“Every once in a while, a new technology, an old problem, and a big idea turn into an innovation.” — Dean Kamen
Almost 70% of shoppers globally belong to a loyalty program, yet most people, although accumulating these reward and/or loyalty points, seem to hardly use them. The main reason being that they can never accumulate enough points required to exchange for a worthwhile reward and when they do, it is difficult to achieve — like a seat or class upgrade with an airline.
Many loyalty programs and coalitions have major issues with massive accumulations of points sitting on their balance sheets as liabilities. These points are viewed as money that is owed to people, sometimes this in the hundreds of millions of dollars.
Both display clear problems that are on each sides of the equation, for the consumer and the brand loyalty program.
Loyalty in many cases has become a sales tool, like a discount or sale campaign in disguise, to look like a benefit for a customer’s purchases. Choice is the main driver when it comes to shopping today and people have many screens and of course windows to see merchandise Despite this, many gravitate back to where the loyalty program resides and that, in many cases, is in-store and not always online.
Onboarding consumers to a loyalty program in the digital age is a lot easier and faster than ever, but there is often a large gap between the number of programs in which shoppers are enrolled and the number in which they actively participate. Make no mistake, loyalty programs are intended to ultimately increase a retailer’s share of the consumer’s wallet. While two-thirds of global respondents who participate in loyalty programs (67%) somewhat, or strongly agree, that they join these programs only to get free products or discounts. The advent of digital channels opens up loyalty programs to be personalised for the consumer through the use of mobile apps, email and in-store interaction. This allows the loyalty program to be more customised for each member of the program and influence repeat purchase behaviour.
Financial rewards are the most highly-valued loyalty program benefits for members of all ages. But product discounts, cash back or rebates are rated higher by older respondents than by their younger counterparts, where personal offers and products are seen as a benefit.
Having a loyalty card or other form of loyalty identification at checkout is still required in just about all major programs. In many cases this has led to large, heavy wallets and/or loyalty card apps on our mobile phones. In 2018 this should not be the case as loyalty should seamlessly be part of the payment process.
Loyalty should be like other new technologies, simple, seamless, cross-border and rewarding. That technology is now here and its based on the Blockchain.
The Decentralized Ledger Technology (Blockchain), that is available to us today will revolutionise every industry sector on a global scale. What has taken the Internet and World Wide Web to achieve in 25 years we predict will be transformed in far less than half that time.
It will decentralize stored value, accumulated via a loyalty program or scheme, into a stored value transferable unit. This will have a clear offering to a loyalty scheme participant, but also to the organization distributing the reward units, or points, via their proprietary loyalty scheme.
Today’s consumer shops via the omni-channel method, starting their path to the final purchase from a call-to-action from one of many screens, (mobile, laptop, desktop, digital billboard etc.), researching on Social media, talking with friends and of course visiting stores. Loyalty has now been reduced to the approach that a repeat purchase will equal more reward points.
Having so many brands available to the average consumer, via digital channels, means that there are hundreds of reward programs run by multiple loyalty schemes. In many cases these programs are unified in larger scheme coalitions and run by large global organisations such as airlines or payment card schemes.
After many months of evaluation, the team at RainCheck believe that the best DLT platform to build that technology on is the Stellar platform.
The Stellar project is one that has been seen as having great potential to influence the financial sector. Besides its primary focus of providing a network for faster and cheaper cross-border payments, the project is also able to hold tokenized assets and coin offerings. More voices from the crypto space believe that it will eventually become the crypto of choice for Central Banks all over the world.
Stellar is the only DLT technology that allows funds to be sent and received very quickly and almost at no cost, and that makes it a perfect network to handle a loyalty rewards system.
The team at RainCheck will build the first Blockchain solution for Loyaltybased on the Stellar protocol due for initial release later this year.