By Stephanie Trefcer
A recent Tokenization, Loyalty and Blockchain survey reveals that consumers across all age groups are increasingly willing to make purchases with tokens. While just one-third of consumers are highly familiar with contemporary, blockchain-based tokens, the majority of that group (63 percent) perceive tokens as a secure form of payment, and 55 percent believe tokens will enable them to make better use of loyalty reward points.
KPMG surveyed 1,000 Americans age 18+ to investigate the relationship between awareness of and willingness to use digital tokens, and to articulate the business opportunity to offer this new currency to customers. By leveraging blockchain infrastructure, digital tokens offer a new way to control and exchange ownership of an asset or something else of value.
What’s the business opportunity?
Tokens support transparent, immutable and frictionless transactions – unlocking new models for engagement between businesses and consumers, which includes increasing trust and brand loyalty. Companies that ignore the potential of tokenization to transform business models and competitive landscapes may soon be leap-frogged by bolder players who are harnessing tokenization to create competitive advantages.
“Tokenization is ushering in the next generation of commerce,” said Arun Ghosh, KPMG U.S. Blockchain leader. “It provides inspiring new ways to classify value, either by creating new assets or reimagining traditional ones, sustained with the security and transparency of blockchain. Businesses that take advantage of tokenization can open the door to entirely new process improvements, revenue streams, and customer engagement opportunities.”
Improving the overall customer experience
Loyalty programs are already being redefined by tokenization and present an entry point for businesses to introduce tokenization. According to the KPMG survey, 82 percent of consumers are willing to use tokens as part of an existing loyalty program, and 81 percent would trust the use of tokens more readily if they are already participating in a company’s loyalty program.
“By using tokenization, companies can develop new forms of value exchange within an existing network, such as allowing consumers to use loyalty points for purchases with different merchants,” continued Ghosh. “Not only can this create more engaging customer experiences, but it also offers significant operational efficiencies by accelerating the transfer of value.”
The potential is vast in those industries where consumers already express high levels of loyalty. For instance, when asked about loyalty to products/services across industries, consumers reported high levels of allegiance to banks and credit card companies (87 percent), restaurants/fast food/coffee shops (86 percent), electronics companies (81 percent) and media/telecom companies (79 percent).
KPMG found that brands in these industries, as well as others able to crack the code on developing token programs for use in a wide range of applications, will find a willing, eager, and accepting market.
For more information or to arrange an interview, please contact Stephanie Trefcer.
View the KPMG press release