Starbucks Rewards members will be able to earn and purchase collectable digital stamps, then buy and sell them in a marketplace with other members of the loyalty program, through an upcoming initiative unveiled Monday morning.
Known as Starbucks Odyssey, this is the coffee-giant’s long-anticipated move into the field commonly known as Web3. The stamps will be non-fungible tokens (NFTs). Blockchain technology will authenticate each token and track its ownership as it changes hands in the company’s digital marketplace.
Starbucks says the Odyssey stamps will unlock benefits and experiences, with point values based on the rarity of each stamp. The company cited examples such as access to limited-edition merchandise, an invitation to a virtual espresso martini-making class, or a trip to the Starbucks Hacienda Alsacia farm in Costa Rica.
Arriving more than year after the peak of the NFT craze, it might be tempting to dismiss Starbucks as late to the party. But Brady Brewer, Starbucks’ chief marketing officer, says the company believes it will benefit from being “strategically patient” and thoughtful in its approach.
“As many brands just jumped right in, we saw a longer-term potential for this technology rather than a one-off,” Brewer said in an interview in advance of the Odyssey announcement. “We were thinking, how can it augment not just our customer experience but our core business, rather than something that would be on the side.”
Starbucks Rewards members won’t need to know anything about NFTs or blockchain, own a crypto wallet, or trade in cryptocurrency to participate in the program. They will be able to take part in interactive games or other challenges to earn stamps. They will also be able to purchase stamps with their credit cards.
It’s part of a larger effort by the company to extend the concept of the “Third Place,” a destination apart from home and work, into the digital world. Starbucks believes it will be unique among major brands in rolling out Web3 technologies, at a large scale, as an extension of its existing loyalty rewards program.
“In a lot of ways, I think this will usher in a next-generation loyalty model for brands,” Brewer said. “We’re really trying to push the edges of what’s possible here and connect it to our core experience in our core business.”
The company has a history of rolling out new technologies, such as Mobile Order & Pay, that popularize new approaches and end up being followed by other retailers in different sectors.
Starbucks first hinted at the NFT plan in May. The company is formally announcing Starbucks Odyssey and launching a waitlist on Monday for Starbucks Rewards members to be among the first to be granted access later this year.
The company says its employees (“partners,” in Starbucks’ lingo) will be prioritized in the waitlist, giving them a chance to help build and participate in the community.
It comes at a tumultuous time in the company’s relationship with its employees, as baristas at some Starbucks locations push to unionize. While employees who host online learning sessions, for example, would be on the clock, participation in the Odyssey community would be “more for fun and engagement,” Brewer said.
Starbucks says the stamps will feature “iconic Starbucks artwork” made by employees and outside artists. The company did not make examples available in advance of the announcement Monday morning.
Members tell the company that they want to be more recognized and rewarded for their loyalty, Brewer said. By increasing their engagement with the company, and boosting their knowledge of coffee, the idea is that the new program would ultimately help Starbucks’ business, as well.
The company reported 27.4 million Starbucks Rewards members, up 13% year-over-year, as of the end of its fiscal third quarter, ended July 3. Starbucks Rewards members were responsible for a record 53% of revenue in U.S. company-operated stores in the quarter, interim CEO Howard Schultz said on a conference call.
The initiative also includes a charity element, with a portion of the proceeds from the sale of limited-edition stamps going to philanthropic causes supported by employees and members. The company says it’s using blockchain technology from Polygon that uses less energy than prior generations of the technology.
Starbucks is expected to discuss Odyssey as part of its 2022 Investor Day tomorrow.
The company recently named its next CEO, Laxman Narasimhan, who will join the company Oct. 1, after relocating from London to the Seattle area. Narasimhan will serve as incoming CEO until April 1, 2023. Until then, Schultz will remain interim CEO, a position he has held since Kevin Johnson stepped down in March.
