Non-Fungible Tokens in Loyalty Programs: A Dress Rehearsal for Tokenized Payments?

Loyalty programs are a staple of companies’ attempts to connect with their customers, but only about half of them receive consumer engagement. A rising movement toward the use of non-fungible tokens—NFTs—as exclusive offerings and as a new payment experience could provide another avenue for engaging customers. This Javelin Strategy & Research report takes a look at what’s happening in the space.

Brands such as Nike and Adidas are inviting customers to accumulate exclusive digital content, whether to hold it, sell it, or redeem it, using blockchain technology. Others, such as Starbucks, are avoiding the language of digital assets but giving customers access to special offers and experiences. In sum, these forays follow the path of building loyalty by changing the payment experience.

Key questions discussed in this report:

• How are loyalty reward programs finding use cases for non-fungible tokens (NFTs)? 
• What is important to focus on during a chaotic and experimental period for NFTs? 
• How should I evaluate the payment potential of NFT reward opportunities? 
   

Companies Mentioned:

Adidas, Adidas Genesis Collection, Adidas Virtual Gear, Apple Pay, Binance, Bored Apes, Coinbase, Ethereum, FTX, Into the Metaverse, KPMG, Mutant Apes, NFTs, Nifty Gateway, Nike, Nike Virtual Creations, Omnibus, OpeanSea, OurForce1, Paypal, Pixel Vault, Polygon, Starbucks, Starbucks Odyssey, Tokens/blockchains,