Starbucks has one of the largest and most successful customer loyalty programs on the planet, driving around 50% of its business. The latest strategy is to expand customer engagement with NFTs directly into the Rewards program.
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Starbucks' Reward program demonstrates the power of customer loyalty
Starbucksā Reward program is arguably the most successful loyalty program in the world, with almost 30 million US customers and nearly 60 million Rewards customers globally. The loyalty program drives approximately 50% of all Starbucks revenue through incentivising repeat business, upselling, and customer personalisation.
In December 2022, Starbucks announced they were taking the loyalty program one stage further with Starbucks Odyssey, the retail brandās new blockchain-based NFT reward program.
Starbuck's explain it as:
"...the opportunity to earn and purchase digital collectible assets (NFTs) that will unlock access to new benefits and immersive coffee experiences."
The thing is that this is a bold move by a consumer brand with a lot to lose if the NFT experiment goes wrong. Remember, NFTs are still in the nascent stage of their evolution, and the Odyssey beta, which is serving as a testing ground for the brand, highlights both the challenges and opportunities of being a first mover.
To be clear, Starbucks Odyssey is adding to, not replacing, their loyalty programme, thatās not going anywhere!
Starbucks Odyssey is using NFTs to gamify the customer experience
Here's how it works. The customer links their Rewards account to Starbucks Odyssey and chose their avatar (which represents them in the digital experiences.) Now, the user can began to work their way through a collection of "tasks" which are called āJourneys.ā A neat branding trick from Starbucks is to link each Journey to a different element of the Starbucks ethos. For example, the user could complete a virtually tour of a Costa Rican coffee farm or pass a quiz about Starbucks history.
As the user goes through the Journey, they earn points and NFTs called āstamps,ā which can be bought and sold on the Odyssey marketplace. These points and stamps will be used to unlock exclusive benefits and experiences when the Odyssey beta trial goes into full blown production. Starbucks are promising experiences such as virtual espresso martini-making classes, invites to exclusive physical events, or even expense-paid trips.
At the end of January 2023, Starbucks had built four Journeys into Odyssey, focusing on brand history, sustainability efforts, coffee production, and the holiday season. Clicking on one of the four Journeys takes the customer to a webpage containing videos, quizzes, or games.
Starbucks has also built a simplistic homepage (featuring the customer's chosen avatar as a header) with a dashboard of Journeys, stamps and points. , and a link to the stamp marketplace.
Why are Starbucks introducing NFTs to the Reward Program?
The consumer brand says itās looking for ways to ārecognise, surprise, and delightā its Rewards members. And it makes sense for Starbucks to test out the nascent technologies of NFTs and blockchain because their largest customer segment is millennials. That's consumers between the ages of 25 to 40 comprising around 50% of the companyās business, with young adults ages 18 to 24 just behind.
Hereās The Thing: NFTs appeal to and are better understood by these two youngest demographics. Gen Z has the most investment experience and general interest in NFTs, followed closely by millennials.
Starbucks Odyssey is about more than just NFTs, it's also about Community
At the core of the Odyssey beta lies a vibrant online community - the Starbucks community server on chat app Discord. Here, Starbucks fans, Web3 enthusiasts, and beta users come together to discuss their Odyssey experience, flag bugs or issues, ask questions, attend virtual events, and even plan in-person meetups. Uniquely, the server is a space in which Starbucks has successfully brought coffee lovers and Web3 experts together. This has enabled the brand to increase awareness and gain valuable feedback from users, which has been essential in the Odyssey beta's development.
Peg Samuel, a Web3 strategist at MetaJuice and an Odyssey beta user, commented on the value of the discord server, noting that the Odyssey experience was made richer by the presence of both coffee lovers and Web3 experts in one space.
The Odyssey beta Discord server is a great example of how two distinct groups of people can come together to create a meaningful experience, benefitting both the brand and the users.
User experience is key to Starbucks' success
The key to Starbucksā success is going be how they bridge the gap between the unfamiliarity with new technologies and all its jargon. This is where the role of Ā Journeys come in because they're hiding the jargon of the underlying technology from customers. For example, the digital collectibles earnt through the loyalty program are called "stamps" when they are, in fact, NFTs.
By collecting the stamps, aka non-fungible tokens, members gain points that can unlock exclusive benefits. These perks go beyond those you can earn with a traditional Starbucks Rewards account.
The NFT program is about more than just Free Coffee
Today, members earn things like free coffee, free food or merchandise. However, the points earned in Starbucks Odyssey will translate into experiences and other benefits that go way beyond a free cup of coffee.
From a virtual espresso martini-making class or access to unique merchandise and artist collaborations. As members gain more points, they can earn invites to special events hosted at Starbucks Reserve Roasteries, or even earn a trip to the Starbucks Hacienda Alsacia coffee farm in Costa Rica.
Itās expected the very largest perks will be reserved for those who purchase NFTs, though lesser versions may be offered to those who earn their way up.
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Brand Strategy Collection
Brand Strategies for the Metaverse is a unique collection of over 250 consumer brands and their strategies in the emerging technologies of Web3 and the Metaverse. I have tracked, traced, analysed and assessed 250 consumer brands and their projects, initiatives and use-cases in AI, VR/AR/MR, NFTs, blockchain and crypto.
From Adidas to Zara, from Web3 to the Metaverse, this is a comprehensive collection of consumer brands including:
Adidas, AIA Insurance, Alfa Romeo, Asics, Aston Martin, Atari, Audi, Bacardi, Bentley, Bose, Boss, Budweiser, Burberry, Cadbury, Campbell Soup, Carrefour, Champion, Chevrolet, Chipolte, Coca-Cola, DBS Bank, Decathlon, Dior, Disney, Dolce&Gabbana, eBay, Emirates, Evian, Ferrari, Ford, Gap, Gibson, Glenfiddich, Gucci, Heineken, Hennessy, HTC, Hyundai, JBL, Johnnie Walker, Kellogg's, Kia, Kraft Heinz, L'Oreal, Lacoste, Lamborghini, Lavazza, ...
BONUS: The Brand Strategy Collection also lists over 30 celebrities and 20 locations who have adopted these emerging technologies to promote their own brands.
Further Reading
Ezra Reguerra
Aaron Baar
Rick Huckstep
Rick Huckstep
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