This wallet tactic could scale global on-chain brand ecosystems
Facing booming customer acquisition costs, brands will turn to blockchain for better data and growth opportunities
Vit-Mar/Shutterstock modified by Blockworks
Customer acquisition continues to become increasingly competitive, complex, and expensive for brands working to market their products successfully. The result? A global marketing arms race that has seen marketing budgets significantly grow in recent years, as evidenced by the following quick data highlights:
- According to the 2022 edition of Deloitte’s annual CMO survey, marketing budgets will comprise roughly 13.6% of a company’s total budget in 2023, up 3.9% from the two years prior.
- According to Future Market Insights Global and Consulting Pvt. Ltd., the global digital marketing analytics market stood at $4.2B in 2021 and is expected to reach $27.2B by 2031.
Despite increasing spending, there is still significant data left out of the customer acquisition equation due to technology limitations. How does Starbucks know if a consumer visited one of their Target locations because they were shopping for dog food instead of a new video game? How does a company like Nike know how often purchasers of its latest running shirt are actually wearing it to run?
Today, it’s impossible for brands to answer these questions—impossible, that is, until they apply blockchain technology.
Central to this evolution is a new single-wallet approach to crypto ecosystems. Poised to significantly improve crypto’s user experience, it has the potential to unlock a hidden world of superior consumer data and interconnected brand ecosystems that, while still under development, will forever change customer acquisition and how brands coexist.
On-chain data revolutionizes how brands attract consumers
Blockchain implementation will significantly ease the burdens of customer acquisition and bring on-chain data to the forefront of marketing efforts worldwide, enabling brands to far better cater to consumer needs. On-chain data is superior to traditional consumer data in many ways and holds the key to powering the future of customer acquisition. Here are some of its advantages:
- With on-chain data, businesses don’t need to pay for licenses or subscriptions to access data.
- As on-chain data is secure, companies don’t need to invest in expensive security solutions to protect their data.
- Because on-chain data is transparent, businesses can ensure it hasn’t been tampered with and don’t need to spend so much money on auditing and compliance costs.
To gain unprecedented access to previously impossible questions (like those in the previous section), brands can start by implementing blockchain into the consumer journey and take physical products on-chain. This can occur by leveraging emerging technologies like NFC chips linked to NFTs, which Nike has already done with their RTFKT WM Chip.
As products are increasingly taken on-chain, a collective of blockchain-integrated brands will form, laying the foundation for global ecosystems of interconnected brands to emerge. From there, brand loyalty rewards programs can be linked cheaper and faster than ever, novel experiences can be created around products, and consumer activity can be tracked like never before. These concepts become essential pillars of customer acquisition within the network, and as more companies join, the value proposition for incumbent companies to enhance consumer experiences increases exponentially.
The result? A network effect-powered blockchain that brands are highly incentivized to join and collaborate on.
When we consider how these blockchains could increasingly begin to take form over time, it’s essential to highlight the role that decentralization plays in the mix. While some crypto natives advocate for absolute decentralization, it can pose challenges for brands seeking to deliver personalized experiences to consumers. Particularly for luxury and service industries, designing and providing tailored experiences hold immense importance. Finding the right balance between decentralization is therefore essential to enable these industries to leverage blockchain technology.
The solution comes in the form of Web2-optimized blockchains like Aurora, where brands enjoy the dual benefits of enhanced flexibility and the ability to shape customers’ experiences, leveraging features such as:
- Control access to their own blockchains
- Dictate which apps and tokens are available to trade
- Control whether they, or consumers, are responsible for gas fees
Despite its advantages, blockchain has yet to be adopted on a global scale, and ecosystems of brands leveraging on-chain data to provide better value to consumers are nowhere to be found. This can be primarily attributed to the difficulties that brands and consumers have when onboarding to crypto, of which none have been more frequently cited in recent years than those that stem from crypto wallets. It’s no secret that they provide a steep learning curve and other sources of friction that typically bog down the onboarding process for brands and consumers alike.
A single-wallet approach is key to the development of brand ecosystems
Crypto-natives have become accustomed to managing various wallets across different blockchains and applications, embracing the inherently complex nature of crypto. However, the prevailing “multi-wallet approach” poses significant friction within apps, making it less suitable for the average user or Web2 brands seeking a smoother experience.
To put this into perspective, just imagine how frustrating it would be if gamers needed to have a separate account for every PlayStation game they play!
Adopting a single-wallet approach—like that of the Aurora Pass—is a strong path to alleviate the challenges of wallet tracking for individuals while simultaneously fostering the growth of the interconnected brand ecosystems that are still missing today.
In addition to the significant advantage of simplifying the onboarding process for users, the implementation of a single-wallet approach also simplifies blockchain implementation for brands. By consolidating digital assets within the same wallet, brands can easily leverage on-chain data and collaborate on joint activations with other brands. This opens up opportunities for the formation of expansive brand ecosystems, facilitating the growth and synergy among participating brands.
Imagine the possibilities that can arise when, for instance, a wine brand can identify a customer’s Starbucks loyalty NFT and extend them a special partnership discount. We’ll also see famous musicians become able to easily verify their top fans and send rewards on-chain, consumers gain the ability to sell and transfer loyalty rewards programs, and so much more. These advancements will not only significantly reduce customer acquisition costs, but also eliminate barriers to onboarding in the Web3 ecosystem.
Global brand ecosystems will rise
The widespread implementation of blockchain technology into customer acquisition will predictably generate several large distinct global ecosystems, each featuring a mix of brands that collaborate to acquire the attention, money, and loyalty of consumers.
It’ll be fascinating to see how ecosystems work together to compete against other ecosystems utilizing different blockchains, wallets, etc. For those integrating with chains that offer flexible customization options while utilizing a single-wallet approach, they could very well have a leg up on the competition.
In the end, what’s important about these future brand ecosystems is that the consumer wins. Everything from shopping and loyalty rewards programs to gaming will become much simpler in usability and better suited to provide value. With every brand on Earth able to benefit from this concept and millions of users at stake, the development of blockchain-powered brand ecosystems is a clear path to making the mass adoption of blockchain a reality.
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