Starbucks Rewards members will be able to earn and buy collectible digital stamps, then buy and sell them on a marketplace with other members of the loyalty program, through an upcoming initiative unveiled Monday morning.
Known as the Starbucks Odyssey, this is the coffee giant’s long-awaited move into the field known as Web3. The stamps will be non-fungible tokens (NFT). Blockchain technology will authenticate each token and track its ownership as it changes hands on the company’s digital marketplace.
Starbucks says the Odyssey stamps will unlock perks and experiences, with point values based on the rarity of each stamp. The company cited examples such as access to limited edition items, an invitation to a virtual espresso-martini course or a trip to the Starbucks Hacienda Alsacia farm in Costa Rica.
Arriving more than years after the peak of NFT craze, it can be tempting to dismiss Starbucks as late to the party. But Brady Brewer, chief marketing officer at Starbucks, says the company believes it will benefit from being “strategically patient” and thoughtful in its approach.
“Since a lot of brands just jumped right in, we saw a long-term potential for this technology rather than a one-off,” Brewer said in an interview ahead of the Odyssey announcement. “We thought, how can that improve not only our customer experience, but our core business, rather than something that would be on the side.”
Starbucks Rewards members do not need to know anything about NFTs or blockchains, own a crypto wallet or trade cryptocurrency to participate in the program. They will be able to participate in interactive games or other challenges to earn stamps. They will also be able to buy 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 scale, as an extension of its existing loyalty rewards program.
“In many ways, I think this will usher in a next-generation brand loyalty model,” Brewer said. “We’re really trying to push the edges of what’s possible here and connect that 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 waiting list on Monday for Starbucks Rewards members to be among the first to gain access later this year.
The company says its employees (“partners” in Starbucks parlance) will be prioritized on the waiting list, giving them a chance to help build and participate in the community.
It comes at a turbulent time in the company’s relationship with its employees, as baristas at some Starbucks locations push for unionization. While employees hosting online learning sessions, for example, will be on the clock, participation in the Odyssey community will be “more for fun and engagement,” Brewer said.
Starbucks says the stamps will feature “iconic Starbucks artwork” created by employees and outside artists. The company did not make samples available ahead of Monday morning’s announcement.
Members tell the company they want to be more recognized and rewarded for their loyalty, Brewer said. By increasing their engagement with the company, and increasing their knowledge of coffee, the idea is that the new program will ultimately help Starbucks’ business as well.
The company reported 27.4 million Starbucks Rewards members, up 13% year-over-year, at the end of the third quarter, which ended July 3. Starbucks Rewards members were responsible for a record 53% of revenue at 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 staff and members. The company says it uses blockchain technology from Polygon that uses less energy than previous 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 on October 1, after relocating from London to the Seattle area. Narasimhan will serve as interim CEO until April 1, 2023. Until then, Schultz will remain interim CEO, a position he has held since Kevin Johnson stepped down in March.
