The Era of Interactive Marketing: Exploring 7-Eleven's Use of Web3 and NFTs

Speaker 1: 0:05

Welcome to Marketing Meets Web 3, a podcast that helps marketers navigate the news trends, opportunities and insights surrounding Web 3. Today's conversation is for information purposes only and does not constitute legal or investment advice.

Speaker 2: 0:23

Hello.

Speaker 3: 0:24

Nick, how are you doing? Hi Alberto, I'm great. How are you? I'm fine. I'm hot. I'm hot too. Yeah, everybody's in the middle of hot, I think. According to the news, the earth is getting to record temperatures. This is the hottest planet earth we've ever seen, which is a whole another set of problems, but yeah, we're all hot.

Speaker 2: 0:42

Yeah, I guess this is what happens also when you're recording July. But July has also some nice things, which is one of them is, for instance, free slurpees. How do you pronounce that one?

Speaker 3: 0:55

I think you're saying slurpee right, the 7-Eleven drink.

Speaker 2: 0:58

Yeah, that's the one. I remember traveling in the US from what was it? It was New Jersey to New York. By the way, I got lost and I ended up in Philadelphia. On the way I did stop at one of these places and I saw that slurpee machine and the only time I had seen it before was in a Simpsons episode. So I was very excited and I got like a big gulp. I think it's called, but I don't know. It was massive, it was full of sugar. I almost died. I think that's the reason why I got lost.

Speaker 3: 1:32

Anyway, Wait, wait, wait, wait, wait. You had a big gulp, but did you actually have a slurpee? Did you have, like the slushy drink?

Speaker 2: 1:38

Yes, yes, that thingy, that was like Okay so you experienced the slurpee.

Speaker 3: 1:41

Yeah, the slurpee is a rite of passage. It's a cultural rite of passage. When I was a kid, you had to go through the process of creating the most ridiculous flavored slurpee possible by mixing all of the flavors in one cup. It tasted disgusting and like it was an absolute sugar bomb, but it was the thing to do when you were seven years old.

Speaker 2: 2:01

And I guess a lot of seven year olds, eight year olds, five year olds were playing with that mixing the past 11th of July sorry, because you do numbers, you do dates the other way, but yes, the past 11th of July they were doing this and I guess they did a lot of this mixing because you could do it for free. This was a 7-eleven celebration of their birthday because, well, 7-eleven, and of course they offered this service for free to users, I guess seven year olds. And something else happened this year, which is the interesting part, which is that, along with their slurpee that they could slurp, I guess they also received a digital collectible, a slurpee vibe digital collectible. So can you maybe talk a bit more about Slurpist, because this is your thing.

Speaker 3: 2:55

Yeah, so it looks like what they did is like you're saying they, you could claim a slurpee digital collectible slurpee vibe digital collectible, which is an NFT. This was on the polygon chain or is on the polygon chain, and so really simple process you go to the website, you scan a QR code and then you launch this process where you have flavor mixers and you claim your slurpee vibe digital collectible. I've not gone through the process, so I think I'll have to see what this is about, and it sounds like it's kind of similar to the Slim Jim experience. You could sort of do it again if you didn't like it. There was a little bit of gamification. It sounds like, or at least a game-like experience, and once you got to kind of a happy place with your slurpee creation, you hit the claim now button, you fill out some details, namely your name, your email address and a phone number, and you claim your digital collectible. The creator of that collectible then receives this NFT on the polygon blockchain, of course in their wallet, and so now they have this tokenized asset that is 7-Eleven branded, but it belongs to them and they're off to the races and they can begin their journey with 7-Eleven slurpees. So let's dig into some of the stuff that we see going on in this mint.

