If there is one thing lacking in the loyalty points market, it is that they are not easily tradable. If I go to another city and buy a bunch of clothes, I might get a coupon from the clothes company showing a $10 discount on my next visit. There is a very small chance that I will be visiting that store again, and loyalty toward retail outlets is fragile among customers, especially for common items such as groceries. If my $10 discount coupon were tradable, that would actually save me some money, for example, if another person walks into the store a few weeks later and buys similar clothing, they could see that I have a $10 discount coupon. They could buy that from me for, say $8, hence benefiting both of us.
Every store has a different loyalty points program, making most points liquid. For the retailer, he/she might have to find a balance between issuing tradable tokens to one time customers and non-tradable tokens to regular customers. My guess is that they wouldn’t mind issuing the tradable tokens since it would result in greater sales; this would be valid for large retailers, but probably not so much for the higher end brands and niche products. Tradability and fungibility of loyalty points could potentially increase sales numbers for many retailers.
How loyalty programs work in most FMCG goods. For mainstream use of WandX for the loyalty programs, two main points have to be taken care of:
we would need a large number of transactions that can be verified off-chain, or else there would be large gas costs for trading small quantities of points. We would need an easy way to “plug in” the loyalty points program for each application. For example, if we want to incentivize users to give ratings on a food ordering site, the site owners will create a loyalty points program on Wand with it’s own token, and every rating will be incentivized using the OrderToken. For this, users aren’t going to download a wallet or a browser extension. They will only care about getting the points and not care about whether blockchain is used or not. Hence, the transactions will have to be verified and settled off chain, and pushed to the network after bundling many such transactions. The blockchain accounts could be tied to user accounts and balances on the food ordering app; how this connection will be created, we will cover in our whitepaper. Using WandX, any digital asset could potentially be recorded, traded on the blockchain. Users could create products using loyalty points and any digital asset such as combining loyalty points of three brands which can be sold at a lower price, as well as trade in these products to see what would be beneficial for them.
Originally posted on the wandx blog. Check out Wandx marketplace here -
https://blog.wandx.co/
