Over the past few years, technological advancement and the ascent of social media has spiked C2C interactions and leveraged the consumers with more power to influence over brands. The emerging technologies like augmented reality and online communities is enabling consumers to be more informed about their purchase and making them more demanding for the privacy of their data and empowering them to make the brands act according to consumers’ will (Kim & Johnson, 2016; Morkunas et al., 2019). Lee and Pilkington (2017) are assuming that blockchain will create business activities more competitive through enabling consumers gaining more from their relationship with the brands which can come from the consumers’ participation in the blockchain-enabled brand loyalty programs and through increasing consumer’s control over their data (Boukis, 2019).
4.2.1 Consumer participation in blockchain-enabled brand loyalty programs The conventional purpose of initiating brand loyalty programs is to increase consumers’ share-of-wallet (Melnyk & Bijmolt, 2015; Odoom, 2016). The complexity and rigidity in the point redemption process, the disintegration of loyalty schemes and the abolition of strong rewards for loyalty, in the long run, are the causes of lessening the amount of customers’ motivation in the loyalty programs (Wendlandt & Schrader, 2007). Because of these complexities, customers do not even realise the value or benefits of loyalty programs provided by brands and does not resulted in improving loyalty which is the main focus for initiating loyalty programs for the customers (Kang & Hustvedt, 2014). Brands can attempt to reduce the customer churn rate and can enhance their participation in different schemes and programs provided by the brand through embracing modern technologies like blockchain (e.g., Lee et al., 2003; Bilgihan, 2016).
Blockchain technology is enabling brands to incorporate their digital currencies as a medium of better redemption of loyalty points and revamping customers’ experiences (Iansiti & Lakhani, 2017; Kowalewski, McLaughlin & Hill, 2017). For example, Singapore Airlines has inaugurated a blockchain-based Loyalty scheme partnered with national retailers where customer can redeem their loyalty points immediately from those partnered retailers through ‘Digital wallet’ (Boukis, 2019).
Blockchain-enabled loyalty programmes providing customers with the ability to avail cash loyalty points or exchange them in other industries which is significantly increasing the value of the loyalty points (Ksetri & Voas, 2019 via Boukis 2019). This variety of redemption option and the increasing value of loyalty points as a form of digital currencies will most likely motivate more consumers to participate in these types of loyalty programs backed by blockchain technology and buy more frequently from the retailer (Kowalewski et al., 2017; Casino et al., 2018). For example, Loyyal, a start-up company, offering blockchain-based loyalty incentives exchangeable across different markets. Furthermore, the transparency and visibility feature of blockchain technology will enable brands to offer more customised offer and the bundle of rewards and redemption option to the customers (Boukis, 2019).
Blockchain technology enables the brand to expand their partnership through brand alliances for promoting their digital currencies to attract and persuade consumers to redeem their earned points with any of the brands in the alliances which could affect customers’ experience with the brand (Lemon & Verhoeuf, 2016). And more user- generated content about the firm's product and services can be avail from these customer’s experiences and it will useful for new brands, new brand extensions and rapid brand recognition in a new or existing market (Boukis, 2019).
4.2.2 Consumers can gain better control of their data
Customer data is a very important element for any company or brands and companies always thrives for acquiring more and accurate and quality customer data to improve their products and services for capturing more customers and increasing market share. With the rise of acquiring customers data, maintaining, and preserving the privacy of the customer data becomes an issue of great concern and challenging task for the firms (Wu, Huang, Yen & Popova, 2012; Plangger & Watson, 2015). Protecting the privacy of the customer and their data is very important task otherwise the unauthorised access will create a feeling of identity theft among customers and eliminated customer’s trust over the brand (Martin, Borah & Palmatier, 2017). In this case, blockchain technology can be leveraged for ensuring the protection of personal data, diminish data vulnerability and allow the customer to gain more control over their data and manage it on their own preferences (Lee & Pilkington, 2017).
Lee (2017) postulated that blockchain could offer extra benefits to the consumer through the power of monetizing their personal data by providing access to the firms. This system provides a win-win situation for both marketer and the consumers as a marketer would not have to struggle for the authentic data and customer will be benefited by the compensation for their shared data. But the reliability of these data gathered directly from the consumers enables the marketers to design and formulate effective targeting strategy and build unique anonymized customer profiles. And to motivate consumers to participate in their data sharing, brands should first demonstrate the idea of how their data will be used and ensure the protection of their data (Lwin, Wirtz & Williams, 2007).
The involvement of the third party will diminish between the advertiser-consumer relationship because the consumer will be empowered to trade their data directly to the advertising agencies (Iansiti & Lakhani, 2017; Plant, 2017 via Boukis, 2019) and will offer brands to optimize advertising spend could ensure a better experience for their customers. However, the challenge to ensure the value of their data-sharing relationship to consumers and convincing them to get access to their personal data will remains there for the marketers (Boukis, 2019).