Starbucks to unveil its web3-based rewards program – TechCrunch

Starbucks will unveil its web3 initiative, which includes coffee-themed NFTs, at next month’s Investor Day event. The company earlier this year announced its plans to enter the web3 space, noting its NFTs wouldn’t just serve as digital collectibles, but would provide their owners with access to exclusive content and other perks.

At the time, Starbucks was light on details as to what its debut set of NFTs would look like, what specific features they’d provide, or even what blockchain it was building on. It said the plan was likely to be multi-chain or chain-agnostic, hinting at plans that weren’t yet finalized.

The overall tone of the coffee retailer’s web3 news was very high. They explained that they believed digital collectibles would create an accretive store business and that more information would be released in 2022.

Starbucks appears to be taking a different approach than other companies who jumped on the NFT bandwagon, without really considering how their investments would tie in with their larger business goals. It views collectibles in a way that extends customer loyalty. In fact, the company even brought in Adam Brotman, the architect of its Mobile Order & Pay system and the Starbucks app, to help serve as a special advisor on the project.

Mobile Order & Pay has been one of Starbucks’ biggest successes, in terms of tech innovations. Starbucks was the first company to offer a digital wallet before Apple Pay. In the past quarter — Starbucks’ fiscal Q3 — mobile orders, delivery and drive-through combined drove 72% of Starbucks’ U.S. revenue. Due to Covid-driven changes, the company’s mobile ordering mix increased by 47% year-over-year. This is an increase of 13%. said.

Starbucks founder interim CEO Howard Schultz, who returned to the company in April, teased its forthcoming web3 initiative during this week’s earnings call with investors.

“We have been working on a very exciting new digital initiative that builds on our existing industry-leading digital platform in innovative new ways all centered around coffee and most importantly, loyalty, that we will reveal at Investor Day,” Schultz said.

The company had previously announced its plans Seattle will host the 2022 Investor Day on September 13, 2022.

Schultz continued, “we believe this new digital web3-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, expanding our digital third place community, and offering a broader set of rewards, including one-of-a-kind experiences that you can’t get anywhere else, integrating our digital Starbucks Rewards ecosystem with Starbucks-branded digital collectibles as both a reward and a community building element.

“This 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,” he added.

Though the details aren’t yet fleshed out, the approach here sounds potentially interesting. The company hadn’t before clarified that the NFTs would be tied directly to Starbucks Rewards.

Customers can earn Stars with us right now purchases in the app or at Starbucks stores which can then translate into tangible rewards — like free drinks. The new NFTs will be integrated into the loyalty program. If customers were to “earn” the collectibles through everyday purchases, perhaps, that could onboard more people to the web3 ecosystem. This is one of many challenges facing the digital space today. Digital art and collectibles can be expensive and come with high fees. What’s more, the digital program could give customers a reason to care about NFTs, if the rewards and “one-of-a-kind” experiences end up being something actually worth earning. This remains to be determined.

However, there are signs that consumers want to find easier ways to get into the web3 space. For example, the crypto rewards app Sweatcoin has become a breakout hit thanks to how it rewards users with “Sweatcoins” for every 1,000 steps they walk. This quarter, the app was No. 4. 6 by Monthly Active Users on data.ai’s list of “Top Breakout Apps” — meaning, those that saw the largest absolute growth in downloads in the quarter. There’s also now a good handful of games offering play-to-earn modelsThey are designed to connect gaming activities to NFTs or cryptocurrencies. This idea has been met with mixed success, as some gamers have resisted it.

Schultz also highlighted the importance of catering for the younger customer during the call. Though his comments were more of a reflection of Gen Z’s demand for Starbucks’ cold drinks and iced shaken espresso — which drove sales in the quarter — a web3-based loyalty program could serve as another way to attract younger consumers to the brand.

“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,” Schultz said, before touting that the company has “never been, in our history, more relevant than we are today to Gen Z.”

“To me, that cohort is so powerful, and the attachment rate that we have with them and the loyalty is just building,” he added.

Starbucks posted strong earnings in the quarter, beating Wall Street’s expectations despite the economic challenges. The company reported revenue of $8.15 trillion, compared to $8.11 expected. Earnings per share were 84cs adjusted, compared with 75cs expected.