Branding with Blockchain: Part 2
The following blog was written by EVERY advisor Quinn DuPont, UW research associate and accomplished writer and consultant. While opinions are his, they are generally shared by EVERY.
Blockchain technologies can, in some dramatic and surprisingly radical ways, alter core business practices in service of a new brand strategy I call “open branding.”
Recall from part 1 in this series that some brands on the EVERY platform are already “co-produced” through business partnerships that align and integrate companies that seem, in traditional business logic, to be competitors. In this blog post I discuss how companies can, using the organizational strategies and technical capabilities of blockchain technologies, take the idea of co-production one step further: First, by moving beyond merely transactional relationships with their customers and then, second, by opening up their brand to be actively managed by market forces.
Relational and networked business practices
EVERY will be as much a retail company (as I noted in a previous blog post) as it is an “engagement” platform. Engagement platforms are a new way of doing business that move away from a traditional value exchange — selling stuff, in other words — and move towards value creation.
This kind of value creation involves aligning strategic vision, customer desires, marketing and branding strategy, logistics, and production. For traditional brands, customers can create value through word of mouth endorsement, social media engagement, and on occasion, interacting directly with brands and producers. Ultimately, these traditional brands rely on transactional interactions with their customers.
More robust value creation transforms the customer into a participant who is capable of direct input in the design and production processes: it’s evolved crowdsourcing. The most robust and advanced systems of value creation, such as those potentially deploying blockchain technologies, form a networked relationship between every stakeholder, including the customer. Retail blockchain platforms may strive to create this relational, networked engagement by tying together data flows between retail platforms, logistics and shipping systems, design processes, and supply and demand analytics.
Blockchain technologies offer some useful features for creating networked and relational business practices.
First, in this environment, it is important that all stakeholders are treated as peers. The distributed nature of blockchain technologies automatically aligns this business goal to system design.
Second, blockchain technologies lower (but do not eliminate) trust requirements, thereby permitting the free flow of what would otherwise be considered proprietary information. Because information is protected within robust, blockchain access controls, engaged consumers can — if desired — selectively share personal information or consumer preferences.
In this way, blockchain technologies offer an easy way to make a privacy-preserving and highly engaging loyalty program for brands to provide to consumers.
Open branding
Open branding is created when combining co-production and relational and networked business practices. Admittedly, not all companies are ready to relinquish control over their brand to such an extent: Open branding is created from the bottom up and driven by the market.
Instead, many companies will stick with the branding strategies they know: directed, top-down, and rigorously “on message.” However, for those companies willing to test their brand on the market, open branding offers many opportunities.
By giving consumers a portion of control of the brand ecosystem and retail architecture, through token use and information sharing, companies can test sentiment using powerful signals, such as token price and liquidity. Brands, therefore, are able to encourage token use across the range of possible applications.
For example, a company embracing an open branding strategy might “price” a potential customer not just through the value of sales generated, but rather, through that potential customer’s data sharing practices, network size, or platform engagement. This alters an important paradigm in businesses, as it means a traditional “influencer” could be just as valuable as a consumer — maybe even more so.
Because of this, a company’s brand isn’t just associated with the products on sale and the message it controls. The voice of people associated with the brand — participants on the platform — ultimately shape the direction of a brand.
The keys to not losing control of an “open” brand are metrics and analytics, which is where blockchain platforms like EVERY can excel. Since open brands don’t have to create top-down brand messages, they must be managed in more subtle ways. Using sentiment insights (collected from selectively shared data among consumers and brands) and price signals, brands are able to engage individual influencers, slices of sectors, or find innovative opportunities for partnerships or collaborations.
Not every company is ready for an open branding strategy, but by embracing blockchain technologies and sophisticated retail systems, small brands with limited marketing budgets could experience a strategic advantage over traditional, established brands.
More reading
Djelic, Marie-Laure, and Antti Ainamo. “The Coevolution of New Organizational Forms in the Fashion Industry: A Historical and Comparative Study of France, Italy, and the United States.” Organization Science 10, no. 5 (1999): 622–37.
Ramaswamy, Venkat, and Kerimcan Ozcan. “Brand Value Co-Creation in a Digitalized World: An Integrative Framework and Research Implications.” International Journal of Research in Marketing 33, no. 1 (March 2016): 93–106. https://doi.org/10.1016/j.ijresmar.2015.07.001.
About Quinn DuPont
He is currently a Research Associate at the School of Information, University of Washington and from 2019 Assistant Professor in the College of Business at University College Dublin. He has a PhD in Information Science (Toronto), and is an ALA-accredited librarian (Western), with a decade of industry experience as a Senior Information Specialist at IBM and IT consulting. His current research focuses on ethical practices of computer security researchers, and cryptocurrency and blockchain technologies. He is a member of the Standards Council of Canada and ISO blockchain standardization committees, Chair of Education at the IEEE Blockchain Initiative, and advisor to several crypto startups. His book, Cryptocurrencies and Blockchains (2018, Polity), is a scholarly survey of cryptocurrency and blockchain technologies in society.
-Originally Published on the EVERY BLOG
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