Have you heard the term branded currency?

If you haven’t heard it yet, chances are that you are going to very soon and you are going to hear a lot about it!

There is a lot of buzz in the Gifts, Benefits, Rewards and Loyalty (GBRL) space about branded currency these days. What is branded currency? Simply put, it is a medium of exchange for goods and services with a brand. Is it like cash? No. However, it is a store of value in the form of gift cards and loyalty programs. It began in the plastic form as a regular gift card but has now gone beyond just the physical form of a gift card. If can be in the form of a digital gift card, coupons, loyalty points, store credit or vouchers issued by brands to their customers or even a cash back wallet.

Now imagine a scenario where you can use this digital mode of branded currency not just with the brand that doled it out in the first place but with a slew of brands, across industries and for different products and services! That is common currency for you.

When a consumer becomes a loyalist of a particular brand and/or retailer, he/she starts expecting some additional benefits and rewards in return for the loyalty, in other words more value for spend. Brands and merchants in turn come up with different lucrative schemes to increase their engagement with consumers. Apart from the additional sweeteners, these days consumers also want more flexibility and freedom of choice. For example, if they have points and gift cards accumulated from different merchants, rather than spending them individually with each of the issuers, consumers would like to accumulate the points and use it to, let us say, book a room while on a foreign holiday. It could also be that each of these points is insufficient to redeem something of actual value if availed individually with the issuer. What if merchants agree to issue and redeem a common loyalty currency so that the consumer can transact using this common currency or flexible currency across a large pool of merchants and outlets? It is almost like saying that everywhere a consumer shops, he is given a common currency in return for his loyalty and spend, which can then be redeemed anywhere he wants.

How are they different from the coalition programs – programs where a few merchants get together and spread out the benefits that they can offer their consumers?

Coalition programs have always existed. However, most coalition programs are often just a few merchants getting together to offer joint services. This means that there could be multiple coalition programs running simultaneously. Merchants also find that the personalized touch that they have had with their consumers as well as the well-defined and differentiated offering they make in their individual loyalty programs is lost in a coalition program.

The common currency which brings in all merchants, retailers and outlets together is then possibly a combination of the best of both worlds. So, while there is a common currency that is being advocated, merchants and retailers still maintain their individualism yet manage to offer more value in terms of flexibility and choice to their loyal consumers – more customer delight and better engagement! Yes, that and a lot more too. Here is a list of some of the advantages:

The consumer collects the same form of loyalty currency irrespective of where he/she shops

The consumer can redeem the points anywhere in the world at any outlet he/she chooses to

Merchants or the owners of the loyalty currency could exchange the currency with other merchants, enabling their consumers to also exchange their currency and redeem it for something of real value or interest

Consumers are also motivated to earn more of this currency as they know that they can redeem it anywhere and anytime for something of real value

As a result, there is better liquidity generated in the GBRL industry, meaning that there are a greater number of loyalty points actually getting redeemed and used. With the merchants now reaching out to consumers with a way to give them experiences that correspond to their needs, every point that is being given out now has more value in the eyes of the consumer.

This way, for all the accumulated points that the consumer spends, the merchant earns not just a return on the investment that he has made, it also translates into more loyalty and continuous and sustained engagement.

For merchants, now that they have a common currency between them, it is also a key to enter the world of better consumer data and insights. Having a common pool helps them to gather better data insights into the consumer, which can then be channelized into making their products/services more customer-centric, meaning, to offer the consumers what they really want. Moulding their products/services to suit specific customer’s needs using these insights could also be their ticket to gain an edge over their competition, even while still being tied together with a common currency to enable better liquidity. It also helps them to withstand the fierce competition from online retail giants such as Amazon, who compete based on their data insights and technical prowess.

Now, into this world of collaboration, bring in the power of tech. This is the generation of the millennials, who want all their conveniences on an app. According to a recent global study, 69% of people have said that they are more likely to use a loyalty card if it is on their mobile. As far as the best apps in the GBRL space go, the mobile app offered by Starbucks is said to be the best in the GBRL space and there are several more examples of state-of-the-art mobile apps that are being enabled for loyal consumers. Apple Wallet provides an innovative platform by bringing in all the loyalty currency, merchants and retailers onto one place, helping consumers access all their currency at the click of a button 3. Closer to home, Future Group too has an innovative app linking all its brands in one place, though they have yet to offer redemption across brands.

Despite having a common currency to access, if consumers do not have one single wallet for all the points where they do not need to keep track of the terms & conditions of different programs and can instantaneously redeem or exchange their points, then the power of the common currency does not truly percolate down.

Creating a uniform management system that integrates different programs onto one interconnected loyalty network accessible on a mobile, a system that negates the need for third parties to create, redeem and exchange loyalty and helps merchants directly interact with consumers in a secure channel is the need of the hour.

Global solution providers such as ZAGG Protocol enable multiple such applications. By providing a versatile blockchain infrastructure which can be used for any Business to Business to Consumer (B2B2C) business, the multi-tier engagement program running on top of ZAGG Protocol can bring all merchants and retailers onto one space, allowing the consumers to leverage the power of the common currency with a click of a button. Using the decentralized blockchain technology, ZAGG Protocol also ensures that the transactions are written on blocks, which makes them secure and verifiable. With its unique architecture enabling public-private transactions on the same public blockchain, ZAGG Protocol’s proposition is lucrative for any enterprise running consumer businesses.

There is no question now that with the GBRL space constantly evolving, the mobile wallet is becoming a sort of a strategic weapon for the merchants. The evolution, however, is an ongoing one. On one side there are chatbots that are making their presence felt in the space and on the other, disruptive technologies are bringing in the power of geo-location, where information of new deals and rewards is being pushed to the consumers based on the insights that the mobile app gives the merchants.

As technology, issuers and consumers strive to keep pace with each other, one cannot negate the fact that this effort to stay on top of things is a sure sign to show that the GBRL space is gaining more leverage amongst consumers.