NAU Builds on Blockchain to Dethrone the Coupon King
Competition among brick and mortar businesses is fierce, and so naturally, an industry has sprung up that supposedly helps these merchants gain an edge over one another—and their online counterparts as well. One of the biggest factors contributing to the success or failure of these merchants is how effectively they can pull internet denizens away from their screens and through the front door. The industry built around this idea focuses primarily on location-based coupons that direct online audiences to local businesses, where they can go and receive a discount.
It sounds simple enough: pay to attract local customers with an online coupon, effectively slicing one’s margins even thinner to win business and hopefully, generate positive word of mouth. Indeed, this is the simple value proposition that companies like Groupon purport to offer small restaurants and shops, but it almost never happens like this in practice. Groupon is the single beneficiary of a system that thrives on asymmetry of information, and only on paper do its partners see the kind of results that it advertises.
Blockchain has emerged as the great equalizer in response to this reality, and will tear down barriers that currently aid gatekeepers in perpetuating imbalanced business models in several industries. It’s already helping companies like NAU.io turn the tables on entrenched interests such as Groupon and FourSquare, and will soon illustrate to consumers what they’ve been missing this whole time.
The Status Quo Needs a Change
Before Groupon, merchants would hang a sign in their window advertising a free croissant with their cup of coffee, for instance. This marketing effort cost them nothing but the effort it took to make the sign, and the carefully calculated loss incurred by offering free food, of course. Groupon exists for the same purpose, but can extend the reach of these deals into the online sphere more effectively, because they buy local targeting information from big data firms like Amazon, Google, and Facebook.
Unfortunately, the cost to Groupon of buying this data means that they have their own bottom line to protect, distancing their interests from those of their partners. Accordingly, Groupon pushes advertising plans on merchants that include too-generous coupons and difficult-to-optimize campaigns that will often result in a break-even event—if the merchant gets lucky. Supposedly, it’s all to drive more traffic into a business and harness repeat customers, but if that’s the case, why are the coupons restricted to single days and items? They also force customers to bombard a store in a short window of time, which means only the most prepared businesses can maintain quality standards.
New Challengers Appear
Such is the inevitable result of any middleman in a centralized business environment. The consequence for this type of dynamic in the big data industry is an asymmetry of information, which limits non-participants in terms of customer reach and makes it difficult to compete. Centralized data practices mean that it’s easy for gatekeepers to hold information at ransom and monopolize the insights they receive from it. However, blockchain is a new architecture that is being used in solutions like Blockstack and NAU.io to create a new industry template.
Blockstack relies on the decentralized blockchain network to build a ‘new’ internet, one that offers content in the same format as the existing one, but where individual users control their own data. All funny videos, applications and other forms of media that would otherwise take one’s location and demographic information compulsorily from users are unable to do so. Instead, users set their data preferences inside their blockchain browser profile, including where to store it (if at all), who to sell it to, and more. As ideas like this proliferate, ancillary solutions like NAU.io will use them to provide the same kind of value that Groupon does currently, though much more transparently and effectively.
NAU.io uses the voluntary data practices proliferated by blockchain to offer merchants a more precise, efficient coupon solution than Groupon and its many imitators. Thanks to blockchain, NAU.io can offer a value-added platform instead of one that extracts value from participants. Merchants using the platform to drive business will pay NAU tokens to those locals referring their coupons to friends who redeem them, creating a more sustainable cycle of value between all participants. NAU tokens are a more flexible reward for customers’ organic social proof, and the original referrer receives 95% of the tokens resulting from their referral. This system contributes more to those individuals who want to be brand advocates and protects their place in it.
Removing the Gatekeepers
Vigilant enthusiasts have recognized in almost every industry blockchain has infiltrated that the technology tends to improve existing paradigms while also negotiating a better deal for all stakeholders involved. This applies also to those who are considered the gatekeepers of the current status quo—yet even if these industry giants can benefit in a new environment, they will resist it unless people overwhelmingly choose blockchain. This can only happen by offering blockchain solutions that truly motivate people to make the switch, and then services will follow.
After a successful ICO, platforms like NAU.io represent some of the young blockchain industry’s most encouraging advance. Should blockchain realize its full potential, it will be because people just can’t ignore the vastly superior value that NAU and others like it deliver.