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A Look at How Major Brands Are Maximizing Consumer Engagement via Tokenization

source-logo  thenewscrypto.com 29 January 2024 12:47, UTC

The last couple of years have seen a number of radical developments take place within the realm of digital finance and investment, with one of the most prominent ones being the concept of ‘tokenization.’ In essence, tokenization entails the conversion of any asset class — be it virtual or physical — into digital tokens, which can then be stored and traded on the blockchain.

To highlight the growth witnessed by this sector in recent months, as of Q3 2023, the total value of tokenized assets across all sectors stood at $2.75 billion, with several conservative studies estimating this figure to climb to $12.68 billion by 2030, growing at a CAGR of approximately 19.3%​​. Not only that, as per several asset management firms and major consultancy giants — such as ‘21.co’ — this figure could scale to anywhere between $3.5 trillion and $10 billion by the end of the decade, citing the ongoing convergence between crypto and traditional assets as a reason for the same.

Lastly, over the past year, a growing list of prominent financial institutions such as BNY Mellon, JP Morgan, and BlackRock have acknowledged that they are either actively developing their very own tokenization platforms or have become aware of the benefits offered by these assets, particularly in terms of streamlining payment and settlement processes.

Revamping customer interactions using Web3 tech

A recent study conducted by professional services firm KPMG has shown that companies that choose to integrate a ‘tokenization framework’ into their loyalty programs stand to experience significant enhancements in their customer engagement levels. Moreover, the researchers noted that the introduction of such blockchain-centric programs can help acquaint users with the basics of cryptocurrencies and digital assets.

Lastly, the study states that as things stand, 82% of consumers worldwide are ‘highly willing and open’ to using tokenized assets as part of their currently enrolled programs, with this enthusiasm stemming from the fact that the avenue allows brands to create more interactive and rewarding experiences — allowing users to accrue tokens for every small purchase or engagement action, which can then be redeemed for rewards or experiences.

One company that has made a mark within this space, differentiating itself from the rest of the fray, is Tidepay. The project allows businesses to create a tokenization-rooted, white-label rewards platform offeringa wide range of benefits such as discounts, event access, and other exclusive opportunities to their customers.

By going beyond traditional marketing methods and embracing the concept of tokenization, Tidepay opens up new avenues for engagement beyond conventional social media approaches — affording businesses the opportunity to devise customized rewards apps that carry their branding while being deployable across a wide array of industries.

Most recently, Tidepay collaborated with ATH Vodka, a premium alcohol brand, to launch a crypto-powered rewards app that allows users to unlock access to exclusive music events such as the Sony Music-backed Strawberries and Cream festival, exclusive supercar trips (in conjunction with Cannon Run), weekend getaways, and even yacht hires.

The future of tokenization

From the outside looking in, the numbers seem to clearly suggest that the realm of tokenization is poised to grow immensely over the coming few years, something that can subsequently have a transformative impact on global engagement levels between brands and their clients.

Tokenization market size by 2030 (source: 21.co)

As highlighted in the earlier sections, by integrating blockchain tech into their existing frameworks, companies can offer highly personalized loyalty programs and unique experiences tailored to individual consumer behaviors and preferences. Moreover, the gamification aspect of digital tokens can add yet another layer of interactiveness and engagement into the mix. Thus, it will be interesting to see how the future of this burgeoning industry continues to evolve!

thenewscrypto.com