Blockchain-Enabled Loyalty Points for Tokens as Digital Money
Aijaz A. Shaikh, Hamda Al Breiki, Sana Khan, Ravi Sharma, Nadia Dahmani · 2024
Blockchain-enabled platforms have been hailed as disruptive to existing digital business practices and have attracted significant attention from academia and industry. While blockchain technology has been extensively applied in numerous sectors, there is limited research on its optimization of customer loyalty programs (CLPs). Few studies have explored how blockchain technology can improve CLPs, despite its endorsement by contemporary research. Blockchain technology can potentially eliminate inefficiencies in traditional loyalty programs, enhance data security and transparency, reduce costs through smart contracts, offer personalized offerings, facilitate faster rewards redemption, and foster customer engagement. This chapter aims to address this gap by proposing a conceptual framework for the integration of blockchain technology in CLPs. By adopting FATE principles, merchants and customers are incentivized to participate. CLP operators can enhance their loyalty programs, create trust in their ties with customers, and drive customer loyalty. The proposed framework is analysed using UML artefacts to illustrate efficacy in two typical scenarios – purchase and redemption. The design of a proof-of-concept is discussed and the validation of an industry-scale meta or universal CLP is suggested.