Web3 Can Boost Brand Loyalty Programs – Polygon Research

Web3-Based Loyalty Programs

Web3 integration by brands is increasingly gaining traction as its use cases expand across industries. Researchers from Polygon Labs, the parent company of the Layer-2 protocol, Polygon explained how brands could adopt Web3 data to create products, services, and marketing strategies targeted at their consumers.

With the introduction of Web3 technology, marketers can utilize a revolutionary way to boost their loyalty programs. In a joint paper called “The Future of Loyalty Programs with Web3,” Accenture, Polygon, and Google Cloud outline how incorporating blockchain and other Web3 technologies can make such programs more user-focused, scalable, and economical.

A Shift Toward Experience-Driven Economies

Consumers are increasingly placing a higher value on unusual and interesting experiences than the conventional loyalty benefits. For businesses, this change—often referred to as the experience-driven economy—presents possibilities and challenges.

According to the research, firms need to be flexible and adaptable in customizing their products to cultivate consumer loyalty and suit their evolving needs. Businesses can increase engagement and loyalty by optimizing the user journey through Web3 technology.

Businesses that have previously used Web3-based loyalty programs point to its multiple advantages. These advantages include enhanced data insights, fresh avenues for interaction, and additional sources of income.

Blockchain and Brand Loyalty

Blockchain technology provides many benefits that can make loyalty programs more effective. Since public blockchains are decentralized and provide tamper-proof data storage, their built-in security protects against fraud and unauthorized access.

This openness increases consumer trust, as every transaction on the blockchain is verifiable and irrevocable. Another important advantage is interoperability, which facilitates flexibility between many reward programs, leading to a seamless user experience.

The experts also pointed out that on-chain data (such as token holdings, non-fungible token (NFT) purchases, and decentralized finance (DeFi) activities) can give businesses more detailed insights into the behavior of their target audience. Thus, they can improve the efficacy of their loyalty programs. They added that these data can also be used to find high-value NFT collectors, active yield farmers, and users who are interested in particular Web3 communities.

NFTs Trends and Future Prospects

Meanwhile, experts believe that the NFT market still has enough room for growth despite the broader downturn in Q2 2024. According to data from CryptoSlam, the volume of digital collectibles sold declined by 45% in Q1 2024 compared to the previous quarter.

Mohsin Waqar, CEO of Web3 gaming platform Senet, remarked that NFTs could experience a comeback as more sectors come up with creative methods to use this technology. However, he stressed that maintaining and reviving interest in NFTs would depend heavily on user-friendly applications.

The CEO of Sui-backed visual interaction platform RECRD, Anoir Houmou, agreed, adding that NFTs are already seeing healthy adoption rates, especially in gaming. Co-founder of NFT marketplace SuperRare Jonathan Perkins compares the current situation of NFTs to the early internet days. According to him, NFTs would become so ingrained in daily life—much like the internet—that using them will become second nature.