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Where we are now. Tokens are versatile, they can be used by merchants in a number of different ways. And this is important, because consumer behavior varies at each type of business. Local barbershops might have customers that come in once a month, and spend on average less than a $50. A local deli may have customers who come in daily (more frequently), but spend on average less than $5. Clothing boutiques might get customers who come in once a year, but spend on average around $250 or more. The token can fit any type of business, since each business can decide how to use their token. The clothing boutique might decide to set up their token as a gift card, not to increase average spend, but perhaps to increase frequency. For example, “This token gets you $20 towards any in-store purchase”, drawing customers back into the store. The deli may set up their token to boost sales of a particular item, such as “This token gets you a free bag of chips and soda with the order of any of our signature ham sandwiches.” And the barbershop may choose to set their token to maximize customer retention, and keep their customers staying loyal, like “This token gets you 1 free haircut of choice — awarded after you purchase your 7th haircut.”
What we’ve done. Over the last two years, we tested out variations of ‘rewards’ and other products that would essentially help do a few things for the merchant. First, bring them more revenue. Second, bring in more customers (or bring in their existing customers more frequently). And third, help ‘modernize them’ with a digital mobile-based interface (that most national chains have, but most small businesses are still without). As we tested out different iterations, we began noticing some of the problems with existing rewards products currently out in the market. In some cases, the product didn’t really make sense for all types of merchants. A ‘punch card’ for example, made sense in businesses with frequently recurring customers (like the coffeeshop or the deli), but didn’t make sense at the spots you’d go once or twice a year at most (like the local clothing boutique or the eyeglass store). In other cases, products like coupons were just ‘old’ and ‘tacky’, that a lot of businesses, especially high-end ones, would avoid using on purpose. And then in other cases, some businesses we spoke to would have rewards programs but found them too niche (only catered to specific types of customers, ie foodies etc) or weren’t ‘local’ enough (targeted potential customers regionally, but not those closer by, in their town or neighborhood). Things like gift cards worked great (if a business had them), but may not be purchased as often by customers. But also, gift cards we found only applied to that store (ie could not be applicable to other local merchants as part of a ‘buy local’ initiative), and therefore further limited their ‘reason to buy’ for a local customer. We knew we had to create something better.
What’s next. All tokens are store-specific, so they can only be redeemed at that token’s associated business. This creates a simple way for businesses to incentivize, track, and retain their own customers, and drive revenue and foot traffic to their particular store. But in the coming months, we’ll begin introducing ‘gold’ tokens, tokens that can be used at any store. The ‘universality’ of these tokens will be immensely beneficial for users gifting tokens to friends and family. Say I want to buy my cousin in Texas coffee, while I live in New York. With the current tokens (colored in red), I’d need to know where she lives or works, so I can find coffeeshops close to her. Then I’d need to pick one of those coffeeshops on the app and buy their token, not knowing which is her favorite or where she typically gets her coffee. With gold tokens, I could just gift a gold ‘coffee’ token to her, and she could redeem that at any in-network coffeeshop she likes. This simplifies the process for the sender, while also adding more options for the receiver. We have many more features we plan on introducing, but our focus right now is on our core product, the store-specific (red) tokens. We think introducing these universal (gold) tokens soon however can help create a broader application for using tokens for the everyday user, while also bringing in additional recurring token redemptions (and therefore revenue) for the local merchant. We’ll elaborate more when we launch this feature.
What you should know. We developed our token system this way for a reason. Business owners typically have a lot of things going on and a lot of things to worry about, on a day-to-day and week-to-week basis. As one local town representative told us, the last thing a merchant needs is ‘another thing to learn how to use’. More importantly, during business hours things can get frantic, especially when there’s a lot of customers going in and out. And any digital product that’s time consuming and cumbersome and slows down that process can be a big turn-off. Our simple setup and 1-click redemption can ease that pain. And for store owners that may feel even that as a burden, we have physical token cards (in lieu of digital tokens), that they can pass out and ‘redeem’ in-person. We’ll elaborate more on physical token cards at a future date. We should also note, there are certain do’s and don’ts when setting up your token. One of the things that sets us apart from other rewards apps is that our ‘rewards’ are purchasable. We recommend that merchants set their tokens as something that is worth buying (ie a reward that can have a dollar value allocated to it). We also advise merchants to make their token something that’s unique or exclusive from other sales or promotions offered to other customers. For instance, if a boutique is doing a ‘Fall Sale’ of 20% off everything in-store, for anyone that comes in, then there’s no real reason to put that on a token (for a customer won’t feel a need to buy it nor will it feel special when received from the merchant). You can read more tips in our merchant guidebook.
What we believe. As a tech platform, we have a saying: ‘give them the instrument, they’ll make the music’. Each user can be given the same product or tool, but will create with it and use it how they best see fit. And a simple instrument (like a piano, for instance) can yield a truly unlimited variety of different songs. We’ve designed the token system to be something that could be broadly applicable, and yet malleable and adaptable to each specific business’ use case. Each merchant can set up their token how they wish. Tokens offer benefits that are tangible, measurable, and practical for small businesses, driving real sales and more foot traffic in-store. Moreover, tokens are super easy to use (initial set up takes less than 5 minutes for the merchant), and they’re super easy to maintain, unlike maybe other marketing products (or even social media based products), that require constant upkeep and monitoring. And lastly, tokens can help brand a business. Each token can be designed with their business’ logo, but also the token reward itself can be tied to that store's special or signature item, truly accentuating what makes their business unique. We believe the most important feature we can build right now is the integration with in-store point-of-sale systems, which will essentially allow customers to automatically earn tokens the more they shop at these stores. This will increase the value of our product to the individual merchants, and drive more consumer spending to the local small businesses community as a whole. With integration to in-store sales, we can unlock new and exciting ways for merchants to harness the potential of their token. This can include customers earning tokens after purchasing particular items, or merchants marketing tokens to neighboring business’ customers in the area. All without additional input or work from the business owner. We’ll discuss this in more detail when we build out this feature.
What we need. We’re raising $350k in capital for our pre-seed round. We’ve gotten $45k in commitments thus far. As always, any referrals to early stage investors in this space would be greatly appreciated. Our product can be categorized under SaaS, web3/blockchain, or ‘small business solutions’. And of course, we’d love your help as well in our fundraising efforts and welcome you to invest in our round. Funds will help us build out our product and grow our team. Additional capital will also allow us to continue pursuing partnerships with local third-party entities that further our mission of ‘Modernizing Main Street’. ______________________________________________
In summary, tokens, tokens, tokens! I can never get enough. But that’s all for now, folks. Shoot me an email at neelan@redkart.com for more information. Until next time!
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