Why Starbucks Launched Another 5,000 NFTs Today
By Anushree Dave
Brands are still embracing NFTs, even if the hype around them has died down
On Wednesday, Starbucks (SBUX), the famous coffee chain, issued 5,000 non-fungible tokens, called The First Store Collection. It is a series of images that look like postage stamps. The company launched them on Nifty Gateway, an online platform for digital art, and minted them on the Ethereum scaling network Polygon.
The non-fungible tokens are priced at $100 each. This is roughly the same price as the previous NFT drop in March which only offered 2000 NFTs and sold out within minutes.
Purchasing an NFT also earns users 1,500 points toward rewards in the Starbucks Odyssey app, which was launched by Starbucks in Fall 2022.
Wider interest in collecting, trading and creating NFTs appears to have died down since the peak in 2021 and 2022, but major brands are still moving forward with plans to launch them. Earlier this week, Nike ( NKE ) announced it was launching its first NFT drop on .Swoosh, the brand’s Web3 community branded as a place to create “the future of Nike” with fans.
One of the reasons brands are pushing forward to launch NFTs is because it seems to work for their bottom line.
“Starbucks is venturing into web3 technology because they recognize its potential and want to tap into new user segments and revenue streams. Their first NFT release, The Siren Collection Stamp, launched on March 1, 2023, sold out in just 18 minutes at a price of $100 each,” said Sara Gherghelas, a blockchain analyst at DappRadar.
“In the last 30 days, it has had a trading volume of $195,000 and a total trading volume of $561,000. The floor price for the collection is $450, which is a 350% appreciation since mint.”
Gherghelas said that it is noteworthy that only 17.1% of the collection is currently for sale, indicating that token holders are not simply looking to flip the collection, or buy with the aim of selling at a higher price.
“Regarding the upcoming second drop, it is expected to have a similar impact, especially as they are also rolling out a number of benefits to beta users on April 24,” Gherghelas said.
Brands use NFTs, which act as a certificate of authenticity as well as a collectible, as a way to build loyalty with their fan bases.
In December, Starbucks CMO Brady Brewer said the company is using this type of technology to reward and connect with members in new ways, including offering collectibles, digital stamps, providing access to benefits and forming a digital community around the brand.
The market for NFTs has generally slowed, with trading volume approaching $1 billion and 2.96 million in sales, DappRadar shared. This is far from the high of $17 billion in January 2022.
Starbucks told MarketWatch in an email that it would provide data on the launch after it was collected.
-Anushree Dave
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04-20-23 1214ET
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