Reasons behind Starbucks' move to Web3 rewards

In the highly competitive marketing environment the most accessible customer acquisition channels are getting quickly saturated and often produce a CAC that makes it difficult to scale the campaigns with a reasonable unit economics. At the same time, brands who constantly experiment and innovate new, modern and creative ways to attract and retain customers put themselves ahead of competition.

Starbucks, for instance, is the company that has been creating new growth opportunities utilising emerging technologies: a digital wallet, pre-ordering and a pay-to-earn loyalty program are just a few examples of what the brand has successfully implemented.

Just recently Starbucks has introduced a Web3 extension to the existing reward program, a move intended to attract and retain younger customers by giving them new incentives to more actively interact with the brand. The program is called Odyssey and is planned to be rolled out in the US by the end of 2022.

“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,” Starbucks founder and now interim CEO Howard Schultz said

The Web3 and blockchain technologies are hot topics among the younger customers: since the inception of the blockchain movement in 2014 there've been already created over 80m wallets and over 90% of the users represent Millennials and the members of Gen Z. Apparently Starbucks noticed the trend and decided to implement Web3 into own technology stack to create a unique offering and stand out of the crowd.

Number of created blockchain wallets, mln Source: Statista

​Blockchain users split by generation, % Source: Stilt

With an NFT-powered engagement program Starbucks could have the opportunity to create more personalised and segmented experiences for its customers by giving them branded NFTs that:

• open access to unique perks and experiences available only for NFT holders;

• have a monetary value and grow in price;

• can be sold on a marketplace (brands earn royalties at such transactions);

• can be shown on social media to prove their status officially recognised by the brand.

We described the specifics of the Web3 / NFT-based loyalty programs in more detail in this post.

If you are a brand looking to expand and better retain your younger customer base, this is the time to act. By using a tokenized loyalty platform, you can offer your users a unique and desired experience that almost nobody in the market is offering.

Indigo NFT offers a flexible toolset and services to launch and manage a Web3 /NFT-powered customer engagement platform for brands across different industries. Feel free to book a call with us to learn more about how we can take your loyalty program to the next level and help you to stand out of the crowd.

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