Is Starbucks launching an NFT programme?
Byline: Hannah Parker
Despite the ongoing bear market, we have seen many significant partnerships between the crypto industry and various other major industries such as the sports and fashion industry. A big trend we are currently seeing is the integration of non-fungible tokens (NFTs) into these and other industries.
Recently we’ve seen crypto exchange giant, Binance collaborate with Società Sportiva Lazio to launch non-fungible token (NFT) tickets for all of the sports club’s home matches at Stadio Olimpico. This is just one example of sports teams integrating NFTs into their ticketing systems – something that is growing in popularity amongst major sports globally. We’ve also seen designer fashion brand, Philipp Plein launch a concept store in London where consumers are offered NFTs representing the real-world items that they purchase in-store. The latest NFT endeavour involves international coffee giant, Starbucks.
Starbucks is the world’s largest coffeehouse chain and is worth approximately $98.65 billion. The coffeehouse giant has recently teased a Web3 rewards program to attract new customers to its existing customer base. Interim CEO, Howard Schultz has said that this venture will “create an entirely new set of digital network effects that will attract new customers and be accretive to existing customers in our core retail stores”. Starbucks is looking to launch a new Web3 rewards program to attract new customers and retain current customers, according to Schultz. Starbucks had initially announced its plans to hop on the NFT trend at the beginning of 2022 when Schultz noted that “sometime before the end of the calendar year, we are going to be in the NFT business”.
Speaking during Starbucks’ fiscal Q3 revenue call, Schultz confirmed that Starbucks will soon reveal a new Web3 “digital initiative” that will expand upon the company’s current loyalty program. He expressed that “this new digital Web 3-enabled initiative will allow us to build on the current Starbucks Rewards engagement model with its powerful spend-to-earn Stars approach while also introducing new methods of emotionally engaging customers”. While the CEO remained vague about the specifics of the company’s plans, he did briefly mention during the call that Starbucks is looking to integrate its digital Starbucks Rewards ecosystem with Starbucks-branded digital collectables as both a reward and a community-building element. The full reveal of this NFT venture is set to occur during the company’s Investor Day in September 2022. Schultz also explained that the Web3 move is part of a push to attract and retain the younger percentage of Starbucks’ customer base. He expressed that “we don’t want to be in a business where our customer base is aging and we have a less relevant situation with younger people,” adding that the company has “never been, in our history, more relevant than we are today to Gen Z”.
The interim CEO also explains that this venture “will create an entirely new set of digital network effects that will attract new customers and be accretive to existing customers in our core retail stores”.The company’s quarterly results have reportedly exceeded analyst estimates, with a 9% quarter-over-quarter bump in global revenue to a record $8.2 billion.
While they may be the first, Starbucks may not be the only major brand to launch a Web3 loyalty program in the near future. Recently, business-to-business blockchain startup, Hang raised $16 million in Series A funding led by investment firm, Paradigm. Hang is looking to help brands transition their current membership and loyalty programs over to blockchain and incorporate NFTs. Some major automated cryptocurrency platforms like Bitindex AI have expressed interest in developing loyalty programmers too.
With market leaders like Starbucks incorporating NFTs into its loyalty program, it’s only a matter of time before more companies integrate the crypto industry into their own industry, driving crypto adoption rates across the globe.