Starbucks will unveil its Web3 initiative, which includes coffee-themed NFTs, at next month’s Investor Day event. The company announced its plans to enter the Web3 space earlier this year, noting that its NFTs will not only serve as digital collectibles, but give their owners access to exclusive content and other perks.
At the time, Starbucks was light on details of what its first set of NFTs would look like, what specific features they would provide, or even what blockchain it was building. It said the plan is likely to be multi-series or series-agnostic, pointing to plans that were not yet finalized.
Overall, the coffee retailer held its Web3 news fairly high, explaining simply that it believes the digital collectibles may make a sudden business adjustment to its stores and that more will be revealed later in 2022.
Where some companies jumped on the NFT bandwagon without thinking much about how their investments would fit in with their larger business goals, Starbucks is attempting a different approach. It views collectibles as an extension of customer loyalty. In fact, the company even brought on Adam Brotman, the architect for its mobile order and pay system and Starbucks app, to help serve as a featured consultant on the project.
Mobile order and pay has been one of Starbucks’ biggest successes in terms of technological innovations. Even before Apple Pay became ubiquitous, the company was the first to introduce the concept of a digital wallet. In the last quarter — Starbucks’ fiscal Q3 — mobile orders, delivery and drive-thru combined accounted for 72% of Starbucks’ US revenue. In addition, following the Covid-driven changes in consumer behavior, the mobile ordering sales mix grew 13% year-on-year to a record high of 47%, the company said.
Starbucks founder and interim CEO Howard Schultz, who returned to the company in April, teased his upcoming Web3 initiative during this week’s earnings call with investors.
“We are working on a very exciting new digital initiative that builds on our existing industry-leading digital platform in innovative new ways that are all focused on coffee and most importantly, loyalty, which we will reveal at Investor Day,” Schultz said.
the company had first announced its plans To host its 2022 Investor Day in Seattle on September 13, 2022.
Schultz continued, “We believe this new digital Web3-enabled initiative will allow us to build on the existing Starbucks Rewards engagement model with our powerful spend to earn Starbucks, as well as create new opportunities for emotionally engaging customers. We will also introduce new ways, expand our digital third-place community, and deliver a comprehensive set of rewards, including one-of-a-kind experiences you can’t find anywhere else, to our digital Starbucks rewards ecosystem. Integrates with Starbucks-branded digital collectibles as both a reward and community building element.
“This digital network will create an entirely new set of effects that will attract new customers and adapt to existing customers in our core retail stores,” he added.
Although the details have yet to be revealed, the approach here looks potentially interesting. The company had previously not clarified whether the NFTs would be linked directly to Starbucks Rewards.
Currently, customers earn stars with In-app purchases or at Starbucks stores Which can then translate into tangible rewards – like free drinks. It appears that the new NFTs will now somehow be included in the part of this loyalty program. If customers “earn” collectibles through everyday purchases, perhaps, it could involve more people in the Web3 ecosystem. This is one of the challenges facing the space today, where the purchase of digital art and collectibles is often accompanied by high costs and large fees. In addition, the digital program can give customers a reason to care about NFTs, if the rewards and “one-of-a-kind” experience are actually something worth earning. (Of course, that remains to be seen.)
However, there are some indications that consumers may be interested in easier ways to enter the Web3 space. For example, crypto rewards app Sweatcoin has become a breakout hit, thanks to which it rewards users with “Sweatcoins” for every 1,000 steps they take. Last quarter the app was No. 4 in global downloads and No. 6 by monthly active users On data.ai’s list of “Top Breakout Apps” – Meaning, those who saw the biggest absolute increase in downloads in the quarter. Now a handful of games are also available model earning to play, which aims to link a fun activity like gaming with cryptocurrencies or NFTs. These have had more mixed success as some gamers are opposing the idea.
During the call, Schultz also emphasized the value of catering to the young consumer. While his comments were intended more as a reflection of Gen Z’s demand for Starbucks’ cold drinks and iced shaken espresso — which drove sales in the quarter — a Web 3-based loyalty program was another way to attract younger consumers to the brand. method can work.
“We don’t want to be in a business where our customer base is aging and we have a less relevant position with younger people,” Schultz said, adding that the company, “has never been more relevant in our history than we are.” Today is for Gen Z.”
“To me, that group is so powerful, and the attachment rate that we have and the loyalty is just building up,” he said.
starbucks Strong earnings in the quarter, beating Wall Street’s expectations despite economic challenges. The company reported revenue of $8.15 billion versus expected $8.11, and adjusted earnings per share of 84 cents compared to expected 75 cents.