Speaker 3: 4:16

I think what we try to do in a lot of these news items is dig into some of the patterns, and what is this saying for the entire industry? So I think, first of all, this game-like experience, this sort of choose your own adventure or create your own collectible, is something we're seeing over and over again, and that's really connecting back to the idea of co-creation With Web3,. One of the things that your customers and your audiences can do thanks to the sort of benefits of Web3, is they can create products and experiences alongside the brand. So it would have been easy for 7-Eleven just to put up some 3D images of slurpees and make those claimable items on their website, but instead they said you know what? Let's bring our fans into this process. Let them create their own virtual slurpee and then mint that slurpee as a digital collectible. So the benefit to that for a brand is that, even if it seems somewhat superfluous or it's a little bit silly, it's fun, and when people have fun, they associate good feelings with your brand and that means that they're going to come back or they're going to have good vibes about you and when they're making a choice about product, they're going to go with the one they feel better about, and so, by having a good experience, having a fun experience with this slurpee creator, it's reinforcing the idea that 7-Eleven is co-creating with their customers. They're making something together and then they're creating that thing and making that a permanent part of the customer's collection of these digital collectibles, and I'm fully convinced that in the future, as consumers, we're going to have hundreds, if not thousands, of these collectibles and we'll have our own personal inventories.

Speaker 3: 6:09

In fact, I wrote an article for Cointelegraph a while ago about this whole concept. But the idea that we're going to have these lockers, these personal lockers of these digital collectibles that are really going to say or tell a story about who we are, about our interests, about the places that we've been, the experiences and the moments that we've had, and that's going to be a really unique way for us to have more personalized experiences. As brands recognize those sorts of identifiers across public blockchains, they're going to be able to target people in new and interesting ways. They're going to be able to create offers that are much more compelling and that resonate with their target audience much better than today's targeted advertising.

Speaker 3: 6:50

Even so, yeah, this is interesting. I think the other thing that we're seeing in this news item is this idea that the the Soulbound which I don't know if we talked about, but these are Soulbound NFTs, which means that people cannot trade them away. That's interesting from a brand perspective because it's a little bit of a safety net. It keeps them from having to worry about people that want to come in and gain the system or are only there to speculate and make money. Instead, this is really just a digital item. It's a digital collectible, it's yours, it belongs to you and you helped create it.

Speaker 2: 7:25

Yeah, it's a few things. In some ways, it's true what you're saying, that there's some kind of template that the industry is starting to use. We talked about Slim Jims, we talked about another one I'm forgetting at the moment that also follows a similar pattern. But, for instance, in this case we have the requirements to get this NFT or this digital collectible. This is for your name, for your email address and a phone number. I don't recall this happening for Slim Jims, for instance. I think you could just create it and you didn't need to give any kind of information, which I'm not saying that this is good or bad, but I think it's interesting that some different companies are testing with this. If the email address or the phone number become a thing, this could become one avenue for getting more information from your customer and then be able to reach them for similar campaigns. I'm guessing next year, everybody who got an NFT from them, one of these digital collectibles, one of these Slarpies, is probably going to receive an email saying hey, it's this time of the year, it's hot again, you can go again and mix some new flavors and see what you get. Again, we will give you a new digital collectible. This could be something that I guess is going to happen. It didn't happen in other projects. We will see who is the one that's going to be the standard as we go along.

Speaker 2: 9:00

The other thing I was thinking when I was seeing this is that, well, the fact that creating a wallet for a user is essentially free and that you are making this very simple for the users, taking all the complexity away means that the user that is following this route is getting a new wallet created for them, in this case from 7-Eleven, with this digital collectible, which is very likely that for a while at least, it will only hold this digital collectible.

Speaker 2: 9:28

If we start to see these for Coke, pepsi and other drinks that you have on the road, you could end up the year with maybe 100 different wallets with one digital collectible on each. That could be messy, I don't know. This is going to be the end goal. I guess it makes more sense as we go along to ask the user if they want to connect their own wallet or they should receive one from the creator of the NFT. This could be something that needs to be worked out in the future, because it doesn't make sense at the end of five years to have 1,000 different wallets with one NFT in each of them. Those are a few things that are different, although similar, and we will see how they eventually get played out. What do you think?

