As competition increases locally and globally, retail brands are increasingly turning to innovative technologies like cryptocurrency and blockchain to assist in customer retention and improve sales performance.
Shopping has become a part of our everyday habits and a popular pastime that generates trillions of dollars for the global economy annually. In fact, a recent PWC survey has shown that a majority of global consumers plan to shop and spend either more or the same amount in the near future. The same survey reveals that consumers are optimistic when it comes to shopping and are willing to spend on both experiences and products.
When it comes to shopping, the mobile age has irrevocably changed our shopping habits. With one of the highest mobile penetration rates (78%) around the world. In We Are Social’s recent digital report, it was revealed that 73% of Australians have searched online for a product or service. Furthermore, our recent survey found 31% of consumers are also using a digital device to assist them while shopping in-store.
Be it shopping online or from a physical store, our purchase decisions can either come on a whim, or after we’ve conducted extensive research– what’s in the product, where it is from and product reviews. Not only that, there are also other crucial factors that play a part in the different stages of shopping before consumers make their final purchase decision. These factors include the overall shopping experience, price promotion, and the convenience of payment.
The changing shape of loyalty programs
As competition increases locally and globally, brands are finding more ways to add customers to their loyalty programs – exclusive offers, discounts and rewards – to assist in customer retention and improve sales performance. Some of the more prominent loyalty programs in Australia include Coles’ flybuys, Woolworths Rewards, Qantas Frequent Flyers and Virgin Velocity, where they have a combined number of 37 million memberships.
However, the 2018 for love or money research study revealed that instead of loyalty points, which has traditionally been the case for most loyalty programs, there is an increasing number of Australian consumers, notably Millennials, who are interested in earning cryptocurrency rewards. In fact, 36% of loyalty program members wished to be rewarded with cryptocurrency instead of points, and this interest increased to 55% for Millennials.
This change in loyalty rewards comes as no surprise given that cryptocurrencies have been a topic of interest these days, starting from when Bitcoin – the world’s first cryptocurrency, set a record high value of $20,000 USD in mid-December last year. Today, there are over 1,600 different crypto tokens out there, and brands are hoping to leverage this blockchain technology to differentiate themselves from others.
For instance, Japanese e-commerce giant, Rakuten revealed its “Rakuten Coin” initiative aimed at expanding its international customer base. This cryptocurrency will be used as part of the company’s points-based loyalty rewards system. Further to this, American rental-car company EZ Rent-A-Car, has also started to offer cryptocurrencies as a reward option for consumers with the introduction of CryptoRewards Exchange (CRE).
In Australia, Melbourne blockchain start-up, Shping – a global shopper-marketing and consumer engagement platform, uses Shping Coin ($SHPING), an a cryptocurrency to reward consumers for actions such as writing a review or scanning an item within the Shping app. This is a single universal rewards currency that any brand or retailer can take advantage of.
When blockchain meets retail
As cryptocurrencies continue to make its way into the retail industry in the form of loyalty rewards, companies are also exploring more ways to pivot their business to blockchain. Notably, brands and retailers are using blockchain to incentivise interactions and activities amongst consumers where actions like writing a product review, referring a friend, or rating a product will earn them crypto coins that they can use in their next purchase – further simplifying the payment process.
With blockchain, companies like Shping are also creating platforms built on the GS1 standard to allow consumers to scan barcodes that will reveal whether the items have been recalled and verify its authenticity; enabling more transparency between brands and consumers. Furthermore, incentives are also given when consumers are active on the app such as filling in a survey or watching a product video on the app.
The incentives do not just stop with consumers, but are also extended to brands where they get to communicate with their customers directly, obtain consumer and behavioural analytics, and personally market to identified consumer groups.
As retailers and brands begin to leverage blockchain technology, they create a decentralised global marketplace that benefits everyone. Even though blockchain technology is still at its infancy, it is promising to see that it is now being utilised more in the shopping and retail industry, and within a short span of time, we will be able to see how blockchain will revolutionise retail.
Gennady Volchek is the founder and CEO of Shping, a first of its kind, blockchain-based brand protection, traceability and shopper marketing platform. Shping recently added a revolutionary cryptocurrency-based reward system to allow product brands, retailers and related organisations to reward consumers who use the innovative Shping app to help them make smarter and safer shopping decisions. Learn more at shping.com.