Tariff flux pushes NFL, NBA to bet big on digital merch

Dapper Labs, a prominent player in the digital collectibles space, is witnessing a significant shift in brand strategies due to tariff volatility impacting physical goods. Vice President of Business Development, Ridhima Kahn, highlights that brands are increasingly exploring digital collectibles as a means of fan engagement and revenue generation, citing successful examples with the NBA, NFL, and Disney. The rising popularity of digital collectibles, such as tradable NBA and NFL highlights within their respective apps, demonstrates the potential for deeper fan engagement and real-world experiences.

Kahn emphasizes the growing importance of online engagement, given the increasing time spent by fans in digital environments. Digital collectibles offer a faster, more accessible, and globally scalable alternative to the current physical goods market, which faces challenges from unpredictable tariffs. This strategy is proving successful, with average NFT sales up 7% quarter-over-quarter, and platforms like NFL All Day and NBA Top Shot generating significant revenue. Flow, Dapper Labs’ blockchain, also shows robust growth in total value locked (TVL).

Improved on-ramping and off-ramping technologies contribute to increased user adoption. Enhanced user experience and positive regulatory developments are key drivers of this growth. While NBA Top Shot sales had dipped previously, the 2024-2025 season saw renewed interest, particularly after integration with OpenSea. Dapper Labs prioritizes understanding user behavior and conducting A/B testing to ensure their products meet fan demand. Direct feedback from VIP collectors informs product development, allowing for efficient and impactful improvements.

The success of IP-backed collections underscores the value of leveraging established brands and intellectual property. The focus is on creating meaningful, shareable, and valuable collectibles that offer personalized experiences, real-world access, and long-term loyalty rewards. However, Dapper Labs doesn’t see digital collectibles replacing physical merchandise entirely, but rather as a complementary revenue stream less susceptible to tariff volatility, offering global accessibility and ease of trading. The company envisions a future where fans can easily access and trade digital possessions on their mobile devices, expanding brand engagement in the digital realm and offering utility that translates into real-world benefits.