Just as Starbucks used rewards as an incentive to develop its widely used mobile payments app 13 years ago, it's following a similar formula to bring its customers into the metaverse with its own NFT program.
Starbucks Odyssey, launching later this year, will enable Starbucks Rewards members to earn, buy and sell limited-edition coffee-themed NFTs, becoming one first large companies to link blockchain-based digital assets to an existing loyalty program.
The program also marks one of the first NFT programs where users can buy NFTs with a credit card, bypassing the need to acquire cryptocurrency or a crypto wallet. This simplifies the Web3 learning curve for the one in 10 U.S. adults who are enrolled in the Starbucks Rewards program.
"Customers will not even understand that they are working on the blockchain or with NFTs," said Brady Brewer, Starbucks' chief marketing officer, when introducing the program at a Starbucks investor presentation on Tuesday.
Describing the program as a way for Starbucks customers to "own their loyalty with Starbucks," Brady said customers must log in to the rewards program to access Web3-enabled experiences including quizzes, games and challenges to earn digital collectible stamps. Users can buy and sell these stamps within the Starbucks Odyssey virtual marketplace.
Starbucks said its NFTs will use Polygon blockchain technology to secure users' ownership of stamps, which users can acquire to generate more Starbucks Rewards points redeemable for benefits including unique merchandise and invitations to exclusive Starbucks events. One prize is a trip to Starbucks' coffee farm in Costa Rica.
Starbucks did not say when the NFT program will launch. The company also plans to make it available in China as early as next year.
Starbucks is also planning to extend its rewards program to other companies. Next month, Starbucks will announce its first corporate rewards partner, enabling consumers to sign up for Starbucks Rewards and earn rewards through other companies' mobile apps. Starbucks' loyalty program has 58 million members globally and 27 million in the U.S., up 13% over a year ago, Starbucks said.
With more than 25% of Starbucks customers now making purchases with mobile ordering, the company also plans to extend its mobile ordering capabilities to licensed operations not directly owned by Starbucks. This ew system will be called Starbucks Connect.
Non-fungible tokens are taking the digital world by storm. They could displace traditional payment rails, but they could also be a handy tool for cybercrooks.
The coffee company will also enable customers to give baristas tips directly from a credit or debit card, providing an option in addition to the current tipping feature built into the mobile app.
On Monday, Starbucks will roll out a My Starbucks Savings with Fidelity Program, encouraging employees to save by routing a recurring portion of their after-tax pay to a personal savings account. Starbucks will contribute matching credits at milestones up to $250.
CEO Howard Schultz, who stepped into the post in April when former chief Kevin Johnson stepped down, also said he will work closely over the next seven months with incoming CEO Laxman Narasimhan, currently CEO of U.K.-based Reckitt Benckiser, before handing over the reins.
