Crypto offers a new way to power tried-and-true brand loyalty

Cryptocurrency. NFTs. Web3.

These emerging technologies all hold the promise of unlocking new ways for brands and retailers to reach consumers, and build relationships over time.

Yet for professionals who work at the firms that sell goods, these technologies can be difficult to understand, and new concepts tend to show up frequently. After the pandemic’s digital boom, many people may understand that NFTs are one-of-a-kind digital tokens on a blockchain that are used to create ownership of a particular piece of media. But to put them to use, brands also have to understand tokengating, which is used to create tiers of access to a reward or experience.

But it’s not always required to understand all of the ins and outs of technology first. Rather, professionals must consider how they want to use it.

The concepts above are all being applied to a time-honored practice of commerce: Loyalty. From green shield stamps to grocery store clubs, retailers have long sought to create programs that provided shoppers with perks so that they identify with brands beyond the items they purchase, and increase the likelihood that they'll return.

“At the end of the day, the idea that [retailers] want to engage customers and maintain loyalty is not new,” Nancy Gordon, chief product officer for loyalty and rewards at Bakkt, a publicly traded digital asset platform, said from the floor of the NRF Big Show 2023. “What’s new is the technology.”

For Bakkt, crypto and loyalty go hand-in-hand. The platform employs the decentralized form of currency to help brands offer programs that provide rewards or create unique experiences for consumers.

Understanding how it all works together doesn’t require a deep knowledge of crypto. Rather, consider another concept that retailers have long embraced: rewards. In-person retail long revolved around driving people to the store. In a world of digital commerce, engagement with a brand can happen across many different touchpoints. Crypto enables this to happen.

“Your customers have lives outside of you, so therefore, one way to engage them is you reward them based upon the behaviors that they take with you. But that reward itself could be more flexible than just something that's in store,” Gordon said. “[It could be] catered towards your existing customer set or a core group of customers or communities. And if you really think about what they're interested in and opening up that funnel to allow them to do things with any currency that they may have collected, it winds up being an accelerator.”

Rewards are part of a brand experience. So there are advantages to being a facilitator, even if the end result isn’t a purchase from your brand. This cross-pollination is becoming more evident throughout the consumer economy. For instance, Lyft passengers can now earn Delta miles.

For example, a number of brands and retailers work with Bakkt to run a program for brands that allows customers to use loyalty currency to pay for Apple products.

Bakkt Chief Sales and Marketing Officer Mark Elliot said it's an example of a new model emerging for a rewards program where “I physically went to a store, and then I digitally bought something online from another brand, and the combo of those two unlocks something else."

Crypto makes it easier not only to pay for the item using reward currency, but also for brands to verify that consumers took the necessary steps.

"You could either do all the heavy lifting of integrating those two companies’ CRM systems, which is really, really hard and expensive. Or, the token is the proof that the customer did the number of things they needed to do across multiple brands to reach some new level of status or new experience or access something," Elliot said.

In the end, technology advances reduce complexity and create experiences that move across mediums. That holds true for crypto, just as it has with each new advance over time.