The Evolution of Rewards Programs: From Copper Tokens to the Modern Era
Originally published on the DRM3 Labs Blog.
Rewards programs have a long-standing history, and their evolution reflects not only the changing landscape of commerce but also the technological advancements that have occurred over time.
Early Beginnings: Copper Tokens and Stamps (1700s to 1800s)
The roots of customer loyalty programs can be traced back to the late 18th century, when American retailers began offering customers copper tokens with purchases. These tokens could later be redeemed for products on future purchases. This simple yet effective tactic proved to effectively stimulate recurring patronage.
By the late 19th century, retailers started transitioning to less expensive tools, such as stamps, as part of their loyalty programs. Green Shield stamps, which could be redeemed for catalog products, became one of the first retail loyalty programs and a predecessor to modern day programs like Aeroplan.
The Modern Era: From Box Tops to Frequent Fliers (1900s)
The 20th century saw the introduction of various brand-specific programs. An example of this is Betty Crocker’s box top program introduced in 1929. Customers could collect box tops printed directly onto product packages and redeem them for rewards, laying the groundwork for loyalty programs as we know them today.
One of the most well-known loyalty programs was launched in the late 1900s: American Airlines’ Frequent Fliers program. This program, which now boasts over 50 million members, revolutionized customer loyalty by rewarding customers for their continued patronage. Around this period, loyalty aggregators also surfaced, enabling customers to earn points from various retailers and redeem them at others.
The Digital Revolution: Online and Mobile Rewards Programs
Ecommerce and digital payment infrastructure have democratized rewards programs in recent years. Now, anyone can launch a rewards program for their site or store. A notable example of a mobile-optimized loyalty program is the Starbucks Rewards, which serves dual purposes — a rewards program and a mobile payment method.
Rewarding Data Sharing: Platforms like Tartle
In recent years, a new trend has emerged in the rewards space: data monetization platforms. Tartle is one such platform that incentivizes users for generating valuable data. Users can sell data packets, which are collections of information used for research purposes, and earn money. Tartle also offers a referral program, enabling users to earn additional rewards by inviting others to join the platform
Blockchain-based Rewards Programs: Brave, Nodle, and More
Blockchain technology has also revolutionized loyalty rewards programs. Examples include Hivemapper, Brave, and Nodle.
Hivemapper rewards users with HONEY tokens for contributing to their decentralized mapping network. Brave, a web browser, rewards users with Brave Tokens (BAT) for viewing privacy-respecting ads. Nodle connects the physical world to Web3 and uses smartphones as edge nodes, reading devices and sensors in the physical world and connecting that information to the blockchain.
Users can become Data Producers or “Miners” of device and sensor data.
Additionally, the COIN App uses a smartphone’s GPS to track user movements in the physical world and rewards them with COIN tokens, which can be redeemed for merchandise or XYO tokens.
“X-to-Earn”: Harnessing the Power of User Engagement
The “X-to-Earn” model is diversifying user interactions with digital platforms. Key examples of this model include:
- Play-to-Earn: Blockchain games are offering in-game rewards. Players earn cryptocurrencies for winning games or trading in-game items like weapons and avatars. For instance, Axie Infinity allows players to earn tokens by playing and winning battles.
- Move-to-Earn: Users are rewarded for physical activities, integrating health and digital currencies. STEPN is a notable platform here, offering rewards for walking, jogging, and running.
- Watch-to-Earn: Users are compensated for watching video content, diversifying the video revenue model to include audiences, not just creators and platforms. XCAD Network, for example, collaborates with YouTube and Twitch to reward users who watch and share videos, and interact with creators.
- Learn-to-Earn: Educational initiatives in the cryptocurrency world are incentivized. Coinbase’s Learning Rewards program is a perfect example, rewarding users with cryptocurrency for watching educational videos about specific cryptocurrencies and completing quizzes.
This innovative model demonstrates a future where everyday online activities are not just interactive and participatory, but also financially rewarding. The evolving landscape of user incentives suggests that as we continue to engage with the digital world, our activities will have increasing potential for tangible rewards.
Conclusion
The evolution of loyalty rewards programs from the simple copper tokens of the 18th century to today’s sophisticated blockchain-based rewards systems reflects significant advancements in technology and commerce. These programs have transformed from simply incentivizing purchases to rewarding customers for their data, time, and engagement. Users are now empowered to take control of their privacy and earn from the data they generate, marking a significant shift in the value proposition of loyalty programs.
