Stablecoin issuer Circle announced on Tuesday that it has signed a memorandum of understanding (MOU) with HKT, a leading technology, media and telecommunications company.
The main objective of this collaboration is to explore opportunities to create a blockchain-based loyalty solution tailored for Hong Kong’s shopping streets.
Collaboration between Circle and HKT
According to the blog post, by combining Circle’s expertise in Web3 services and HKT’s merchant network and customer engagement resources, the two companies will develop loyalty solutions powered by Web3 to improve consumer-merchant interactions. The company says it has the potential to improve content and create a more interactive and engaging experience.
Circle co-founder and CEO Jeremy Allaire said in an official statement:
“We are excited to work with HKT to bring our Web3 services to the forefront of customer loyalty innovation. It’s a testament to our commitment to creating experiences, redefining loyalty programs, and helping our merchants have the tools they need to succeed in the digital economy.”
Big-name companies like American Express and Marriott are seeing impressive engagement and revenue per customer, thanks in part to the strength of their loyalty services. This type of program is also popular with Gen Z and Millennials in Hong Kong. However, expectations around consumers have changed over time.
Circle cited a Statista report stating that the global loyalty market is valued at approximately $5.57 billion and that 70% of consumers say loyalty programs play an important role in their purchasing decisions.
Recognizing the benefits of on-chain loyalty programs over traditional methods, the cryptocurrency company launched a “smart contract platform” in March this year to create integrated on-chain loyalty options within applications and We’ve made earning and redeeming rewards a smooth process for players.
Benefits of blockchain in loyalty
A recent report from Deloitte highlighted that traditional loyalty and rewards programs are not reaching their full potential due to several key challenges. These include account inactivity and low redemption rates, which hinder program effectiveness and customer engagement.
Additionally, reward processing time delays and high transaction costs contribute to inefficiencies, further exacerbating system management and customer acquisition issues. The report also points to low customer retention rates as a significant concern, suggesting that these programs struggle to maintain ongoing customer loyalty and engagement.
The company believes that blockchain can eliminate many inefficiencies.
“So we know what’s behind this lack of execution efficiency: Fragmented and unwieldy systems that rely on centralized management, coupled with the need for trusted intermediaries to move processes along the value chain. Ironically, blockchain answers this problem by removing trust from the process and decentralizing it. ”
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