Speaker 3: 10:24

Yeah, I totally agree. I think the pattern here with collecting information about your customer, like most modern marketing, there has to be a reason, there has to be a justification for collecting that info. The consumer has to see the value in opting in. Again, I didn't go through this experience, but I'm assuming that there's some incentive for the consumer to share that information, providing that they are willing to share that information, then this can be a great way to start that conversation with the customer. This can be a new way to ask for that information in exchange for something of value, even if this is just a fun moment that the consumer wants to collect, and maybe that's just something they want to share on social media or they want to just look back because it was funny and made them chuckle or brought back memories of childhood, like my seven-year-old experience in 7-Eleven. Getting them to give a little bit of information in exchange for that digital collectible, I think, makes a lot of sense. That's a pattern that I do expect that we'll see over and over again. To your point about wallets and what do we do if we end up with thousands of items in separate wallets? I think it's a totally fair point. At some point. The consumer is going to want to have some of those collectibles in the same place, or will have a reason to.

Speaker 3: 11:45

I think right now, the trade-off is do you create a really easy and great experience that gets people in the door without having to even think about a wallet, or do you push them to try to create this wallet and go through this complex experience? Because, face it, creating a Web3 wallet it's gotten a lot easier, but it's nowhere near simple. The average person does not want to go through the process of creating a Web3 wallet. They don't want to do things like remember seed phrases. They could care less about self-custody. What is important is that they have a really great experience. Right now we're in the phase and we saw this with Reddit, we've seen this with Starbucks.

Speaker 3: 12:23

All of these different experiences that are leading the way for Web3 are demonstrating over and over and over again that you really need to lead with a great user experience first. Prioritize that. Get people in the door. Get them excited about what you're actually doing once they have that collectible whether it's building a community or creating access to new experiences Get them on board first. Get buy-in. Convince them that you're delivering some sort of value.

Speaker 3: 12:48

When the time is right, then transition them, help them get into a Web3 wallet as it makes sense, a self-custody wallet as it makes sense. That's really when it matters to the consumer, unless there's a problem to solve or there's some sort of incentive on the other side. Humans are pretty good at doing the same thing over and over again. We don't like change, and so I think you know the writing is on the wall. For now, make sure that that user experience is your first priority, and when we get to the point in time with all of this where it makes sense to move those collectibles into a new wallet, then that's the time to help consumers get there.

Speaker 2: 13:28

We'll be right back after a word from our sponsor.

Speaker 1: 13:32

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Speaker 2: 14:03

One area in which humans are willing to take different choices and even go through a few hoops to get what they want is in traveling, something that also happens a lot in this time of the year, and I came across this opinion article that said that argued that travel will bring a new wave of Web3 mass adoption. And basically, what the article says is that NFTs could be a nice, awesome, incredible way of well, incredible way for traveling companies. It could be airline companies, it could be hotel companies, so everything that surrounds the traveling experience. It could be an awesome way for them to create more value for the users.

Speaker 2: 14:51

They argue that traveling is somewhat broken and that the way to connect all of these parts of your journey, of your traveling, could be through Web3 and through NFTs. So they, of course, this piece doesn't go through how to exactly do this in detail, with details about, okay, what's actually gonna be happening in the future, but they argue that NFTs could make this a lot more simple, and we can first discuss whether you agree with this position or not. The other thing I want to discuss is well, we are here every week talking about brands, companies, using Web3. And travel is not one that has come across. Yet they argue it's gonna come soon. But first, okay, what do you think about NFTs fixing, if it has to be fixed, travel.

Speaker 3: 15:52

Well, first of all, I think travel is a huge industry, a ginormous industry, that you know. If we're gonna talk about solving problems, I think we have to get much more granular than travel, so we would need to zero in on a particular aspect of travel, whether that's airline ticketing or luggage identification, or car rental or accommodations, like. I think getting down to specific sectors of the industry is the first place to start, because otherwise, you know, I look at something like Web3 is gonna fix travel, and it takes me back to the early days of blockchain, when everything on the blockchain was a thing and literally there was that. What was it? The Long Island Tea Company or something?

Speaker 3: 16:32

One of these companies that had nothing to do with blockchain added blockchain to their name and they saw this stock valuation go up, which is crazy, right? It's just pure hype, it's speculative, it has nothing to do with the technology or the value of the technology. So my first reaction to this kind of opinion is that it's hype and I need to know much more about the problem that they're proposing to solve or proposing can be solved by Web3. That being said, I have one.

