Bakkt’s plan to grow its digital asset network
Unused gift cards remain unoccupied in a drawer.
The 333 reward points a consumer has accumulated with a niche retailer likely won’t be redeemed, as this is a retailer that consumers rarely buy – and the points are not worth it. sufficient incentive to motivate a consumer to shop there more.
And then there are the thousands of airline miles and hotel points that have been frozen, largely unusable and of no value to the consumer.
Newly listed digital asset network Bakkt CEO Gavin Michel told Karen Webster that the digital age has brought with it a way to break the rigidity of loyalty programs – by leveraging the platform model to deliver rewards and cash to consumers wherever they shop.
Along the way, a connected economy of a different kind is forged, where brands that have affinities with each other can, according to Michael, come together to create.â¯multi-brand loyalty proposals.
Go public, establish partnerships
It’s been an intoxicating month of headlines for the company, which was founded in 2018 and goes public this month. The company’s platform allows consumers to take advantage of the Bakkt app to manage and spend assets ranging from cryptocurrencies to reward points, to gift cards in a brand ecosystem.
At a high level, consumers can convert digital assets into cash as they see fit (for example), send gift cards, crypto, or cash to other people, or redeem airline miles for money. ‘electronic.
In recent announcements, the company said it will partner with Finastra to enable cryptocurrency trading for community banks and credit unions. The company also said that through a partnership with Google, Bakkt users could add their Bakkt virtual debit card to Google Pay to complete transactions anywhere Google Pay is accepted. Digital assets like bitcoin would be converted into fiat currency to enable these payments.
Read also:â¯Bakkt / Google partnership enables widespread access to digital assets
Today, Michael said his ambition is to expand his network beyond the roughly 100,000 users seen at the start of the year to reach a target of 31 million by 2025 (as detailed in its presentation to investors) – and beyond. Michael said network effects materialize when consumers can âspend, send, buy and sell these assetsâ interchangeably.
For brands, the added value lies in the interchangeability and fluidity of rewards. Bakkt’s âwhite labelâ functionality enables brands and banks to build customer loyalty by allowing them to trade just about anywhere. This goes against the conventional siled approach where loyalty points were traditionally created and offered to trick an individual into redeeming them at (only) the issuing merchant. Fungibility gives birth to a connected ecosystem, said Michael.
âMany marketers are now looking to become relevant early in the shopping experience and help them expand their ‘funnels’ because growth is a primary focus,â Michael said. Getting consumers to use the programs Rewards more actively allows traders to reconnect with their rewards members.
Merchants can “bring their brand to life in the everyday lives of consumers and give them more time to recognize that their brand loyalty is working for them,” said Michael. In terms of numbers, the company said late last month that it had hit the milestone of one billion points and miles tied to its app by users since the company launched the app in March.
Read more:Crypto Marketplace Bakkt app users log in to 1 billion loyalty points, milesâ¯
PYMNTS researchconfirms the feeling that consumers want to use crypto to make transactions, as 18% of consumers say they would be likely to use crypto to make a purchase.
See more : How Consumers Want to Use Crypto to Buy and Pay in 2021 and Beyond
As shown in these digital pages in recent months, the company’s B2B2C model enables Bakkt’s platform to be made available on its partner platforms and channels. Winking at the Finastra deal, he said Bakkt is simply feeding transactions through connectivity through an application programming interface (API) and, as a platform, has “removed any concept of trademark conflict “.
The platform, he said, âallows us to present ourselves in so many different ways. We can present ourselves as a brand experience, down to a minimal brand experience. We want our partners to be successful. We are not trying to create a rival brand.
For traders, he said, there is the possibility for a trader to reconnect with the consumer. The merchant gets full attribution as to where the points go and gets more data about customers – and how those people interact with other brands as well.
Research, he said, shows that 70% of consumers believe that being able to convert points into cash or another digital asset is a “must.”
The verticals that pioneered the platform model and the fluid rewards programs, Michael said, include travel and entertainment brands looking to add value to their customer engagement.
âWe believe there are a number of adjacent industries where, when you think about gamification and encouraging the right behaviors and the right customers,â businesses are going beyond classic rewards and cash back, said Michael.
With the digital asset market, brands can become âcreative and contemporaryâ with rewards, he told Webster.