that when brands make these big announcements, everything is as close to finished as possible or as foreseeable as they can make it. And I've been there on the brand side. It's, you know, it's hard and things happen –

Berlind: Yeah.

Waldman: But I think it's close that they can get to that mix, you know, and even more successful mint or launch.

Berlind: Well, legal things definitely happen. So there's a lot of challenges when it comes to anything that's related to blockchain and cryptocurrency uh when it comes to compliance and regulations uh and the regulations are different from one jurisdiction to the next regulations in the US regarding anything that looks like a security –  for example you know like a stock – those regulations are different than they are in Europe than they are in Singapore and so on and so when you launch a program the lawyers get involved because NFTs non-fungible are in fact one of these types of tokens that are getting a lot of scrutiny from all the different regulators. And so they have to be very careful with every single word that they put out on their Discord channel or on their website. They cannot make any mistakes there. And so it's not surprising to me that they were about to launch something and then suddenly it went under some sort of legal review, because when you're a big brand like Michelin or Starbucks or adidas, or any one of these companies, there's a lot at risk. You're risking the entire reputation of the brand. You're risking lawsuits. You're risking all sorts of things. In fact, Michelin, as you pointed out, a very important thing you mentioned that you slipped in there that we didn't talk about, they're talking about the utility of the NFT. And that is [the] language that a lot of these big global brands, that's [the] language that they're using because they are conveying to you this is not something where you're going to make an investment and turn around and sell it and make a profit the way other NFTs have gone, right?

Waldman: Yeah

Berlind: They are saying there's utility here. It is strictly utility. We don't want you to think that you could buy this and make a profit on it later. That wording is very important because of the minute. The very minute they say, oh, you're going to be able to buy these NFTs and oh, by the way, they'll be on OpenSea or Rarible or some NFT marketplace and you can probably sell them there and make a bunch of money. The minute they say that, well, the US Security and Exchange Commission is going to come down on them like a ton of bricks. They're going to find them and that is just not good for the brand. So that's probably what happened at Michelin, which is the lawyers were like, wait a minute, we have another question here. Boom, delay the launch. You know, I see that happening. So I wanna keep going here. I wanna, we wanna get to the end. You talked about benefits. So what benefits did Michelin advertise as being part of the utility –

Waldman: Yep.

Berlind: We're talking about utility, of the Michelin 3xplorer program?

Waldman: Yeah, they made it very clear with three big points. So the first one was being able to kind of own this piece of their own history. And that's, of course, in just that this NFT itself is the first step into the blockchain for Michelin. It's a big deal for their own history. And so they're saying, you know, "Keep this as like a memorabilia or collectible for, you know, it'll forever represent this moment in time" for them as a brand. The second is more of these experiences. And to provide these experiences to their people.

So there's, I think there's like access to races and other like auto shows. You get dining at Michelin-starred restaurants, which I thought was pretty funny. They even mentioned a possible utility of being able to collect like heritage items or a new pair of tires. I had read that in the Discord specifically in the FAQ, they said that was one of the utilities. I haven't seen that on the website. So we'll see if maybe that is a possible utility for the future. And then the last part to the like one, two, three is digital experiences as well, which we've seen a lot like for instance, Starbucks Odyssey with their metaverse experiences. And then going ahead now into what they've kind of unveiled so far since the first mint was – or the first launch was last month now – we have the first month of perks we're seeing they made a like formal post that says November's perks. And so I'm going to kind of like go through what they're saying for this month specifically, and then what they did for October as well. But so for November, there was a raffle for some one of their yearly annual events of some sort.

There was access to a free claim, which is going to be what they're calling a "heritage poster." So we don't know the full details on that yet. But another benefit that they'll be able to claim. They're also giving access to a digital museum that they put together. So that kind of pays homage to the digital experiences. So whatever this museum might be – I know Disney did something where they celebrated their 100th year of music and they had a big like musical and bring them where you walked through and you could see like the whole timeline of Disney, it was all interactive, really cool. So maybe they pulled some inspiration from something like that. And this Michelin Museum will kind of resemble their full history and heritage. And then the other one was tickets to one of the Barcelona races, I believe. So it was like a, a high-tiered set of tickets.

