Despite a recent rise in popularity, Web3 is still far behind Web2 in broad use, and the sector still has a long way to go before it can match current systems. Starbucks Odyssey, a new NFT-based rewards program, may enable or inspire this.
If a corporation wants to plunge into Web3, it can be hard to know where to start. Protocols, wallets, and exchanges are young relative to financial systems. More token types appear daily. Web3 still lags behind Web2 in broad use, despite recent growth. The industry is far from matching current systems’ capabilities, especially for consumer purchases in industrialized economies with stable currencies. How long till buying coffee with cryptocurrency is fun rather than a gimmick? Bring Starbucks. Starbucks Odyssey, a new NFT-based rewards program, may make this possible or at least give us some ideas.
Early indicators of clever design
Recent statements indicate that the effort is still in planning, and details have not been released. Based on what we know, Starbucks has made several good Web3 decisions that can inspire other corporations.
Starbucks Odyssey supplements, not replaces. Starbucks’ rewards program has about 60 million members, including 30 million in the US, making it the world’s most successful. They earns roughly 50% of its revenue from repeat customers, upselling, and personalization.
Given the recent development of the technology and the doubtful viability of an NFT-based program, Starbucks would be taking a big risk by replacing its hugely successful traditional rewards program with a Web3-based one. By making Starbucks Odyssey an optional, supplemental rewards program, Starbucks may add complementary products while avoiding risk to the cash cow. This gives the organization more flexibility if Web3 technology changes.
Second, the program naturally attracts key groups. 50% of Starbucks’ customers are 25–40-year-old millennials, followed by 18–24-year-olds. As Starbucks grows and faces labor issues, supply chain expenses, and staff shortages, this client base will become increasingly important.
This user base likes NFTs despite their newness. Generation Z has the most financial expertise and NFT excitement. Starbucks’ primary customer groups are encouraged by the second-largest NFT investor group, millennials.
Third, Starbucks appears to be using top-tier UI/UX design to bridge the gap between beginners and NFT/blockchain consumers. Starbucks’ mobile order and pay is successful because of its seamless UI/UX design.
Starbucks is developing Odyssey incentives with Forum3, led by co-founder Adam Brotman. Before creating Starbucks’ mobile order and pay system, Brotman was its chief digital officer. He co-founded Web3 loyalty. Starbucks Odyssey may strive to replicate customers’ seamless experience.
Ironically, this may necessitate temporarily hiding Web3’s unique characteristics. Brady Brewer, executive vice president and chief marketing officer, said, “It happens to be built on blockchain and Web3 technologies, but, to be honest, the customer – to be honest – may very well not even know that what they’re doing is interacting with blockchain technology.”
Advancing past marketing
Starbucks Odyssey seems like a promising Web3 application for today. However, optimizing Web3 requires difficult design decisions. Our predictions include:
Managing rumors: Starbucks said that NFT owners could trade them in P2P exchanges. As the game industry has learnt, speculators in peer-to-peer NFT trading negatively damage organic consumers’ experiences. Starbucks must build markets and other methods to reduce speculation and maintain the rewards program’s incentives.
Web3 technology, especially blockchain, gives customers better asset control. The Odyssey design intentionally prevents human interaction with the underlying technology, which is necessary to fully appreciate these advantages. Starbucks’ response to self-custody requests and if customers want them are unknown.
Starbucks will gain PR by developing in-demand NFTs and being profitable as a Web3 leader. Free NFTs also please consumers. Starbucks will want to succeed beyond marketing expenditures and generate direct and indirect revenue.
The market has shown that buyers don’t always want to pay for NFTs. Starbucks must create compelling digital rewards, especially for Gen Z, to construct a successful rewards program and generate recurring revenue. One or both of these goals must be satisfied to ensure that this program lasts longer than the next hot technology.
Starbucks Odyssey will be a fascinating and educational corporate Web3 test case, regardless of how Starbucks can handle these issues. Most intriguingly, it tests Web3’s adoption and limits. With the most consumer-focused firm in charge, will Starbucks eventually mainstream Web3?