Universal Reward Protocol is adding a new twist to performance-based marketing by using blockchain technology and infrastructure that rewards consumers no matter where or how they shop.
The infrastructure also shifts the power of controlling data from the marketer to the consumer. Here, Yves Benchimol, chief executive officer and cofounder of Universal Reward Protocol, discusses the technology infrastructure, how it works and why it’s important in today’s market.
WWD: How does URP work?
Yves Benchimol: Universal Reward Protocol is a blockchain-based infrastructure that lets retailers and brands reward shoppers for any type of shopping behavior, online and offline. With URP, a retailer or brand creates a campaign by choosing a specific shopping behavior they want to encourage, such as visiting a physical store, posting brand content on social media or purchasing a product and defining the appropriate amount of reward tokens each shopper who accomplishes this behavior will receive. This campaign is then published on the blockchain and is represented by a “smart contract.”
Then, once the shopper consents to its terms and conditions, a whole ecosystem of decentralized applications will collect and analyze his/her shopping behavior data, and notify the blockchain when they fulfill the campaign criteria, at which point the reward is automatically released and the data transferred to the retailer or brand.
In the redemption phase, based on the individual shopping data collected transparently through previous reward campaigns, the brand or retailer is able to produce personalized offers to the shopper, who can spend their previously earned tokens to gain access to these offers. As the token is universal, the shopper can also redeem their tokens with any other retailer and brand in the network, as well as sell them directly on an exchange as any other crypto-currency.
WWD: What are the benefits for retailers and brands?
Y.B.: Retailers lack tools to properly manage the huge amount of shopper data they collect on their existing customers, and at the same time they are also lacking in ways to know their prospects better. Their current toolbox is mainly composed of the below:
- Loyalty programs, which are costly to manage and only cover purchasing behavior, for the best existing customers
- The data brokerage industry, with opaque data collection and processing, and no direct interaction with the shopper
In URP, they can create a new rewarding campaign in just a few clicks, at a very low cost (since the system is global to all retailers/brands, the functioning costs are shared), and interact directly with their shoppers while transparently collecting data about them. For example, physical retail chains can increase traffic by rewarding a first store visit by a new customer, or brands can reward shoppers for posting content on social media.
What’s important is that this is performance-based marketing only: in our example, the retailer will only pay for actual new visitors, and has complete oversight over the performance of the campaign, with the power to terminate it early and get the unspent tokens back for another campaign. This is completely different from the current advertising framework where the performance of branding campaigns is notoriously difficult to measure.
WWD: This seems to shift the dynamic of controlling data to the consumer, correct? Why is this important?
Y.B.: Absolutely correct. We believe that privacy is becoming a central issue in consumers’ lives, as recent scandals and new regulations are bringing home the idea that it is important for each individual to be mindful of what personal data they share, with whom and to what end. It is particularly important when you consider the fact that data might well become the most valuable resource in the world in the next few years, and that currently consumers don’t control the flow of this resource, and don’t extract real value from it except access to free services.
At URP we believe that putting the consumer back in control is the way to go, and that blockchain technology is the best tool to achieve that. First, because in blockchain “code is law,” meaning that the logic written in a smart contract is always guaranteed to be applied, and is transparent for all to see. There is no way for a player on URP to go rogue and play a Cambridge Analytica on its users. Second, because consumer opt-ins and opt-outs for each individual campaign are published on-chain. Given the fact that blockchain is “immutable” (it’s impossible to delete or alter something that was written in the past), this means that consumers have a very strong guarantee that they can always see who collected what data about them, with the campaign conditions written in stone. This is also compliant with GDPR, and actually goes much further.
WWD: What are some of the expansion plans for the company?
Y.B.: Our objective for 2018 is to successfully conclude our token sale while developing the MVP of the protocol. Then a launch of the product is scheduled for Q2 2019, followed with a rapid international expansion. We think that there is an incredible opportunity to seize by solving both the retailers/brands’ problem of lack of personalized interaction and the shoppers’ need to take back control over their data.
Our ambition is to become the overarching infrastructure for all rewarding of shopping behaviors, allowing transparent and direct interactions between consumers and the brands they want to have a relationship with.