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 snug 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 typically, as stay-at-home orders disrupted typical routines. This state of affairs occurred all throughout the nation and all over the world. 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 workforce, and somebody who has seen how NFT initiatives can construct manufacturers and communities, I needed to discover how NFTs would possibly assist a neighborhood 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 a hit, the pilot served as proof-of-concept for a decentralized rewards protocol known as Loka, which is at present in growth.
In Could 2022, I started researching how NFT-backed rewards work to assist companies create loyal clients and probably improve income and model consciousness. I found that an NFT assortment could possibly be an ideal software for creating and managing buyer loyalty. In spite of everything, long-term rewards packages for espresso subscriptions have been tried and examined, and lots 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 clients with an NFT from a branded assortment in an try to extend loyalty. The hope is that by giving freely an NFT that entitles customers to a small reward, companies can entice them to go to extra typically 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, day by day at some stage in 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 might 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 current instruments to view, commerce, promote, and switch them. For instance, they might promote the NFT reward from their cell phones utilizing TofuNFT.com.
To assist inform pilot outcomes, individuals got a kind 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 information was collected and analyzed. Listed here are the outcomes:
NFT-based rewards helped improve visits and total income for Atlas Cafe. Pilot individuals visited the cafe extra often 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 median of $5 per go to. After receiving the reward, he visited a complete of 5 occasions over the 10-day pilot interval, spending about $28 in complete. One other participant, who famous comparable 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 go for supporting native companies,” stated pilot participant Doug Qian. “Within the 10-day pilot, I ended by Atlas nearly day by day to select up a espresso, and it grew to become a reasonably vital a part of my morning routine. Would gladly pay for a go like this sooner or later.”
Atlas Cafe elevated its model consciousness by 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 flexibility to carry an on-chain, Atlas Cafe NFT of their pockets, and started telling others concerning 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 complete 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 in a position to 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 authentic pockets to a different. For the reason that reward was represented as NFT, he was in a position to 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 in a position to be part of the rewards pilot for a minimal price.
“The pilot was of unbelievable assist in understanding a buyer phase we have now needed to know,” says Felipe Collin, proprietor of Atlas Cafe. “After COVID, each enterprise worldwide began in search of methods to have interaction and supply further worth to their clients. Because the pilot began, we noticed a social ingredient rising in parallel — individuals coordinating to seize a espresso as a gaggle. NFT loyalty packages are a good way to have interaction along with your clients and construct a group.”
Whereas Atlas Cafe benefited from the NFT-backed rewards program pilot, performance should be added to create a completely developed protocol for enterprise use:
- Automate reward redemption and combine knowledge assortment. Like several cafe, sure occasions of the day at Atlas are busier than others. For that and different causes, Atlas Cafe workers typically did not ask clients to finish the shape after every transaction. Whereas this restricted the quantity of dependable knowledge we collected on the register, we had been in a position to 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.
- Develop 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 energetic in lower than eight of them. Using NFTs in a loyalty program can enable customers to remain extra engaged with the model, as we noticed with this pilot.
- Develop further on-chain NFT use circumstances. Use circumstances for NFT holders may embrace 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 shopper 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 earnings. As soon as developed, the decentralized rewards protocol Loka may assist even the smallest enterprise combine and innovate with web3 applied sciences.
To be taught extra about Celo and its mission to create a future the place individuals in all places can thrive from monetary inclusion, a wholesome surroundings, and connectivity by progressive applied sciences, go to Celo.org.