Interest in cryptocurrency and blockchain technology has never been higher, so this is more a smart marketing play than technological advancement.
— Kristen Hawley
Cryptocurrency has dominated headlines the last few months — it’s up… it’s down… what is it, exactly? Bitcoin, perhaps the most well-known form of cryptocurrency, is built on blockchain technology: a decentralized network that acts as a ledger — anyone can update the ledger, as long as they play by the rules. The technology is in its early days, but has the potentially to dramatically change many industries — travel included. (For more on this, Skift Research issued an excellent report on blockchain technology, available for download.)
As this technology continues to develop and grow, businesses, including restaurants, are understandably interested in getting into the cryptocurrency and blockchain game, striking while the iron is hot. Chanticleer Holdings, a Charlotte, North Carolina-based restaurant franchise group announced yesterday it plans to move all of its loyalty programs to blockchain technology: diners at restaurants in the group (burger spots, mostly, including nine Hooter’s locations) will earn cryptocoins with each order that can then be redeemed or traded for rewards, like free food. Basically, this is exactly like any restaurant loyalty program works, except you can give or trade points with others with a no-fraud guarantee, digitally. Not sure that there’s a ton of fraud in restaurant loyalty points, but hey, can’t hurt.
Skift Research Director, Luke Bujarski, outlines why Chanticleer — and others — may be interested in a blockchain-based loyalty program. “They’re building on the mainstream popularity of cryptocurrencies to sell more burgers,” he says. Managing loyalty programs on the blockchain could equal cost savings compared to traditional data infrastructure. Plus, there’s likely real value in being among the first here: “Investing in blockchain sends a message to investors about being tech-forward,” he adds, noting it’s an overall smart move that helps sales, operations, marketing and branding, and investors alike.
So what does this mean for the future of restaurant loyalty programs? Until more of them change their strategies to match Chanticleer’s, not much. This is likely the start of a growing trend, though, as restaurant groups work to build and grow both loyalty programs and data collection across their businesses.