Starbucks is Entering the Web3 Era

Over the past five years, Blockchain disrupted not only the banking sector, but other non-financial industries such as health care, supply chain, education, real estate, etc. Although coffee may not be high-tech, Starbucks decided not to be left behind regarding new Web3 technologies. This month, the company announced that they would launch a program called Starbucks Odyssey, a non-fungible token (NFT)-based loyalty program. An NFT can be a piece of digital artwork, a sound, or another collectible item that can only be accessed online (Hanlon, 2020). Starbucks’ NFT collection, which the company named “journey stamps,” will rely on the “coffee art and storytelling” of the company. Given the brand’s cultural heritage, the CEO of Starbucks is assured that the company has so much to offer in the NFTs marketplace. Customers and employees will be presented with two options for collecting Starbucks NFTs: either they can purchase limited-edition tokens directly through the app using their credit card (a crypto wallet is not required currently), or they may receive digital stamps by completing in-app activities like quizzes. Starbucks is integrating NFTs with its loyalty program to give customers more opportunities to interact with the brand, allowing Starbucks fans to unlock new benefits and exclusive coffee experiences.

Unlike other companies and brands that approached blockchain technology as a side experiment, Starbucks is determined to use Web3 technologies to meet new customers’ needs. Earlier this year, CEO Howard Schultz unraveled the importance of the new cohort for the organization and shared Starbucks’ objective of changing the customer base and conversations about the brand. Web3 unquestionably revolutionizes digital marketing because it enhances the user experience by providing rich and interactive advertising opportunities. Marketers can use Web3 to understand their customers better and offer more personalized services, which is exactly what Starbucks plans to do. With this courageous step forward, Starbucks is trying to appeal to Gen Z, the generation that belongs to digital natives. As Hanlon (2020) explains, digital natives have been born in times when mobile phones, tablets, and wearables are the norm. Therefore, their digital literacy has made Gen Z fluent in the use of technology and eager to adopt cutting-edge technologies. Moreover, COVID accelerated the digital transformation by months or years, so Starbuck Odyssey is an important project to keep the company adaptable, relevant, and competitive amidst a shifting landscape. Starbucks will also have access to different sources of information that will drive its future marketing and business strategies. Leveraging Web3 technologies is undoubtedly an excellent step for Starbucks to achieve its ambitious goal of adapting to changing customers’ needs.

Furthermore, with the NFT marketplace, Starbucks is expanding its loyalty program to create a digital community of coffee lovers. Starbucks fans are among the most loyal ones, and the company’s rewards program is frequently used as an example. For instance, Starbucks Rewards – the company’s reward program – is among the best in the business, primarily due to how successfully it has adapted to new technology like the Starbucks App. With Starbucks Odyssey, the company is taking its loyalty program a step further. It will now find out how devoted its customers are to a new rewards program that depends on more brand interaction than ever. In Starbucks Odyssey, members can participate in different activities to expand their understanding of the Starbucks brand or coffee in general. Starbucks aims to establish a place where the members can socialize over coffee, partake in immersive activities, and celebrate the brand’s past and present.

It is interesting, though, that Starbuck Odyssey seems more like a closed ecosystem since only selected members on the waitlist would be able to join the program, and its NFT collection will be limited. Web3, on the contrary, is designed to be more accessible and inclusive. However, this is just the beginning of its project, and Starbucks is trying to gather as much feedback as possible to develop this idea even further. Besides that, Starbucks wants to get the word out there, and an exclusivity card always gets people talking more about the product or the brand. As Berger (2016) explains, exclusivity boosts word of mouth by making people feel like insiders. Fans who enter the Odyssey first, will feel more special and unique. With Odyssey, Starbucks is going the extra mile to build a community and continue interacting with them through various immersive experiences related to its products, rather than merely snagging its consumers for a single sale.

Web 3.0 is undoubtedly changing the marketing landscape and altering how we think and communicate online. It goes well beyond blogs, websites, SEO, and PPC advertisements. Starbucks proved once again that it is an innovative and forward-thinking brand by being one of the first companies to jump on the bandwagon of creating its own NFTs collection and introducing a new-generation loyalty program. Loyalty programs have always been a catalyst for Starbucks’ growth, and with Starbucks Odyssey, the company is taking the loyalty programs to another level. Getting discount cards for shopping may seem appealing, but over time, they became less engaging. People today favor incentives that provide them with long-term benefits. Rewards and prices that Starbucks have planned indeed will be great encouragement for their customers to learn even more about the brand and become loyal ambassadors. 

References

Berger, J. (2016). Contagious: Why things catch on. Simon & Schuster

Bonifacic, I.  (2022, September 12). Starbucks thinks you’ll want to collect NFTs to earn reward. Engadget. https://www.engadget.com/starbucks-odyssey-nft-platform-announced-174529870.html

Castrodale, J.  (2022, May 5). Starbucks is launching its own NFT collection. Food&Wine. https://www.foodandwine.com/news/starbucks-nfts-perks

Cramley, J.  (2022, September 12). Starbucks to offer NFT-based loyalty program using Polygon’s bockchain technology. CoinDesk. https://www.coindesk.com/business/2022/09/12/starbucks-to-offer-nft-based-loyalty-program-alongside-polygon/

Hanlon, A. (2020). Digital Marketing: Strategic Planning & Integration. Sage Publications.

Starbucks (2022, September 12). Starbucks Brewing Revolutionary Web3 Experience for its Starbucks Rewards Members. https://stories.starbucks.com/press/2022/starbucks-brewing-revolutionary-web3-experience-for-its-starbucks-rewards-members/

Thompson, J.  (2022, September 13). Starbucks unveils NFT rewards program to appeal to Gen Z customers. Bizwoman. https://www.bizjournals.com/twincities/bizwomen