Bitcoin Adoption through Cash Back and Loyalty ProgramsDecember 15, 2018
Providing a chance for non-users of digital currencies to change their mind is never an easy task. Usually, the direct approaches to this fail to work, as evangelists and other crypto supporters rarely successfully connect with an audience that is completely outside of their everyday experiences. The same is true in reverse – this audience usually perceives the talk about bitcoin or some other cryptocurrency as abstract and hard to follow. At the same time, the entire dialogue is heavily influenced by the effects of mass media crypto coverage, wrongly perceived information from family and friends and even the movie industry – often, all of these voices are determined to warn the persona about the potential perils of using cryptocurrencies.
However, there are also many successful approaches to the issue of boosting user acquisition for digital currencies. Some of them have proven to be exceedingly successful, like the act of so-called airdropping, where a cryptocurrency network starts its own giveaway process to interested future users. These individuals do nothing more but sign up to the giveaway and then end up with a small amount of the new tokens. While effective, these were focused on the people who already owned one or more some other cryptocurrencies.
This means that the new digital currency does reach more people, but does not really pull-in users who never dealt with the crypto ecosystem. Recently, however, a new method of cryptocurrency adoption system kicked off and it appears as something that could be more than successful, especially outside of the traditional crypto user circles.
Lolli Browser App
Over this holiday season, hundreds of shoppers will be getting their very first bitcoin tokens by doing nothing more than buying through an in-browser application by the name of Lolli. A notable number of the same shoppers are women who are purchasing on the Sephora, a cosmetics chain which has entered a partnership program where shoppers earn cash back in the BTC form. Now, over 30 percent of the users of the app are women as well.
Clearly, the developers behind Lolli are happy with the progress of the app’s user base and engagement rates. Alex Adelman, the CEO of Lolli said that the retailers which the company approached initially are not coming back after passing on the offer. Currently, Sephora is one of the biggest entities that has joined up, adding a whole range of niche retailers in their app’s beauty category.
Aside from these companies, there are many other Lolli partners. These include Everlane fashion brands and retailers in the beauty niche like Ulta. All of them function on the same basic principle – the users are paying the brands using fiat currency through the app and then attain cash back rewards in bitcoin. The simple concept allowed the Lolli startup, now employing only six people to gain traction in an impressive way while many other ventures are hard-hit by the recent market changes and face layoffs or worse.
Potential for New Customers and Crypto Users
The partnership between Sephora and Lolli has not been widely promoted by the retail chain. Still, the success of the initial phases is clear and will likely continue, even though there is a feeling that the retailer is still having second thoughts about it. Analysts point out that this type of approach is expected with cryptocurrency, even bitcoin. What is more important is the fact that users are attracted to the prospect of getting crypto for their shopping.
The whole principle of cash back is designed to be a slight incentive for something that will be no matter what a loss of funds (those who are out of money do not go for cash back – they simply do not buy the same products). In other words, no one is particularly interested in greatly profiting through their cash back funds. With Lolli, however, the appeal is greater because the users are getting crypto which they most likely never owned before.
Most shoppers who go for this will be individuals who have been interested in it for some time, but never had the time or the determination to fully explore it or start the regular purchase-digital wallet adoption method. Others were kept at a distance thanks to the news about volatility and technical factors they never understood. With Lolli, nothing of this matters because the users just get crypto for their shopping efforts without any learning needed or taking on any kind of a risk.
Targeting the Female Demographic
Fashion and beauty are not the first things that come to mind when talking about crypto. In the first 10 years of the cryptocurrency scene, most would agree that the main focus of the adoption community where the most tech-savvy or liberally minded about the economy like esports players, coder and so forth, followed by traders and investors.
The mentioned categories are something much broader and thus something that houses many times bigger targeted demographic. Today, expectedly, there are plenty of stereotypes about each of these groups in regard to crypto. But, with an average cash back of 0.003 BTC or about $10 in current bitcoin price, the users of Lolli could quickly generate substantial funds, especially with the possibility of the return to the 2017 crypto prices.
In other words, there could be a big base of users who have nothing to do with the traditional crypto-friendly groups, all of whom would possess crypto and also a channel for generating more. This alone is the basic setup for a financial ecosystem which wins over the airdrop method – the first produces crypto funds for their users repeatedly while the second one does it only once.
Growth in Adoption
The Lolli app and others like are a very limited means of pushing adoption rates, at least in theory. However, the practice of actual retailers shows that they can be powerful vehicles for attracting those who never engaged with crypto before. For that to work, other large-scale chains of retailers would need to get in on the game and offer their cash back or loyalty programs in crypto. If they do, the user base for crypto could skyrocket in no time at all.