Credit: Shutterstock photoBy Gabriele Giancola – Co-Founder and CEO at qiibee
Technology has transformed our lives rapidly within the last twenty years, particularly when it comes to consumer satisfaction and loyalty. We have the ability to engage with our favorite brands at the click of a button. Brands and retailers alike can now express their ‘personalities’ through social media and interact with their customers instantly, through internet and technological advancements, however this is only scratching the surface of the developments we have yet to experience.
Traditional loyalty programs today, are surprisingly prevalent, with numerous coffee shops and businesses opting for a more traditional approach. However, at present, an exciting disruption is taking place in the loyalty sector through blockchain technology, transforming the consumer experience, with increased data security, efficiency and transparency. What this disruption brings to the loyalty sector is the secure storage of data, a fast-efficient backend system and a transparent system where you can track your transactions.
Blockchain provides an ideal framework for addressing the weak points of today’s loyalty market. It’s chains of encrypted information ensure it is secure and immune to modification, meaning that it cannot be hacked, which provides great assurance to business and brands alike.
Awareness and concern regarding consumer data security has peaked today, with a growing concern surrounding the security of one’s personal and private information, particularly when it comes to personal addresses, email, debit cards and credit cards. Most loyalty programs today have one central database management system, where all of the data is in one centralized place. This can leave the database vulnerable to hacking, with companies forced to pay high fees to eliminate the prospect of a hacker attacking their database. This can have grave consequences for consumer trust, for example, a study titled [1]‘Global Survey in Internet Security and Trust’ revealed that 78% of shoppers say they are likely to stop using an online retailer if it was hacked and their credit details were stolen or leaked.
Examples of recent loyalty hacking scandals include, KFC in the UK, they revealed their loyalty program with 1.2 million members had been hacked last year, where some members personal data was thought to have been compromised. Similarly, in the US, the Toys R Us rewards points system was hacked, with some names and addresses from the rewards program members thought to have also been compromised in the attack, however no credit card details were stolen in the process.
In Australia this year, Woolworth’s Reward Cards were hacked with points stolen from new promotional customer accounts, offering 500 bonus points with an estimated value of $25 AUD. Thankfully, there is a solution going forward that can prevent hacking activity, as blockchain technology removes these threats, offering greater security for consumers and their valued personal data.
Interestingly, as the blockchain is an open public ledger, the data is no longer owned by a brand or business. It is in fact accessed by the companies who are at liberty to analyse and assess the data, further reducing the risk of consumer data being easily exploited and sold to interested companies.
Not only do businesses have the opportunity to access the data, similarly consumers engaging in a loyalty program can also access their wallet on the blockchain to view their transactions. Their identity is sealed behind a wallet code, where all transactions and the loyalty they have accumulated are available to view. This is innovative given the fact that consumers need not only rely on receipts from their purchases, they can also access the public distributed ledger to verify their purchases and their accumulated loyalty.
When blockchain technology is utilized on a loyalty platform, it also opens the cryptocurrency world to loyalty program users. Offering consumers new opportunities to engage with digital currencies offering low transaction fees and new investment opportunities.
Blockchain technology enables tokenization, offering real value to consumers. Tokenization provides loyalty through tokens rather than a point system, enabling the transfer of a token to a cryptocurrency or an everyday fiat currency. Offering great flexibility and choice to consumers when making decisions about how best to spend their loyalty, rather than restricting them solely to the loyalty program. This kind of value and flexibility is not reflected in traditional loyalty systems.
While there are just a few advantages outlined regarding what blockchain technology will introduce to the existing loyalty market, the real possibilities and opportunities have yet to be imagined. This digital disruption urges current and future loyalty program owners to rethink their fundamental approach when delivering their customers, the best possible experience and rewards for their loyalty.
About Gabriele Giancola, Co-Founder and CEO at qiibee
Gabriele is one of the Co-Founder and Chief Executive Officer at qiibee, a decentralized, Ethereum blockchain-based loyalty ecosystem. By providing a loyalty platform and developer interface on which every loyalty application can be tokenized, qiibee aims connect a fragmented market, increase its efficiencies, and remove the central data authority.
Gabriele holds a Masters in Business Management from the University of St. Gallen in Switzerland and, as serial entrepreneur, co-founded different companies such as SuitArt, a Swiss-based company specialized in the digitization of premium products and gratis-auto.ch, a start-up focused on mobile outdoor advertising and a mining farm with around 60 miners.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
