It is commonly estimated that retaining a customer would cost 5 to 7 times less than gaining a new one. In the digital age, the value of loyalty is still strong, but consumers’ expectations in terms of rewards have evolved. To rekindle the flame, brands are testing new loyalty strategies that incorporate the Blockchain and NFTs (Non-Fungible Tokens), digital collectables authenticated by a token in the blockchain. Examples include Coca-Cola, Singapore Airlines, and the Paris Saint-Germain Football Club.
The case of Coca-Cola, from collector glasses to NFTs
Coca-Cola has been playing the collectors’ items card since the 1900s with its collections of glasses with the brand’s logo. In 2019, for its 100 years in France, Coca-Cola had also launched a special operation with McDonald’s to revisit each decade of these collector glasses “icons of a century-old tradition”. (details on the Coca Cola France website).
Coca-Cola also maintains this fever of the “collectionnite” in the virtual universes or metaverse. The brand launched its first collection of virtual objects to be collected in NFT format on July 30, International Friendship Day. The auction of this first “loot box” reached 137 ETH (in the virtual currency Ethereum, a competitor of Bitcoin, which represented nearly 285,000 Euros on that date), to the benefit of the association Special Olympics International.
The inspiration for this type of gift comes directly from the world of video games where “loot boxes” allow players to acquire weapons, powers, or accessories for their avatars.
The Coca-Cola loot box contained virtual objects that can be used in Decentraland, the 3D virtual decentralized platform that runs on the Ethereum blockchain. Like a Coca-Cola jacket that an avatar could wear or a vintage fridge to furnish his digital home. To complete this lot, a real vintage Coca-Cola fridge from SMEG, made in Italy, filled with bottles of soda. This will allow the lucky winner to celebrate his victory in the real world with his friends.
If these strategies play on the codes of loyalty, they also allow to show a more “modern” image of the brand and to reach new targets, as Sylvie Chauvin, president of Catoctin, a consulting firm that focuses on art and NFT, and previously president and founder of the Markets analyst firm, explains: “Brands like Coca-Cola are launching NFTs to boost their image in the digital world with their customers. In the future, major global brands will probably promote many virtual trading cards to exchange. Operations that will require partnerships between brands and artists or art galleries as well as with NFT management platforms for their registration in the blockchain.
The Singapore Airlines case, a loyalty program with 150 partners
Beyond collector gifts, the digital transformation of loyalty strategies can go as far as “tokenization” of the entire loyalty program. This means recording each transaction of a customer in the blockchain to offer him or her access to a certain status and services in exchange.
Airlines are well versed in these customer statuses and credit-mechanics with their loyalty programs turning every euro spent into airline miles. As early as 2018, Singapore Airlines thus pioneered the use of blockchain with the addition of a digital wallet called KrisPay to its KrisFlyer loyalty program. At the time of its launch, this program included 18 partner brands including Lego and Asics. Now Kris+, with more lifestyle offers, the program now has more than 150 partners who accept mileage payments. (details at Futuretraveexperience.com and ledgerinsights.com).
Blockchain technology makes it possible to quickly integrate new partners into the loyalty program and to more easily reconcile payments made in different stores, saving time and efficiency. This approach also allows for a collection of more useful and reliable marketing data on the behavior of customers within this ecosystem of partners and to propose personalized offers to them.
Regarding NFTs, for now, Singapore Airlines only experimented with them in early October 2021 as part of a charity sale for disadvantaged families called “Blockchain for good” (details via Forkast. news and https://singaporenft.org/). The public could participate via the purchase of NFT artworks or by submitting their own NFT creations for sale.
Another airline also experimented back in 2018 with Bitcoin payments and NFTs: the Latvian low-cost airline Air Baltic. Its idea: to have the public vote on the names of cities in Latvia to dress its fleet of Airbus A220-300s. AirBaltic NFT of the most popular cities had also been issued. For airBaltic CEO Martin Gauss, “blockchain technology has proven that it is here for the long haul. After being the first to accept bitcoin payments the next step for us in using blockchain technology is to offer NFTs. NFTs can be used for digital art transactions but can also be extended to tickets for concerts or other single-use coins, including airline tickets. It will be possible to issue limited edition collector NFTs as part of a tourism campaign for cities in Latvia, a destination still unknown to many.” (source DLA Pipper Intelligence),
The PSG case, monetizing the engagement of “superfans
In January 2020, the Paris Saint Germain soccer club became the first club to issue fan tokens with the Socios platform. These tokens allow fans to influence certain decisions of their favorite teams, unlock VIP rewards such as match tickets, access to exclusive promotions, chat and superfan recognition. It’s also a way to monetize fan engagement and offer sports clubs the equivalent of a stock market listing to measure their performance. (details CoinTribune).
Then in September 2020, PSG announced that it would join the Sorare platform, both a global fantasy soccer game and a digital trading platform for trading cards. Collection and game are linked since the value of Kimpembe’s or Marquinhos’ NFT cards, for example depends on their performance during the club’s real games. By being present on Sorare, PSG addresses a new generation of fans, in France but especially internationally. Because if Sorare is a French startup, its audience is international, especially in Asia and Americas (North and South). More than 180 clubs worldwide are present on Sorare, which counts among its financier’s big names like Softbank or the soccer player Antoine Griezmann. (details Sorare-PSG press release and article in Les Echos of September 21, 2021, on the record fundraising of 680 million dollars by So rare)
Finally, in April 2021, PSG launched its first “in-house” collection of NFTs with Parisian artist Ludo. The club said that these collectable NFTs “are intended to further strengthen the ties between the club and its supporters through blockchain technology.” (PSG release details) The collection is a limited edition of 11 unique pieces, variations of an NFT figurine called Lucky Buddy (inspired by Maneki Neko, the Japanese lucky cat statuettes). The variations represent the historical colours of the PSG and its emblem.
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