In an innovative leap into the digital age, Starbucks has introduced a Web3 loyalty program, dubbed “Starbucks Odyssey,” which has already made a substantial financial impact.
Here’s how they’ve managed to turn coffee into collectibles living on the blockchain:
How Starbucks Odyssey Works
Starbucks Odyssey isn’t just another loyalty program; it’s an interactive, gamified experience where users can collect what Starbucks calls “stamps” by engaging in what they term “journeys.”
These stamps are essentially NFTs (Non-Fungible Tokens), and as users collect them, they unlock rewards. Launched in December 2022, the program is still in its beta phase but has already attracted around 35,000 members.
This might seem a small number next to Starbucks’ 75 million Rewards members, representing just 0.04% of the total, yet the financial returns are telling.
Financial Performance
In its inaugural year, Starbucks Odyssey generated over 1 million dollars:
- Direct Sales: Revenue was driven by selling limited edition stamps.
- Secondary Market Royalties: A 7.5% fee was applied to trades made on secondary markets.
With these numbers from a mere fraction of their customer base, the potential for growth is enormous:
- If 1% of Starbucks Rewards members participated, the program could generate an estimated 26 million dollars annually.
- At 5% participation, this figure jumps to 130 million dollars.
- And with 10% of members engaged, Starbucks could see 240 million dollars in yearly revenue from Odyssey alone.
This would account for nearly 0.7% of Starbucks’ total 2023 revenue, showcasing the program’s significant potential within their broader business model.
User Engagement
Starbucks’ traditional Rewards members are already 5.6 times more likely to visit daily than non-members.
If Odyssey members are even more engaged, as anticipated, this loyalty program could redefine customer interactions with the brand.
Starbucks’ Vision for Web3
Starbucks sees NFTs and Web3 technology not just as a novelty but as a cornerstone for future customer engagement strategies. They’ve articulated their view:
“We believe NFTs have broad potential to create an expanded, shared-ownership model for loyalty, offering unique experiences, community building, storytelling, and customer engagement.”
This approach isn’t just about transactions; it’s about creating a community, sharing experiences, and deepening the relationship between Starbucks and its patrons.
End of the loyalty program
The beta phase of Starbucks Odyssey was officially concluded on March 31, 2024, leaving many in the community feeling both disappointed and confused.
Despite its innovative approach, Starbucks decided to pull the plug on this digital venture. The closure announcement, while surprising, left room for speculation about potential future developments, stating that the beta had to end to “prepare for what comes next.”
Community Reaction:
Participants of the program were not just collectors of digital assets; they had formed a community, sharing their passion for Starbucks and the novel concept of earning NFTs.
The end of Odyssey meant more than just stopping a program; it signified the disbanding of a unique community built around digital and real-world Starbucks experiences.
Users felt let down, not only by the cessation but by what they perceived as a lack of clarity from Starbucks on the loyalty program’s future.
“Odyssey connected us together that is one part that the regular rewards program was not as good at.”
“I’m feeling a little better today, but I’m still so upset. Seems like a lot of people are speculating the “New” Odyssey to come will be stripped of its web3 elements.”
“They could have planned a better exit for us. The superfans and users. They built up our love, loyalty and we built this community. Now they’re ripping it away from us. I’m pissed and I’ve never felt this bitter towards a brand I loved.”
“It blows my mind that brands still look at Web3 as a marketing channel to explore and then shut down like it’s just a campaign ending.”
“SB thinks in tech terms and calls this project “beta”. And this is a big mistake. It actually involved real people spending real money. SB simply gathered its most loyal fans and made them hostage to its incompetence. Feedback was a complete failure.”
Starbucks’ Next Steps:
Starbucks’ official FAQ suggested that this isn’t the end, but rather a pause for reflection and perhaps reinvention.
The company could be contemplating how to reintroduce the concept in a form that’s more aligned with consumer habits or perhaps integrating it more seamlessly into the existing Starbucks Rewards program.
