By Evan Fenster, Celo Basis
Atlas Cafe coffeehouse in San Francisco’s Mission district has been a mainstay within the neighborhood since 1996, offering a cushty place for the area people to eat, drink, socialize, and work. Sadly, the pandemic hit Atlas Cafe laborious — its ‘regulars’ got here loads much less usually, as stay-at-home orders disrupted typical routines. This situation occurred all throughout the nation and around the globe. Whereas most companies have reopened, some have struggled to rebuild their common clientele. Atlas Cafe was no exception.
As an Atlas buyer over the summer season, a UPenn pupil working as a summer season intern on the Celo Basis’s Analysis and Innovation staff, and somebody who has seen how NFT tasks can construct manufacturers and communities, I needed to discover how NFTs may assist an area enterprise. This exploration led to an NFT-backed rewards pilot program that simulated how a neighborhood espresso store may market, onboard, handle, and implement an NFT assortment used for rewards.
To run the pilot, I acquired funding from the Celo Basis and assist from my Analysis and Innovation teammates. Finally successful, the pilot served as proof-of-concept for a decentralized rewards protocol known as Loka, which is at present in improvement.
In Might 2022, I started researching how NFT-backed rewards work to assist companies create loyal prospects and probably improve income and model consciousness. I found that an NFT assortment may very well be an amazing software for creating and managing buyer loyalty. In spite of everything, long-term rewards packages for espresso subscriptions have been tried and examined, and plenty of manufacturers have already used NFTs to efficiently faucet into desired buyer conduct. However, in my analysis, I couldn’t discover any examples that mixed these two methods.
The use-case design is pretty easy: A enterprise rewards prospects with an NFT from a branded assortment in an try to extend loyalty. The hope is that by gifting away an NFT that entitles shoppers to a small reward, companies can entice them to go to extra usually and spend sufficient to make up for the price of the reward, growing total revenue.
The Atlas Cafe NFT assortment was deployed to the Celo blockchain and featured the Atlas mascot, designed by Atlas Cafe and Celo Basis. Every NFT is collectible, tradable, and transferable, and entitled the holders to redeem a free espresso, valued at $4.50, each day during the 10-day pilot.
On July 25, 2022, I launched the 10-day Atlas Cafe pilot with 20 individuals I met on the cafe and requested to affix. I despatched every participant an NFT on to the pockets addresses they designated prior. All through the pilot interval, they may redeem their free Atlas espresso as soon as a day by displaying their NFT to baristas. For the reason that NFTs exist on the Celo blockchain, individuals may additionally use present instruments to view, commerce, promote, and switch them. For instance, they may promote the NFT reward from their cellphones utilizing TofuNFT.com.
To assist inform pilot outcomes, individuals got a type with their espresso, and requested to checklist different purchases, if any, and the price of these purchases. These purchases had been made with fiat currencies.
When the 10-day pilot ended, the info was collected and analyzed. Listed below are the outcomes:
NFT-based rewards helped improve visits and total income for Atlas Cafe. Pilot individuals visited the cafe extra regularly and bought further objects when there. Earlier than the NFT-based reward, one participant visited Atlas Cafe about as soon as a month, spending a mean of $5 per go to. After receiving the reward, he visited a complete of 5 instances over the 10-day pilot interval, spending about $28 in whole. One other participant, who famous related pre-pilot spending, visited 3 times over the 10-day pilot interval, spending a complete of $24.
“I used to be a super-huge fan of the idea and thought of an NFT membership cross for supporting native companies,” stated pilot participant Doug Qian. “Within the 10-day pilot, I ended by Atlas virtually each day to choose up a espresso, and it turned a reasonably important a part of my morning routine. Would gladly pay for a cross like this sooner or later.”
Atlas Cafe elevated its model consciousness via on-chain earned advertising and phrase of mouth. Atlas Cafe’s model consciousness grew as pilot individuals unfold the phrase about their experiences. They had been enamored with the power to carry an on-chain, Atlas Cafe NFT of their pockets, and started telling others in regards to the pilot. This word-of-mouth advertising resulted in seven further individuals becoming a member of the pilot within the first few days.
The NFT assortment created international attain for the native cafe. 4 of the 27 whole individuals joined the pilot from Uganda, Africa. Although unable to obtain the free espresso, they joined to have interaction with the Celo and Atlas Cafe communities. By creating this assortment, Atlas Cafe was capable of receive a world attain with minimal advertising spend.
On-chain instruments supplied different use-case alternatives. One participant needed to switch the reward from his unique pockets to a different. For the reason that reward was represented as NFT, he was capable of seamlessly accomplish that. One other participant, who was out of city in the course of the 10-day pilot interval, listed his NFT on the market on an open market, making a $7 revenue. The brand new proprietor was then capable of be part of the rewards pilot for a minimal price.
“The pilot was of unbelievable assist in understanding a buyer phase we’ve needed to know,” says Felipe Collin, proprietor of Atlas Cafe. “After COVID, each enterprise worldwide began searching for methods to have interaction and supply further worth to their prospects. Because the pilot began, we noticed a social factor rising in parallel — individuals coordinating to seize a espresso as a bunch. NFT loyalty packages are a good way to have interaction along with your prospects and construct a neighborhood.”
Whereas Atlas Cafe benefited from the NFT-backed rewards program pilot, performance have to be added to create a completely developed protocol for enterprise use:
- Automate reward redemption and combine knowledge assortment. Like several cafe, sure instances of the day at Atlas are busier than others. For that and different causes, Atlas Cafe employees usually didn’t ask prospects to finish the shape after every transaction. Whereas this restricted the quantity of dependable knowledge we collected on the register, we had been capable of complement the self-reports with on-chain knowledge, interviews, and surveys. To keep away from interruptions within the check-out course of sooner or later, automating reward redemption and knowledge assortment will assist assure a smoother check-out expertise, no matter the kind of enterprise.
- Increase this mannequin to different companies (e.g., bigger eating places, native grocery shops) to extend engagement in vertical markets. Statistica survey knowledge launched in June 2022 suggests that buyers, on common, take part in over 16 loyalty packages, but are lively in lower than eight of them. Using NFTs in a loyalty program can enable shoppers to remain extra engaged with the model, as we noticed with this pilot.
- Develop further on-chain NFT use instances. Use instances for NFT holders may embody on-chain voting. For instance, Atlas Cafe may current an on-chain proposal to introduce a brand new drink, which solely their NFT holders may vote on. The on-chain voting course of would supply utility for the NFT holders whereas additionally leading to helpful client knowledge for Atlas. Moreover, manufacturers may host networking and different occasions just for NFT holders.
Small companies like Atlas Cafe can seamlessly generate NFT-backed rewards that may assist enhance buyer retention charges whereas growing income. As soon as developed, the decentralized rewards protocol Loka may assist even the smallest enterprise combine and innovate with web3 applied sciences.
To study extra about Celo and its mission to create a future the place individuals in every single place can thrive from monetary inclusion, a wholesome atmosphere, and connectivity via modern applied sciences, go to Celo.org.
