We dive into how technology is helping the likes of Starbucks and Taco Bell build customer loyalty online and in restaurants.
This is part of our Future of Fast Food report. Download the full report.
In the future, brands will reward their most loyal customers with NFT-based collectibles and experiences to attract younger customers. They will also collect insightful first-party data through resales and trades of NFTs.
This is one of the key technologies that will shape the future of the fast food experience. Below, we dive into this technology: how it works, who has an edge, and how it’s changing the future of fast food.
WHAT ARE NFT LOYALTY PROGRAMS?
Non-fungible tokens, or NFTs, are a blockchain-based way to prove ownership of digital assets — which can range from images to songs to videos to clothes for avatars. NFT loyalty programs can be integrated into an existing digital loyalty program and can allow new ways for brands to interact with customers.
NFTs that provide customers with more use beyond the digital asset itself, such as access to exclusive events or physical products, are called utility NFTs. Utility NFTs help brands build communities with consumers post-purchase and better connect virtual and IRL experiences.
FIRST MOVERS
In Q3’22, Starbucks announced that it will be rolling out an NFT loyalty program called Starbucks Odyssey. The coffee giant, which generates over half its sales from rewards members, wants to use the program to build deeper emotional connections with customers by creating an immersive brand experience that rewards participants with NFTs.
While Starbucks is one of the first quick-service restaurants to embed NFTs into their loyalty program, other national chains have experimented with the medium. In early 2021, Taco Bell sold 5 NFTs to raise money for its charity The Taco Bell Foundation. Similarly, Domino’s used the attention garnered from its NFT sales to sell merchandise for its nonprofit — Domino’s Partners Foundation.
Source: Rarible
IMPLICATIONS
- As customers’ smartphones become increasingly crowded with apps dedicated to loyalty programs and a barrage of notifications, NFT loyalty programs give brands the opportunity to provide a differentiated value proposition by offering unique rewards and experiences, virtual or otherwise.
- Restaurants with customers that already value the brand’s digital assets (like Starbucks) will likely find more success with NFTs. Restaurants without this established digital presence need to consider how they can connect an NFT to substantive rewards, like award points or exclusive access, to make them meaningful for consumers.
- Restaurants can take advantage of the exclusivity and status that early adopters associate with NFTs. Because NFT owners derive value from the NFT’s scarcity, customers are more likely to display and share the branded token on a public platform like a social media account.
- Through NFTs, brands can also appeal to a younger demographic that is more likely to actively seek out and engage with these types of rewards. However, the size of the addressable audience could present a challenge as adoption among consumers remains low.
Read more in this report about how tech will shape the future of fast food, including:
- The metaverse, which will become an extension of the brand experience
- AI tongues and social listening to help brands quickly develop and test new menu items to meet changing consumer demands
- Conversational AI and AI recommendation engines will power online and in-store orders, allowing restaurants to upsell orders through personalized suggestions and prioritize labor for other customer service operations
- Robotic food preparation will automate cooking to increase profitability and reduce food waste
- Autonomous delivery will help reduce reliance on gig workers