Speaker 2: 17:01

Before you get there, I have one. One of the things they say and please forget my laughing here is imagine a world I'm cutting the article now imagine a world where changing the name on a ticket or registering a pet for a flight becomes hassle free, streamlined and efficient. Close quote. So this could be one of the problems. Come on, nick, you see the value in here.

Speaker 3: 17:24

But I mean, come on. So how does putting an NFT in the middle of that make that process any less hassle free? Because let's talk about the friction in that process If you're gonna change the name. The reason it's hard is because there's a traveler record associated with your database entry in the airline that you're flying with, and so that needs to be updated. And there are real consequences to that too. Things like a passenger manifest right. That has to be updated to make sure that all of the souls on board are accounted for, as that hollow tube of aluminum is soaring through the air at 600 miles an hour. So just throwing an NFT into the mix of things, as we've seen over and over again, it's not.

Speaker 3: 18:08

Nfts are not a panacea. They don't fix everything. They're not magic fairy dust that make businesses better. They can be an accelerant, they can be a way to create new opportunities for engagement, and they can really truly solve problems when the problem is related to things like authenticity or, in the future hopefully things like identity verification.

Speaker 3: 18:30

But the technology isn't there yet, and so when I look at something like registering a pet, for instance, what has to happen behind the scenes to register a pet to fly with you. Well, you have to be able to certify that that pet is of a certain breed and a certain size and in a certain condition of health to be able to fly. You have to pay a fee to the airline for being able to fly with that pet, and then you probably have to do some sort of preparation for check-in when you get to the airport to make sure that that pet's registered with the airline and they know that there's gonna be an animal on board. So those are all very discrete areas of that problem or that process that all have their potential for different kinds of hassle. And so how does an NFT make that any better? I just I fail to see the solution with this one, or really the problem of it's being solved.

Speaker 2: 19:21

Okay, I am failing here with you because I agree, this may not be awesome, but okay, let's go to the second part. Then we are talking about brands getting into Web3. Every week we find a lot more examples and in many cases they are doing this to create, or to explore the possibility of creating, a community to reward their users, to reward their audiences. And one sector, one area, one sector that does this a lot is, of course, airlines. They have all of them pretty much have this point-based loyalty work programs, and I haven't seen I don't know, maybe we need to do some research, but I haven't seen any companies announcing that they want to improve or to want to. They want to explore the possibility of adding Web3 or adding some kind of NFT improvement to their loyalty reward programs. And I find this a bit surprising that almost everybody is getting into this and these big companies with these big programs are not doing anything at all. So why do you think is that?

Speaker 3: 20:31

I think right now there's not a lot of incentive for an airline, for instance, to tokenize their loyalty program and turn those points into something that can be freely traded by the consumer or even traded inside of a closed ecosystem. If you look at the airline partnerships with rewards, they're with mega companies. So you look at Delta partnering with Starbucks so that your points, whether you earn it for the cup of coffee or you earn it for the flight, they're interoperable. That's a massive undertaking for both of those companies. When you think about the scale, the awareness that they have to bring to their customer bases, and so for them the incentive is low to try to create those partnerships in a much more sort of open way, which I think is the promise of web through loyalty. This is the idea that we can take the loyalty points that we earn or the recognition as customers, and we can take that to earn benefits at another business. As a consumer, that's really interesting. And as a smaller business or a business that's competing in an area where there are hundreds or thousands of choices, that might be more interesting and that might be a way for me to acquire new customers or retain my existing customers, because I'm leaning into their preferences to shop at other merchants or things that are complementary to my business. In the case of airlines, it's super competitive. There are maybe four or five big airlines in the United States and worldwide. I assume the situation is the same. Airlines are dominated by huge players who have very high incentive to retain their customers and keep that walled garden closed. So I just don't see a lot of reason for the travel industry to want to raise their hand and start tokenizing loyalty points. I don't think it plays to their favor right now. Now, that being said, if web through loyalty takes hold and consumers begin to expect this sort of interoperable experience, we may reach a tipping point where consumers are now in more control and they're saying you know what? This is exactly how I expect to interact with travel and this is what I want for my loyalty program, and there will be enough sort of noise from their customer base that it makes sense for them to start going down that path. That's how technology generally rolls up to the big players.

