Consumer brands are under constant pressure to connect with consumers. Likewise, retailers experience increased competition from manufacturers and suffer due to information asymmetry with larger distribution/retail partners. Brands like Amazon collect customer data, including pricing, behavior, and preferences.
Retail stores are in an unforgiving battle with online retailers. The latter has the advantage of operating costs, product range, and data. Meanwhile, online retailers also face the challenge of pricing products, whereas reputation and service levels are unnoticed.
In addition, online retailers are facing difficulties with the distribution expenses mainly due to a higher rate of returns. Sometimes, the rate of return is as high as 40 percent.
Responding to these day-to-day challenges, brands are now looking for ways to expand the geographical reach of their market, raise brand profile, and collect data directly from consumers.
Blockchain technology helps brands to accomplish their goals. For example, brands can incentivize their consumers to scan product tags for the following:
- To get all information related to the product like exclusive content and provenance data, to increase brand value
- Conduct quizzes and surveys to collect data from end-users directly
- Offer incentives and rewards to consumers for referring the brand and its products to others
- Create opportunities for cross-selling through service agreements and selling insurance
Blockchain Technology – The Future is here
Blockchain technology ensures that you receive reliable data only. For instance, it pays attention to provenance, makes reward-based marketing strategies more cost-efficient, and ensures smooth functions. Even when it is a global market, Blockchain is a winner.
There is no need to handle multiple currencies or a complex system to run loyalty programs, balances, or transactions. Blockchain securely stores data and makes interoperability easier across systems.
How Retailers Benefit?
Blockchain technology has several advantages for retailers. They can also use a similar reward-based or incentive-based marketing technique to improve data collection and consumer engagement. In fact, retailers can also offer rewards to consumers visiting their stores, instead of discounts, thus adding more value to the relationship. It makes the experience exclusive and is a more controlled approach.
Brands can also benefit from supporting the initiatives taken by retailers, as consumers are more likely to spend more than online shoppers. An improved experience could also help to create brand value, awareness, and loyalty. Blockchain technology works as a catalyst between consumer brands and high street retail market to make viable joint initiatives.
How Blockchain Impacts the Connection Between Brands and Consumers?
Some mutual benefits that connect brands and consumers through Blockchain are:
- Decentralized System: Blockchain allows everyone to participate
- Anonymous System: Participants are not dependent on their identities to get leverage while negotiating or during a transaction
- Democratic System: Participants have every reason to uphold their integrity for all exchanges
A combined benefit of this framework provides support to the growing popularity of value exchange, thus empowering consumers and building trust to engage with each other. Furthermore, the promise to automate IoT and AI ensure that the demand for a secure and transparent means of exchange would revolutionize eCommerce.
Cryptocurrencies are becoming an increasingly popular way to store monetary value, just like gold. With Blockchain technology, it is possible to transform consumer attention as well as permission among advertisers, publishers, and consumers.
Blockchain and Consumer Identity
One of the major benefits of Blockchain to consumers and marketers is its consumer-owned identity and management. Blockchain technology promises to allow people to have absolute control over their personal data and the ability to limit data sharing.
While developing a strategy, brands must provide consumer-owned identity management. They should also understand how it would affect customer relationships. When consumers are given the ability to own and control their identities, which they may or may not reveal to companies, marketers should consider some new ways of building relationships, offering personalized experiences, and creating loyalty programs.
The central point is to determine a way of creating an excellent consumer experience for consumers whose information is hidden.
John Wantz, the CEO, EVERY, revealed, “We want to court brands and shoppers into adopting a protocol where the data is not centralized – it’s decentralized; it’s owned by them.”
Privacy and Security
Privacy is an increasing concern, which makes the Blockchain-based identity management system more important. It gives consumers complete control of granting access to any personal data, payment information, and/or preferences. To get access to this information, marketers must embrace technologies like BAT (Basic Attention Token), which demonstrates a commitment to transparency and fair value exchange to get consumer attention.
Adapting Blockchain-based consumer identity systems within the brand’s commerce ecosystem and loyalty reduces data liability and risk related to data security. This is critical to maintain and protect brand reputation as consumers are likely to set preferences and forget about it.
Accepting and enabling the power of anonymity, democracy, and transparency can help marketers to maintain pace and succeed with innovative ways to empower consumers. Marketers, in return, can benefit from stronger loyalty, greater opportunities, increased engagement, and growth.
