Web3 is opening up new avenues for brands to revitalise their loyalty programmes and foster engagement and community among supporters.
The rise of Web3 sees the internet shifting into a token economy where blockchain and decentralised applications allow user ownership, and the potential for users to benefit economically from these tokens.
Tokenization opens up huge opportunities for brands to boost engagement and rewards. Digital tokens – also known as non-fungible tokens, or NFTs – can be used to represent ownership of digital assets and access to perks, a key part of the appeal of using them in loyalty programmes. They also offer a transparent and secure record of data and rewards, thanks to the decentralised blockchain technology they are built on. Perhaps most importantly, digital tokens are extremely flexible; they can be tailored to meet the specific needs of a brand and its customers.
Utility NFTs bridge the physical and digital world by acting as digital tokens that give access to real-life benefits. This could be anything from early access to new products and limited-edition releases to exclusive discounts or in-store events.
When it comes to building loyalty, Web3 offers huge advantages. Tokens can be used to gamify interactions, track user engagement and reward loyalty in a tangible way with real-world perks. There is also plenty of scope for cross-partner programmes, thanks to interoperability and smart contracts automating many of the fiddly processes involved in setting these up (see Starbucks’ loyalty partnership with Delta Airlines).
Brands can also leverage Web3 to enable new community interactions. Decentralised autonomous organisations (DAOs) are online organisations with no centralised leadership or governance. Brands can tap into the structure of DAOs to allow user communities to vote on upcoming decisions, from the colourway of a new product drop to selecting the next partnership. DAOs can be configured to give certain token holders’ votes more weight, depending on their history of engagement, which tokens they own, and rate of participation.
Here we highlight some key Web3 loyalty programmes to know:
Starbucks
Starbucks is rolling out a Web3-powered loyalty programme that integrates blockchain technology into its existing member scheme.
First launched in September 2022 to a small number of existing members and staff in the US, the initiative was opened up to more users in January 2023 and will continue to expand this year. The platform was created together with Web3 loyalty platform Forum3.
Members are invited to take part in interactive ‘journeys’, collecting NFTs and points which they can use to unlock benefits and experiences. Activities include a virtual tour of a coffee farm, trivia about the brand’s heritage, and interactive mini-games. As users earn more points, they can tap into higher levels of rewards, with the highest tier offering access to exclusive events and an IRL trip to the Costa Rica coffee farm.
A partnership with NFT marketplace Nifty Gateway will allow users to buy and sell the ‘collectable stamps’ (Starbucks does not directly refer to the tokens as NFTs) to other members. In order to make the experience more accessible, users will be able to make transactions using a credit card, with no crypto wallet required.
Odyssey’s launch makes Starbucks one of the largest brands to incorporate NFTs into its loyalty programme, and the level of success and engagement it enjoys will act as a bellwether for other brands looking to operate similar programmes.
Nike .SWOOSH
Currently in beta, Nike’s Web3-based .Swoosh platform is looking to build a virtual community for fans to congregate and engage with the brand in a meaningful way.
Users get access to Nike virtual collectibles including shoes and apparel that can be worn in games and digital experiences. These assets also grant holders access to exclusive events and experiences, and can be traded with other users.
The platform will be focused on co-creation as it expands in 2023. Members of the community will be able to enter challenges to co-design virtual products with Nike, with royalties awarded to the designers of winning entries.
Nike is using the platform to forge links with local communities and creators by hosting events at affiliated stores, looking to build a community that is as diverse and equitable as possible, in line with the brand’s wider diversity initiatives. In February 2023, a Swoosh event at Washington DC cafe and clothing store Somewhere attracted local artists, sneakerheads, NFT collectors and other creators.
YSL Beauty
YSL Beauty is steadily building out its Web3 loyalty programme, using NFTs to enhance the online shopping experience for customers.
In January 2023, the brand kicked off a two-part Web3 campaign created in partnership with Wunderman Thompson and NFT experts Arianee. Customers who purchased the brand’s Black Opium fragrance online in France, the UK, the US and Australia were gifted NFTs granting access to gift vouchers and exclusive content.
For the second part of the campaign, owners of the YSL Beauty Block NFTs were also given the chance to purchase a second round of NFTs designed by female artists. All proceeds from this part will go to Abuse is Not Love, a partnership between YSL Beauty and non-profit organisation Women’s Aid helping to protect women across the UK from abuse by their partners. This approach helps to bring a multi-layered and purpose-driven function to the campaign.
The launch comes following a successful collaboration in 2022 with Web3 platform PooLs for its Golden Block and Pride Block drops, which helped it build a community of 24,000 NFT holders.
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