Block Chain Poised to Revolutionize Brands’ Connections with Customers
What: Block chain technology offers brands the opportunity to collect customer data and incentivize their behavior directly and transparently.
Why it matters: Customers can protect their personal data and monetize it, entering into a one-on-one relationship with brands through a technology called "smart contracts". Smart contracts allow users to enter into data sharing agreements with brands that are “securely stored on the block chain along with the detailed terms and conditions.”
Block chain technology is poised to revolutionize how brands gather customers’ data and incentivize their behavior. The digital computer code that is best known for being used to create the crypto-currency known as “Bitcoin,” also allows for “smart contracts,” whereby two entities (i.e. a brand and a customer) can enter into agreements that are transparent, verifiable, secure and direct.
So what do “smart contracts” mean for brands?
Smart contracts backed by block chain technology have the potential to shatter the traditional paradigm whereby brands purchase customer data from third parties like Facebook, or loyalty programs that rely on consumer subscriptions but don’t provide a lot of purchasing behavior or product preferences information.
Enter Killi, a consumer application available on iOS or Android. Killi lets consumers sell their personal data directly to brands and receive compensation every time marketers choose to buy it.
Using block chain technology, Killi collects users’ locations and their purchasing data which is stored on the user’s device. Brands can then purchase the data with the permission of the app users.
A personal data locker is controlled by the user and secured by the block chain. This allows you to take back control of your personal data from those who are selling it today without your consent.
When users authorize brands to access their data, Killi stores the payment on the Killi app until users choose to redeem it.
“Killi acts as a personal data locker that is controlled by the user and secured by the block chain. Killi allows you to take back control of your personal data from those who are selling it today without your consent,” Killi tells consumers on its website.
The Killi website is a bit vague on how the technology actually works, but “the offering of being able to monetize your own personal info does sound intriguing,” said Jay Gumbiner, vice president for Latin America at IDC.
“We could even imagine some consumers being worth much more than others based on their purchasing habits, socioeconomic placement, educational level, etc.”
We could even imagine some consumers being worth much more than others based on their purchasing habits, socioeconomic placement, educational level, etc.
“In terms of using block chain for maintaining the integrity of that data and being able to easily track who has been able to access the information, it seems like blockchain could be a great use case for managing data such as this,” Gumbiner noted.
The Killi app relies on block chain technology to create what is known as a “smart contract” between the app users and brands.
Smart contracts allow users to enter into data sharing agreements with brands that are “securely stored on the block chain along with the detailed terms and conditions,” according to Yves Benchimol, CEO at the French startup Occi.
Thanks to these smart contracts and encryption via the block chain, consumers can “easily request an exhaustive list of all retailers/brands they have shared data with, and in which conditions, in compliance with GDPR,” Benchimol said.
Occi is working on its own products for retailers that use block chain and smart contract technology to reward customers while providing a rich set of data about their shopping behavior to brands.
Smart contracts with consumers provide a channel for consumers to share their information with brands, while providing brands new possibilities for influencing consumers’ behavior.
Brands can “create a campaign rewarding a shopper for visiting a store and define the amount they’re willing to reward a shopper along with a total budget, which will be locked in a smart contract,” Benchimol said.
Retailers have access to well-established sources of data on consumers' preferences and behaviors from a wide range of sources, but new laws such as GDPR create barriers to using that data without consent.
Block chain and smart contract technology “bring forth a new way to solicit data sharing from shoppers, that is more transparent and fair because it directly rewards them,” Benchimol said.