Towards a World Without National Currencies?
Branded Currencies Will Be The Dollars and Yuans of the 2020s.
The whole world knows bitcoins, the virtual currency that's setting the internet
on fire. But the future holds many surprises for currencies. If crypto-currencies
are beginning to appear today, tomorrow, branded currencies will see the light
Tomorrow, Coca-Cola Banknotes Versus Nestlé Credits?
Many brands have already launched their virtual currency in the shape of the
already well-known bitcoins, or more recently, 'ether' the revolutionary virtual
currency that will come into circulation this year. Amazon with its Amazon
coins, Facebook and its Facebook Credits, Pepsi's Pesos and even Beyonce
Bucks for the more imaginative, many branded currencies (because yes,
Beyonce is a brand) are monetizing your relationship and your fidelity with
your favourite brands. Thus, brands are strengthening their brand loyalty
through their virtual currencies.
If a world where Coca-Cola banknotes competes with Nestlé credits
seems far-fetched to you, believe us, it's not so far away, at least for
Millennials, those youngsters born in the 1980s as confirmed by a recent
study. According to the Edelman Trust Barometer 2014, 45% of 25-34 year
olds in the United States would be willing to use a 'branded currency' in their
We won't be shopping with Beyonce Bucks tomorrow, you may say.
You're probably right.
But other forms of brand currencies exist and you may be unwittingly using
Beyond coins and credits, other branded currencies have been in circulation
for a long time and are well-integrated to consumers' daily lives.
Let us not forget that there are now more unused air miles in circulation than
dollar bills. Generally speaking, loyalty programs are often actual microeconomies.
Starbucks, for instance, sells as many espressos with Loyalty
Points as with actual money.
The world's global loyalty points stock is estimated at $165 billion. This is
equal to the GDP of Vietnam.
In reality, the strength of these business models is largely based on dormant
or unused loyalty points. Coupons lying in the bottom of our drawers and the
air miles that we let expire are essential to the profitability of these
Some companies might go bankrupt, while more and more economists are
talking about a speculative bubble in the making.
In the Future, Currency Will Not Only Be Branded, It Will Also Be
Creating brand loyalty through a points system is good, creating brand loyalty
by engagement with the brand is even better.
Nike's "Sweat your Bid" campaign proposes letting customers use their sweat
as currency in on-line auctions. Sensors in Nike sneakers calculate the
amount of sweat produced when you exercise. This is then converted into
Nike Fuel tokens valid to purchase in the Nike store.
Whoever said that money has no smell?
But branded currency is not simply a clever marketing ploy. It can also provide
a concrete answer to some politico-economic problems that national
currencies like the US dollar, or transnational currencies like the euro, cannot
solve due to their behemoth size and lack of flexibility.
Answering specific micro-economic issues is easier with a micro-currency
specifically tailored to a particular market.
In some African countries, in Egypt in particular, Vodafone launched Fakka, a
system that allows shopkeepers to give change by mobile phone credits.
For these countries with precarious economies, cash shortage problems are
frequent. Shopkeepers are obliged to barter or to give change to customers
with fruits or vegetables. So this is a really useful innovation for this situation
and an excellent prospective tool for Vodafone.
Similarly, a payment system called S-twit will allow French twittos to break
free from the constraints of banks to pay, transfer money or give to
associations, all for free and publicly. After all, in the future, money will no
longer be taboo.
Because, in the future, it'll be easier to own a smartphone than a wallet.
Sweden became the first country to officially announce the death of
banknotes. No date for implementation has been officially set as yet, but 80%
of Swedish are in favor of the principle. It must be said that payment by cash
represents only 5% of retail revenue in the country. Throughout Sweden, the
little sign "Vi hanterar kotanter ej" ("We don't accept cash") is a familiar part of
the national landscape. Mulled wine at the Christmas market or a beer at a
bar, even small amounts are paid for electronically. The customer's ID,
location, amount and type of transaction - a whole bundle of specific new data
is available to brands and banks!
Following Gold and the US Dollar, the Brand is the New Benchmark for
As the world is running low on trust, especially in large political and economic
institutions such as stock exchanges and central banks, major brands are
increasing their trust capital.
When the reputation of a brand serves as a yardstick, sometimes the corner
drugstore offers the most telling experience. In New York, crack dealers are
more willing to be paid in detergent than in cash, but only if the detergent in
question is a barrel of Tide. Indeed, this core Procter & Gamble brand - the
American equivalent of our Ariel - is synonymous with quality, efficiency, and
therefore trust. In any case, Tide inspires more trust than greenbacks, which
can often be forgeries. This is so much the rule that it is not uncommon to find
Tide barrels fitted with anti-theft locks on New York drugstore shelves.
While this story is rather offbeat, it still draws our attention to the intangible
value of brands and their authority. If we had to use coffee beans for trade
tomorrow as the Pre-Columbian civilizations did, the owner of Nespresso
coffee would be very rich indeed (the latest limited edition coffee sells for 12
euros for a box of 10 capsules), whereas common mortals would be obliged
to bulk-buy their beans from Café Gran'mère or Monoprix.
With the development of mobile and social networks throughout the
Western world and developing countries, developing a branded
currency is not so complicated.
Beyond coins and credits, the future success of consumer brands will pass
through imagination and creativity regarding branding their currencies.
Engaging and retaining consumers, responding to micro-economic problems
while capturing a market, or establishing the brand as an absolute standard of
trust - and perhaps others not-yet-imagined issues.
Distribution, branding, digital experience, physical experience - today the
boundaries are blurred as our businesses are being redefined.
But at the heart of any device, the power of the brand is invariable. For us
specialists to imagine the future.
So many exciting projects for the coming years at the intersection of branding,
micro-economics and design.
One thing is sure, money may not buy happiness, but in the future, the
creation of new currencies will make some brands very happy indeed.
MD FutureBrand Paris
Online article in French available here