Speaker 3: 23:02

You think about e-commerce. How long did it take for travel to become an electronic booking situation? There was a time when, if you wanted to go fly and take a trip, you would go to a travel office and you would sit down with a travel agent and they would talk to you about, well, where do you want to go and what does that trip look like. And they would get on their terminal and they had access to a proprietary system. And it wasn't very long after that that people started waking up to the idea of e-commerce. Maybe a decade and a half later, these ideas started to trickle into the consumer's mind, and now the idea of going into an office to book your airline flight is completely unfathomable. The idea that you wouldn't be able to go online and book a flight is just crazy. And so the same thing could happen with loyalty and Web3 and travel. So that's where I see the opportunity or the potential for this to actually turn into a real consumer benefit, but I think it's going to take a while.

Speaker 2: 24:02

It's going to take a while.

Speaker 2: 24:04

I agree with that, and I agree with your point of the users actually having to make some noise and talking about noise Sorry, I hope there are not a lot of Harriestyle's fans in here, but talking about noise, harriestyle's had a concert recently in, I think it was Scotland, and in this concert the fans that arrived at that venue which, again, I hope none of them is listening to this they all had the opportunity of downloading an NFT and basically have the ticket that they purchased to be at this event and also an NFT that is going to be well-proof, forever, immutable proof, let's say, of their assistance to this concert. What I find interesting is that there were 80,000 people coming to this event and it's told by this article that 5,000 of them actually claimed these wallets and this NFT. I think a very interesting article in the sense that it's giving us some metrics as to people attending a place and people doing something to get something, in this case, getting this digital wallet and this NFT. So interesting, I think, but I don't know what does it take?

Speaker 3: 25:44

Yeah. So let's start with the metric. So let's see, 5,000 of 80,000 fans claimed wallets through the app and that garnered over 100,000 unique interactions. So that's, according to my math, about a 6.25% engagement rate. So of their fan base at the concert, 6.25% of those people engaged with this experience, which is low. I don't know this industry in terms of benchmarks, but I'm assuming that, compared to other types of engagement, that's pretty low.

Speaker 3: 26:21

But this is also new tech and this is a new way to interact with fans. So the fact that anybody's interacting with this is pretty interesting. And then they said they had 100,000 unique interactions. So again, you look at the math on that, that's about 20 interactions per person who decided to engage with this experience. Now I don't know how they're measuring those unique interactions. I don't know, metrics are always subject to a little bit of interpretation or a lot of interpretation. So whether that was one flow in their app or whether that was multiple experiences throughout the course of the concert, who knows? But I think as a proof of concept, as an experiment, this is pretty interesting.

Speaker 3: 27:11

I think, overall, the idea of using Web 3 technology to engage with fans, I think, is one of the biggest areas of opportunity for the entire industry. And the reason why is because if you think about the typical fan, you think about the fan persona. These are people who have paid increasingly large amounts of money to see a performer. I mean, think about some of the ticket prices on Taylor Swift. I mean, we're talking astronomical ticket prices. People are paying to go sit at a Taylor Swift concert. Sorry, harry, I think she's got to be on the ticket price for now.

Speaker 3: 27:47

But so these are people that are completely committed and invested in that experience and why wouldn't they want to take a little bit of extra time and maybe even go through a little bit of friction to create a bigger, a better, a longer lasting experience, whether that's leading up to the event or after the event, giving them some sort of interaction with the artist, the opportunity to buy merch, the chance to win some sort of exclusive experience?

Speaker 3: 28:14

Those are all areas where we don't have a great way with today's systems to do that. Maybe you join an artist's email list and maybe they email you after the event or before the event. But how many times have you gone to an event and then you look at your email the next day and you're like, oh, I missed that email, I didn't enter that chance to win VIP backstage passes, or it was a fun event, but you never think about it again because you get 1,000 emails a week and it's a channel that's flooded with noise. So this idea of having an app experience and tying that app experience to some sort of digital asset whether it's a ticket or a collectible that identifies you as an event attendee and then creates a larger surface area for artists to have a conversation and interact with their fans, I think it's actually one of the best use cases, I think, for this technology right now.

