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Do you know how luxury brands like Starbucks, Nike, Porsche, and Prada build customer loyalty using loyalty tokens?
Years back, luxury products were bought as they were rare, prestigious, and valuable.
But in today’s fast-evolving digital economy, customers are no longer just purchasing the product. Instead, they are acquiring ownership and a share in the brand’s legacy.
But how?
This is where tokenization comes into action.
Tokenization is the process of creating a digital representation of a real thing on a blockchain network.
By tokenizing the luxury products, the premium brands are building strong customer loyalty. They have also unlocked new revenue streams and have started building connections with customers in this digital world.
Why Tokens Work Better In Building Customer Loyalty?
Generally, customers are purchasing luxury items with the expectation that the product value will increase over time. But this cannot be achieved in traditional loyalty systems.
This is why tokens are more effective in building customer loyalty than traditional systems.
Here are the top 3 reasons why tokens work better in building customer loyalty.
1. Creating Emotional Ownership
Obtaining a token from a luxury brand is not just a coupon, but a digital asset that can be traded or showcased. It creates an emotional ownership for the customers, thus building a strong connection between the brand and the customer.
2. Ability to Trade
Unlike discounts and static rewards given by the brand, the value of the token can increase over time, depending on the supply and unique utilities. This adds the ability to trade the token for other digital assets on a secondary marketplace, enhancing the customer loyalty program.
3. Premium Privileges
Holding specific types of tokens can give access to premium privileges such as access to special events, early product release, or even decision-making within the brand.
Do You Know How Luxury Brands Benefit Through Tokenization?
Luxury brands do not just create tokens to evolve with the trend. This approach helps them to address certain challenges and to open doors to several new opportunities.
- Creating digital tokens for the branded products can help brands to tie the digital token to the physical goods, thus helping premium brands to maintain brand integrity and to tackle first copy or counterfeit products.
- Tokenization of their brand products helps brands earn royalties each time their token is traded on secondary marketplaces. This creates a new revenue stream for the premium brands.
- Brands create a limited number of tokens that are connected to special products, VIP rewards, and exclusive experiences. As the tokens are scarcely available, it creates a demand among customers, and they most likely purchase them, creating brand desirability.
- Every action of the customer in the tokenized loyalty program is recorded on the blockchain network. This provides brands with a detailed view of customers’ behaviour and interests. Therefore, helping them to identify top-performing products, spot trends, and implement a customer retention campaign.
- Tokenizing luxury products helps brands to showcase themselves as forward-thinkers. They are also creating an image that the brands keep their customers first by providing ownership and control over the brand.
List Of Brands That Have Tokenized Their Products
Some of the top brands are ahead in the tokenization sector, where they have already tokenized their valuable and branded products.
Let’s go through some of the brands that have adopted tokenization in real-time.
Starbucks
Starbucks launched its Web3-enabled loyalty program called Starbucks Odyssey. Customers participated in this journey to earn Journey Stamps, a Starbucks-branded NFT. Holding this token gave access to exclusive experiences, early product access, and curated merchandise.
Jacob & Co
Jacod & Co introduced a collection named Astronomia Metaverso, which is a blend of digital and physical luxury. The NFTs in this collection served as a key to unlock its physical timepiece, thus creating a connection between digital and tangible worlds.
Clinique
Clinique, a top skincare brand, tied ethnicities and skin tones to its NFTs. Customers holding these NFTs were granted early access to new products, invited to exclusive events, and entered into giveaways. This approach created a value-driven engagement between the brand and the customers.
Prada
Prada launched a limited edition of handbags that were tied with an NFT. These tokens not only provided authenticity but also granted access to various events and early access to future collections.
Rolex
To combat counterfeits and to earn royalties on resales of the watches, Rolex introduced tokenized certificates for its watches. It also enabled customers to track ownership and history of the watch, enabling them to verify authenticity on the blockchain network.
Coca Cola
To mark the global events like International Friendship Day and Halloween, Coca-Cola launched its limited edition of digital collectibles. These tokens came with the benefits of surprise gifts and virtual party invites. They also auctioned with the proceeds going to charity, enabling them to engage customers in a modern way.
Why Tokenized Loyalty Programs Remain A Smart Move For Premium Brands?
Tokenized loyalty programs are more engaging when compared to traditional loyalty programs. Here are some reasons why tokenized loyalty programs remain a smart move for luxury brands.
- Brands that integrate tokenized loyalty programs can reach a wider customer base through cross-platform collaborations, which help them increase brand visibility.
- Brands can enhance customer loyalty by providing tokens that can be claimed for discounts, special products, and more.
- Brands can boost customer engagement through games, where they can earn tokens by completing tasks or participating in brand-related activities.
- Tokenized loyalty programs enable customers to keep track of their token activity, building trust in the system.
- The value of the loyalty program can be increased by partnering with other businesses, allowing customers to use their token across various platforms and redeem rewards for different contexts.
How Tokenization Is Transforming The Future of Luxury Brands?
The era of traditional loyalty programs has come to an end. Premium brands are adopting tokenization-based loyalty programs to stay ahead in this tech world. Here is how tokenization is transforming the future of luxury brands.
By implementing tokenized loyalty programs, the luxury brands can target high-net-worth individuals who want to hold tradable assets that represent the status and history of the brand.
Top brands' loyalty token automatically provides customers with several benefits, like access to private events, early product launches, or even personalized service without any delays.
As the tokenized loyalty programs occur on blockchain networks, they ensure to store customer records and their journey, while also protecting their privacy.
Final Thoughts
As the world is shifting towards digital approaches, luxury brands launching tokens for their premium products are making a smart move to boost customer engagement and also to build customer loyalty.
Top brands like Prada, Starbucks, and Coca-Cola are creating their tokens to provide access to private events, early access to new products, and other benefits. This has created a drastic engagement among their customers.
By leveraging blockchain technology and digital tokens, luxury brands can build trust and drive long-term customer loyalty. This approach provides flexibility and control for the customers.
If you are a top brand wanting to enhance customer loyalty, then this is the right time for you to launch your own crypto tokens and to improve customer loyalty through tokenized assets.
