The adoption of loyalty has been increasing rapidly among consumers over the last 12 months. The surge in inflation, coupled with the subsequent increase in interest rates, has resulted in consumers seeking more value for every dollar spent. With their ability to provide more value to consumers, loyalty programs have gained widespread traction among consumers as well as businesses. Across sectors, brands and businesses are revamping their loyalty and reward programs to make them more attractive and value-offering for consumers.
With increased activities in the space, the competitive landscape is also growing rapidly in the loyalty programs market. Consequently, to offer innovative and differentiated programs, businesses are turning to non-fungible tokens (NFTs). Over the last 12 months, NFTs have found a place within the loyalty programs ecosystem due to their ability to create a community around a brand. The amalgamation of NFTs and loyalty programs is also reshaping the incentive-driven, transactional nature of traditional offerings.
An increasing number of businesses, across sectors like travel and fashion, have launched NFT-powered loyalty programs around the world. This trend has further continued in H2 2023 in the global loyalty programs market.
Going forward, PayNXT360 expects more and more airline carriers to amalgamate loyalty programs and NFTs, enabling them to innovate and power the growth of their business from the short to medium-term perspective.
In the fashion segment, Lacoste has made use of NFTs to launch an innovative blockchain-powered loyalty program in July 2023. The Undw3 card empowers users to connect their digital wallets to a dedicated online platform, granting them access to a variety of unique experiences and avenues for earning rewards.
The launch of the NFT-powered loyalty program by Lacoste is a clear indication that more and more brands in the segment are increasing their trust and reliance on emerging technology in 2023. In other sectors, as well, the number of NFT-powered loyalty program launches is growing at a rapid rate in 2023.
Starbucks, which popularized the NFT loyalty programs globally in 2022, also launched the Green Apron NFT loyalty program. The unique loyalty initiative presents 5,000 exclusive NFTs, each one of which is inspired by the timeless apron designs that have been a central part of the Starbucks ambiance for more than five decades.
Starbucks Odyssey NFT loyalty program members are offered the opportunity to acquire a maximum of 2 NFTs at a fixed cost of US$100 each, providing customers with a chance to possess a digital representation of Starbucks' historical legacy.
In India, e-commerce giants like Flipkart are also experimenting with NFTs and loyalty programs. The firm, in June 2023, entered into a strategic collaboration with Polygon Labs and loyalty platform Hang. As part of the collaboration, the firms have launched FireDrops 2.0, the NFT-powered loyalty program. The program aims to boost engagement and offer immersive experiences to millions of online shoppers in the country.
From the short to medium-term perspective, PayNXT360 expects more such NFT-powered loyalty program launches in the global market, aiding further innovation in the sector. This, in turn, will keep driving the competitive landscape and market growth over the next three to four years.
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