Exploring the implications of blockchain technology for brand–consumer relationships: a future research agenda

Abstract

Purpose The purpose of this conceptual paper is to delve into the implications of blockchain technology adoption for brands and consumers. Drawing on the existing branding literature and real-life applications of blockchain, the challenges, risks and opportunities from blockchain adoption for four important areas of the branding literature are canvassed (i.e. brand positioning and corporate brand image, consumer–brand relationships, online brand communication and consumers’ trust in the brand). Also, a future-oriented discussion is provided that highlights some important avenues for researchers in the field. Design/methodology/approach This conceptual paper sheds light on the potential implications of blockchain technology for brand–consumer relationships. To do so, an analytical review of the blockchain literature is conducted, the nature of blockchain technology is presented and its unique features and functions for brand–consumer interactions are discussed. Findings This paper ignites an exploratory discussion around how blockchain applications and platforms can affect consumer–brand relationships, drawing on a number of real-life examples of blockchain adoption. This discussion sheds light on how blockchain features can impact on various areas of interest for strategic brand management, such as the adoption of digital currencies, brand storytelling, use of blockchain-enabled loyalty programmes, role of intermediaries in online advertising, counterfeit consumption, brand transparency and trust for brands in online marketplaces, amongst others. Originality/value This is one of the first conceptual efforts in the branding literature that draws on the scarce existing knowledge around blockchain adoption and discusses the potential implications of blockchain technology for brands and consumers whilst also providing directions for future research.

Procedia of Economics and Business Administration

“…Trust between consumers and the brand is an important factor that affects positively brand loyalty [Laroche et al, 2012]. Innovativeness is also an important way to build brand loyalty [Pappou and Quester, 2016] An important instrument to improve brand loyalty by creating stronger economic and habitual relationships is loyalty programs [Epstein 2018;Boukis, 2019]. These programs are used in a wide range of industries, especially in retail, airlines, tourism, e-commerce and finance, as the most important and widespread marketing tool for firms and brands seeking for building customer loyalty and relationship management [Agrawal et al, 2018;Choi, 2018;Boukis 2019].…”

“…Brand Loyalty Programs can be classified in six main categories, namely punch cards, points collection cards, tiered, fee-based, cash back, non-monetary rewards, and coalition loyalty programs [Agrawal et al, 2018] Despite the popularity of these programs, there is growing evidence that consumers are becoming increasingly disappointed with the reward they receive compared to the effort they have to make in order to earn loyalty points [Bruneau et al, 2016;Epstein, 2018]. Moreover those schemes are difficult to be implemented by smaller companies, creating barriers to entry in new markets [Gupta, 2017], and rising the switching costs for consumers to other brands or retailers that may offer better value [Epstein, 2018], as in traditional loyalty points programs, customers are usually limited on where and when they can spend the points, which undermines customer intentions of accruing or using the points Therefore despite the benefits for both the companies and brands but also for the consumers, existing brand loyalty programs have some disadvantages as they are reported by various researchers and practitioners [Danaher et al, 2016;Bruneau et al, 2017;Agrawal, et al, 2018;Epstein, 2018;Boukis, 2019] as summarized in the following list:…”

“…Another important issue of traditional loyalty program is the matter of trust. Trust is either built through a pain-staking procedure of providing credentials to the customers for the quality of the products, service that is prone to manipulation, or by demanding the trust in the case of brand loyalty programs, through rewards that are usually binding for the customers [Epstein, 2018;Boukis, 2019].…”

“…The above problems can be alleviated with the use of blockchain technology, in monitoring the procedures of a firm, i.e. in supply chain management [Kamath, 2018], but also in marketing and management of the customer management relationship process and the management of brand loyalty programs [Antoniads et al, 2019;Boukis, 2019]. Wang et al, [2018] summarized the three essential features of Blockchain base loyalty programs that outperform the current ones: a) real-time exchange and redemption of rewards points, b) increased capabilities of multi-brands and firms exchange through the integration of multiple brands and their loyalty program schemes with the use of tokens [Epstein, 2018;Deloitte,2016], and c) peer-to-peer exchange providing access to the connections with peers in the brand community, enhancing social capital and community feeling for the consumers [Kavoura, 2014].…”

“…Notwithstanding the prospects and potential applications of blockchain technology, the majority of the literature focuses on the on its financial applications [Zheng et al, 2019], leaving out marketing applications, especially in the field of building and sustaining brand loyalty [Wang et al2018;Boukis, 2019].…”