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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.
Trending in Operations
Can Shop Cash entice more users to use the app for browsing and buying?
Shopify is launching a new rewards program for items purchased through its checkout system.
Shop Cash will provide the opportunity for consumers to earn 1% back on purchases made through Shop Pay.
The feature includes a direct tie-in with the Shop app. Users can check their balance through the app, and the rewards are redeemable for future purchases through Shop, as well.
“This is a coming of age moment for Shop. It’s become an incredible app that allows shoppers to discover great brands, check out with one tap, and track orders in real time,” said Harley Finkelstein, president of Shopify, in a statement. “Shop Cash represents the next evolution of Shop, connecting independent brands to more shoppers, and rewarding those shoppers for being loyal fans.”
The launch falls on Shopify’s 17th birthday, so the ecommerce software company is giving away Shop Cash to celebrate. For Shop Day, Shopify partnered with dozens of merchants, including Trixie Cosmetics, MrBeast and Monday Swimwear. They’ll share custom links across channels that offer cash to spend on the Shop app. In all, Shopify will give away more than $1,000,000. Brands will also be running exclusive Shop Cash offers throughout the day.
The rewards program marks a new way that Shopify is aiming to transform Shop into more of a shopping app where users can discover new items, extending beyond its initial use for post-purchase order tracking and management at launch in 2020.
Shopify has been making moves over the last year to provide more opportunities to browse and buy recommended products, as well as giving brands more tools to showcase storefronts and tell their stories. With Shop Pay, the app offers one-click checkout. There are signs that it is all inspiring users to seek out the app. Shopify said 35% of the orders on the Shop app are repeat purchases.
With more brands joining the app and infrastructure for the shopper experience and checkout in place, rewards can help make the app stickier for consumers. The opportunity to earn cash, redeem it and even check a rewards balance are all reasons to keep returning to the app, and make it a destination to shop.
Shopify has long been known as the infrastructure layer of commerce, as it provided the tools for brands to run and manage an online store under their own name. With the Shop app, it is aiming to make Shopify itself a destination for shopping. It remains a nascent effort, even as more brands have taken advantage of the new features to enhance storefronts.
This comes as marketplaces continue to rise across ecommerce, and giants like Amazon and Walmart experiment with tools that do more to boost discovery of new products.
Social media has long been the engine of discovery in ecommerce, especially in the direct-to-consumer realm that Shopify has owned. Users found products on Facebook or Instagram, then finished checkout on a brand's phase. With the push toward privacy making performance marketing more difficult and customer acquisition costs rising, the ecommerce platforms are attempting to take that power into their own hands. With advertising placed close to the point of sale through retail media and the ability to check out on the same page where a user sees a product, marketplaces and Shop are realizing new opportunities to attract, convert and deliver for users within one app. For Shop, the trick is to attract more shoppers to the app. Rewards like Shop Cash are a carrot to do just that.