Last week, Eastman Kodak announced it was creating its own digital currency. That's right--the company that initially refused to go digital is now diving headfirst into the deep end of the digital world. And, as it turns out, shareholders are loving it.
Shortly after Kodak made the announcement, stock prices doubled. This new interest in the company comes nearly six years after Kodak filed for chapter 11 bankruptcy in 2012. And while the brand eventually made it out of bankruptcy in 2013, it has yet to experience the same pre-digital level of success it once did.
So, while creating a digital currency might seem like a good idea for the struggling brand, will this leap into the digital space be enough to bring Kodak back from the dead?
The digital currency bandwagon
If you've been monitoring digital or cryptocurrencies over the past few months, then you know this market is a volatile one. The headlines seem to fluctuate between rising and falling prices daily--if not hourly.
But, regardless of the frenzied market, it's clear that--one way or another--we're already on the digital currency train. We are currently living in an age where Hilton points can be used to buy products on Amazon and where Millennials are using Venmo to pay rent. Digital currency is already here--the exact way forward might be murky right now, but this is the direction we are headed in.
And because we're already on the digital currency train, companies and brands need to start thinking about the implications and potential uses.
However, as with any new trend, problems arise when companies:
- Jump on the bandwagon for the sake of being on the wagon.
- Don't put the customer at the center of their strategy.
- Put the cart well before the horse (looking at you Pets.com).
KodakCoin might be an example of all the above. According to David Gerard, author of Attack of the 50ft Blockchain, the digital currency Kodak is creating is shaky at best. Gerard stated that Kodak's offering, "Doesn't do anything that signing up for Shutterstock or Getty Images wouldn't."
The company appears to be trying to solve a problem that existing stock sites have already solved. The only difference is they are doing so with a currency that the market might not be ready to invest in yet. Plus, this is an extremely sophisticated and complicated capability to offer for even the most digitally savvy company.
However, this doesn't mean that leveraging digital currency is a bad idea. There is real power in cryptocurrency right now--even the mere mention of it was enough to put Kodak back in the limelight. But to truly harness the power of where digital is going, companies need to do more than what essentially boils down to a PR or marketing move.
Take KFC Canada for example. They recently released 'Bitcoin Bucket'--a bucket of regular chicken that you can have delivered to your door in exchange for the cryptocurrency. It sold out in an hour, and their parent brand's stock prices spiked the day of the Bitcoin Bucket announcement.
But aside from a clever marketing gimmick, this doesn't do much for KFC's digital strategy. Will they really be ready to accept cryptocurrency in stores around the world? Will every single one of these transactions be seamless and painless for the customer?
The same goes for Kodak. Sure, it sounds like this legacy brand is going much deeper into digital currency than KFC, but the real question remains: Will KodakCoin truly solve the wants and needs of the customer?
The value of providing real value
When it comes to delivering value with digital currency, American Express is a strong contender. This company is taking aggressive steps to delivering real value to its customers through its membership points program--essentially turning Amex points into a digital currency.
In the past, accumulating Amex points might be used to book the occasional free hotel room or upgrade to first class. But today, Amex has made a major push to integrate the buying power of its rewards system across many different e-commerce environments. From GrubHub orders to Amazon checkout--consumers are now commonly offered the option to "pay with points."
This approach is Amex's attempt to migrate the rewards system into your daily life as an ordinary form of currency. The downside is, in this case, this currency is not even remotely neutral--as opposed to the design of cryptocurrencies like Bitcoin or Ethereum--and is quite literally controlled by a corporation. This then means that Amex can devalue its currency whenever it deems appropriate.
But what makes this example really stand out is that Amex is offering value to consumers through this pseudo digital currency that it's already had "in circulation" for years. Customers are already using points, they already see the value in it, so Amex is now taking that value and doubling down on it.
No matter which digital offering your company is considering--whether it's augmented or virtual reality, voice assistants, an omni channel shopping experience, etc.--there needs to be real value. If it's not making your customers' lives easier or better, then it won't work. And if you don't have the right people, processes, and technology in place, then you're headed toward a disaster.
So, is it possible that KodakCoin will save Kodak from their original missteps in digital? While the strategy behind the offering seems unstable, Kodak is certainly better off embracing digital then quietly falling into obscurity as we move deeper into the Digital Age. What will make this currency a raging success is ensuring that they're not just jumping on a bandwagon, but are creating a digital solution their customers truly want and need.