Crypto & Web3.0
4 Ways Retailers Can Maximize Brand Success In The Digital Era
In a competitive retail landscape that is riddled with disruptive Direct-to-Consumer brands and legacy brands in their demise, maintaining a successful brand has proven to be a never-ending challenge. But one factor observed from long standing brands is that those who involve their customers in their brand-building and form a community with their fan base are able to win their loyalty and succeed in longevity.
Establishing a successful brand requires innovative approaches and adaption to the ever-evolving digital landscape, especially in the catalytic Web3 environment. By building a compelling brand identity, rewarding brand engagement, creating a sense of ownership, and nurturing customer loyalty, retail brands not only withstand headwinds and constant changes, but also build a loyal customer base that can drive growth and profitability.
Reinventing a Brand’s Identity
Shifting market trends, changing consumer preferences, and competitive forces – all these elements pressure retailers to constantly adapt and evolve, but staying relevant whilst maintaining consistency with one’s brand identity remains a challenge.
A few failing legacy brands have been successful in making a comeback after a decade of decline. Take Diesel for example, the once popular luxury denim brand filed for bankruptcy in 2019, yet revived itself after Gen Z kids began worshiping Y2K (year 2000) fashion and its bodycon fits on Tiktok. Most recently, the brand opened a grand flagship in Ginza, Tokyo’s vibrant shopping district, reflecting a refreshed image as it gears up to expand in growing markets across Singapore, Hong Kong, and Korea. During the pandemic, Diesel also began experimenting with its digital ventures, launching a virtual store dubbed ‘Hyperoom’ – a 360-degree virtual selling platform and exhibition space that had led the brand to transition into a tech-savvy brand it is recognized for today. Embracing art and culture as part of its heritage, Diesel has now also taken on the Web3 scene and launched several NFT initiatives, tapping into the new generation of consumers and thriving community of creatives.
As brands solidify their presence in the virtual realm and digital worlds, it becomes crucial to establish a distinct brand identity that reflects a tech-savvy personality, particularly in the context of Web3 culture – while still aligning with their core values.
Rewarding Brand Engagement
Upon discovering a brand, retailers need to capture and reward customer engagement to boost retention, drive purchases, and cultivate loyalty. While loyalty programs help form a relationship, rewarding consumers at the early stages of a consumer’s shopping journey and throughout is also vital. Korea’s Lotte Duty Free retailer launched a new initiative that invites users to participate in monthly challenges to engage with the brand and win rewards that can be exchanged for points on its online platform. Studies have revealed that gamification tactics can help increase content discovery and activity feed engagement by 68% as participation can help amplify the brand’s reach and visibility to new audiences.
A quarter of Gen Z consumers’ favorite entertainment pastime is playing video games, which has inspired many Play-to-Earn concepts such as motor game Stradall, which has formed partnerships with renowned brands like Alpine and McLaren to revolutionize loyalty and rewards. In Stradall, players collect iconic motorsports vehicles and assemble teams to compete against other players in the community and increase reward earnings. The game also features an open market where players can trade their assets or use a royalty system to passively earn from the game, stimulating a sense of investment and engagement among players.
Incentivizing customers to actively participate in brand-related activities can encourage ongoing interactions, boost customer retention, and drive purchases. Traditionally, this has involved offering loyalty points based on purchases or actions like following the brand’s social media pages. However, in today’s decentralized digital ecosystem, brands have the opportunity to create more authentic and meaningful connections with customers. Beyond a mobile game, consumers can establish lasting connections with brands and fellow fans in the community. This innovative approach can also be applied by retailers to gamify customer interactions, creating meaningful rewards and fostering a sense of community engagement on their platforms.
As consumers patron and affiliate with brands they identify themselves with, they also develop an emotional connection. Seen as a personal investment, this form of ownership is a representation of a consumer’s loyalty and affinity towards a brand. A recent study on psychological attachment to intangible objects has shown consumers to develop a sense of possession over virtual products and services, prompted by the ownership economy we commonly see today in Web3 culture.
Linking customer loyalty to a long-term project can allow for a brand’s identity to be passively connected to this related activity. Move-to-earn fitness app StepN for example, had partnered with Japanese sports brand Asics in launching a pair of Solana-inspired sneakers for their community. Earned through the players’ steps and tokens, players of the StepN app can redeem a pair of Asics sneaker digital collectibles.
Making the ownership of these objects relevant outside of the gameplay encourages players to invest in their progression of a game world through mechanics like real-estate purchases, training, and interaction with other players. A new and fast-developing mobile game House of Hamsters has players deeply invested in their own virtual hamster pet, leveling up the attributes of their furry companion through gameplay – much like the Travel Frog mobile game that swept through China, attracting a huge following of players. The success of these games is attributed to the creation of a satisfying gameplay loop, which can be replicated to bolster customer engagement. In-game rewards provide the consumer with true ownership of their achievements, which is where psychological ownership comes into effect. By investing in digital goods, users feel a deeper connection to the game and its rewards.
Many Web3 and crypto projects stimulates a sense of psychological ownership that leads to healthy user retention and sustainable ecosystems. This philosophy can equally be incorporated into the retail environment by making reward programs linked to digital collectibles that have a greater tangible use outside of just collecting points, such as access to exclusive brand collaborations or tradable rewards.
Cultivating Loyalty and Retention
In enhancing brand success, retailers often leverage loyalty and membership programs to encourage deeper customer engagement. However, loyalty programs are not as rewarding as they used to be, as stamp collections have become a passé and the younger generation is much more fickle with where they spend their money. Exclusive memberships on the other hand help maximize these benefits. The emergence of Web3 memberships have accelerated this trend as owning digital assets tied to the brand and interacting with other members in the community has helped form authentic interactions, thus deepening the relationship with the brand.
Asian beauty brands are at the forefront of utilizing NFT-based memberships to entice the new crowd of beauty consumers who are also tech enthusiasts. Hong Kong’s new Beauty World at TMT Plaza recently launched with over 40 local and international beauty brands. In doing so, it debuted Hong Kong’s first green NFT membership where customers can create their own personalized avatar and become founding members of its ‘Beauty Me Community’, with exclusive and sustainable membership privileges. As part of the company’s digital transformation strategy, Japanese beauty brand Shiseido with the help of Exclusible, has launched NFT tokens to its fan base, which carries $1,197 worth of skincare and samples throughout the year, event tickets, and other rewards. Offering digital tokens as a form of loyalty mechanism cements a sense of ownership and commitment to the brand, which in turn fosters brand advocacy.
This form of membership has transpired from the many communities assembled, particularly with Bored Ape Yacht Club NFT holders who have been leveraging their ownership into developing their own passion projects. Singapore entrepreneur and Bored Ape holder Jaye Foo opened the city’s first NFT bar and lounge for the tech community as a social hub, in addition to a craft beer line and the world’s first crypto-punk band. The brand received enthusiastic responses and has since expanded to opening two NFT galleries, including one in Seoul, South Korea. Using his Bored Ape collection has helped to leverage brand recognition and appeal to an already established group of crypto enthusiasts and other similar demographics. This direct incorporation of sub-cultural branding allowed Foo to tap into a pre-existing market that already has positive associations with the brand.
When consumers feel like they are part of a community, they are more likely to remain engaged and invested in the brand. Various engagement strategies as seen from the examples above help develop meaningful connections. Equally, retailers can also leverage emerging technologies like non-fungible tokens that offer personalized experiences and exclusive perks that can incentivize customers to engage with their brand on a deeper level. By cultivating a sense of community among their customers and rewarding loyalty in novel and innovative ways, brands can cultivate long-term customer retention and drive sustainable growth.