Speaker 2: 29:12

You know what I would like to see. We talked about friction before. We talked about how 7-Eleven was going for the zero friction. What's on what? Forgetting the asking for an email and all that a zero friction experience where you just sign up and then you get your NFT in a wallet that they create for you. In this case, they were asking users to download this app that's going to have a wallet included on it. That's going to be the one that's going to give you the opportunity to then, in the future, access rewards because you were at this concert. The friction in this case, I think, is much greater in my opinion, and this is why I would like to see a comparison of another event where users could just claim their NFT, assuming they have a wallet. That would be one option, one scenario Assuming they have a wallet, just claim the NFT for attending this concert. In another scenario, we could see what could be the claiming rate when, at the concert, you can request with our QR code to claim this and then the venue or the people launching this concert is going to create the wallet and have the NFT sent to you, similarly to what 7-Eleven is doing. I would like to compare those three to see if the interactions become greater under these two other cases. It feels to me that downloading an app is a bit more friction that is added to a user.

Speaker 2: 30:53

I struggle. I don't really like adding new apps In my case. I have an iPhone and I have two screens, so two menus. I don't want to go for the third. The third to me is like banned. I don't want to have any more. Two is okay. I guess there are a lot more people like me that wouldn't like to have a lot of apps in there. This becomes a bit more friction. I like having a wallet and having NFTs on it, or having the possibility of creating new wallets, of course with a MetaMask or some other kind of wallet. I wonder if, in a different scenario, whether the interaction would be greater. I agree with you that this is very interesting, but I'm not sure that you really need another app to do this. I see why they will be offering an app, because that means that they are going to own the experience. I don't think this is necessary. I don't think in the future this is going to fly.

Speaker 3: 31:50

Let me propose an idea to you what if the future app was actually just a specialized wallet? Today we think about apps as this experience that's very connected to a single brand or maybe a single type of experience. Earlier we talked about a tipping point where consumers will have enough of these collectibles that represent, again, their interests, their experiences, their engagement with brands, that they'll want to see some sort of benefit, or there will be a benefit to them being able to have those digital collectibles in a single place. And so today the way we would do that in Web 3 is well, you put those in your own wallet, right, I met a mask or my rainbow or my coin-based wallet and those hold my collectibles and that's how I basically kind of aggregate all of my experiences from these interactions.

Speaker 3: 32:47

But in the future it could very well be that the app or the wallet actually becomes an app and so, rather than just being a general-purpose wallet, we could have something like a fan app which is actually a wallet underneath and that's a place where you collect all of your concert tickets and now, as a fan, I have a way to sort of show who I am as a fan.

Speaker 3: 33:10

Right, I can show that, yeah, I've been to 10 concerts in the past 12 months and this is the type of music and these are the types of seats that I prefer, and this is the merch that I bought.

Speaker 3: 33:21

And not only is that interesting from a marketer perspective because that's a much higher level of granularity on who that person is, and so you can propose better and more meaningful offers to consumers, but as a fan, it's also interesting because it allows me to sort of create an identity on top of my experiences.

Speaker 3: 33:39

So, rather than just saying, yeah, I like music, I'm into rock and indie, it actually creates an area where, on top of all of those experiences, what if I have an identity? What if I have an avatar? What if that avatar is represented by another NFT which reflects my interaction with the fan experience? Right? So as I go to concerts, maybe my NFT changes to reflect how many concerts I'm going to or the type of music that I'm listening to. So I think that's where an actual experience that's dedicated to a particular type or category of digital collectibles could make a lot of sense. And I think it's where we might see some interesting experimentation with this idea that it makes sense to collect your digital assets into a single place what we call today a wallet, what tomorrow could be an app. Who knows?

Speaker 2: 34:32

I see, but I will need more convincing. Anyway, you have time to do so over the next episodes. We can leave this one here and, as always, it's been great talking to you.

Speaker 3: 34:46

Sounds great. Thanks, alberto.

Speaker 1: 34:50

Talk to you soon. Thanks for listening to Marketing Needs Web 3. If you enjoyed today's episode, please like and subscribe in your favorite podcast app.