And so already, I mean, if, if that's your thing and you want to be able to have access to those like races and experiences, I feel like for the first month, whether they're starting really strong and it might go down from there or that this is just the expectation and it'll fluctuate throughout the months. I think that that's a pretty strong like first-month offering just with all the opportunities there. And then last month's was a claim for the Heritage Poster Collection, which is what's now happening this month. So there's going to be –it's actually tomorrow, November 10th I saw – is the Heritage claim. There's gonna be, I think it's like a day, a couple of days or two to claim one of these. So all of the current 3xplorer holders will have access to it. It's going to be another technically like mint claim on their website. And I know that those will be tiered in rarity as well.

Berlind: And so this is what they call token gating, right? They're basically saying, to gain access to any one of these things – whether it's a raffle for something or to be in the pit crew at a race or to just go to a race, clothing, free set of tires, whatever it may be – the first thing you have to have is the token itself that they sold 2,400 of. And then that's what gets you access [to] these other benefits and that's essentially a form of token gating. And I think we're seeing token gating showing up pretty much across all these global brands that are experimenting with NFT programs. You talked about it in our discussion about the dotSWOOSH program and the TINAJs. We're seeing that with other programs as well. We're seeing that, for example, with the adidas ALTS program. They gated the access to their collaborative drop with Montclair – between Montclair and the Adidas originals brand to holders of an ALT NFT. So that seems to be part of the typical go-to-market motion for a lot of these big brands.

Waldman: 100%. And I think that's also kind of paying homage to the fact that this is a long-term play here. And so, whenever you maybe decide that you no longer want to hold this or you no longer are going to, you know, reap the utilities or benefits there in all the token gated stuff, you can pass it on to someone else. And that's where token gating is really so special because the next owner can have those benefits and Michelin itself doesn't need to go to its email list and say, all right, well, Sophie sold the NFT, now who has it? How can we give these benefits to them?

Berlind: You just get them.

Waldman: It's on-chain and they just have that with the new owner and they don't need to know Sophie's name. They just see that there's an owner to that asset.

Berlind: Although I will point out that in the case of Louis Vuitton, they issued, they did a digital play with their steamer trunks and an NFT to go with them. [For] these steamer trunks, the physical steamer trunk was $39,000, right? I don't know who has that kind of money to pay for a trunk, but okay, there's a bunch of people who do.

Waldman: Yup. Yup.

Berlind: There are people paying $1,600 for shirts in the Prada cryptid program. I mean, there's people out there with a lot of money laying around.

Waldman: Yeah.

Berlind: And then, of course, that steamer trunk came with an NFT that matched it, what they call the Digital Twin.

Waldman: Yeah.

Berlind: And that NFT is a soulbound token. And you are no stranger to soulbound tokens because when you first entered the .swish program, the Nike dotSWOOSH program, they issued you a soulbound token as a token that represented your essential ticket into the program and ability to participate. So yes, these things do go on-chain, but it depends on the brand, not every brand lets people pass those NFTs along to the next person in the way you just described. And so that's just something that other global branch should think about. I, for one –  I was a little turned off by that. I thought, "Boy, that's not very blockchain-like of Louis Vuitton –"

Waldman: Yeah.

Berlind: To make an NFT a phygital pair and not allow them to be passed along in the way that a lot of these other programs, whether it's the adidas ALTs program or the Starbucks program or Michelin or even Nike even though they use some of them use custodial wallets allow.

Waldman: Yeah, the whole soulbound thing is really interesting. I think it just depends on kind of what the brand is doing. So of course, with Louis Vuitton's case, just to quickly go into that, like they are creating a personal physical trunk for each of those holders. And the holders will also receive invites to the fashion shows and maybe some more like luxury-viewed events. And so I think that the reason why they probably went more toward a soulbound token is because they start production for that expensive, you know, custom trunk for you, and then you send it to me and I now claim mine. It's [a] conflict of interest. It kind of adds extra mess to the entire, you know, experience. And so I feel like they went that route. [I'm] totally just guessing here to avoid that. And then if you look at something like Michelin, they're like, no, you might, you know, come take the benefits this month. And next month, if you want to pass it on to someone else or share that with someone else, that's an option for you as well. So, having both.

Berlind: All righty. Well, Sophie Max Walden, you're the Customer Journey Analyst here at Blockchain Journal. Thank you so much for sharing all of your observations. I'm hoping that other global brands and enterprises out there will appreciate your insights as they go to execute on their NFT programs for generating customer loyalty and customer engagement, fan engagement. And we'll see you on the next podcast where we'll talk about one of the other programs. Thanks again.

Waldman: Thank you.