Starbucks NFT Loyalty Program Leads The Way For Other Brands

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The next big thing in NFTs could be customer loyalty programs. That’s why big companies like Starbucks are investing in Web3. In fact, just last week, the worldwide coffee chain launched its NFT loyalty program Starbucks Odyssey.

The coffee retailer is not the first company to issue an NFT loyalty program, and they likely won’t be the last. Other companies, such as beer manufacturer Budweiser, Estee Lauder brand Clinique, and basketball team Dallas Mavericks have launched NFT loyalty programs that are creative, fun, and rewarding for fans and the brands that publish them.

Starbucks Odyssey will roll out on the Ethereum Layer-2 solution Polygon, but it’s just one example of an NFT loyalty program that is changing how loyalty programs operate. 

NFTs Change the Nature of Customer Loyalty Programs

Until now, loyalty programs have been somewhat one-dimensional. Customers get a card that tracks their purchases and earn points based on their shopping habits. When they accumulate a certain number of points, they receive a discount on merchandise, a gift from the sponsoring company, or another perk of value. NFTs can build on that fundamental loyalty concept and reward brand fans in more creative ways.

For instance, NFTs allow brands to identify their superfans and create additional rewards incentives for those fans based on their status as superfans.

Such rewards may include access to in-person or online events that are exclusive to superfans; access to key personalities such as brand CEOs, celebrity spokespeople, and product creators; and exclusive communities such as Discord channels reserved only for superfans and brand evangelists. In essence, NFTs can be used to build vibrant communities around the brand that lead to further incentives through games, memes, surveys, and other community-oriented features that can offer additional rewards and incentives for participation.

With these kinds of features, the loyalty program can provide a positive feedback loop that itself acts as a super-loyalty program for the most loyal fans.

Loyalty Program are Powerful and Versatile

Another way loyalty program NFTs can be powerful branding tools is by connecting digital collectibles with real-world physical products. In a way that is more powerful and versatile than traditional loyalty programs, brands can use their NFT loyalty programs to make physical purchases and experiences more robust.

Coca-Cola, for instance, organized an International Friendship Day event in Decentraland in 2021 and sold “loot boxes” with wearables and other merchandise.

Disney sold blind boxes of Pixar Pals NFTs and made $3 million in 24 hours. While not a traditional loyalty program, such efforts do build brand loyalty by allowing fans to collect digital collectibles that represent the brand and resell them on a secondary market leading to profits for the brand and its fans.

Sports sneaker maker Puma, in an effort to compete with Nike, has launched a narrative NFT project based on metaverse wearables tailored by a fictional character. 

Narrative NFTs allow customers and brand fans an opportunity to immerse themselves in the story of a brand and its products in a unique and creative way while collecting digital art that may also provide utility. Again, while not a loyalty program in the traditional sense, such initiatives build brand loyalty among fans by including them in the brand’s narrative.

In the case of Starbucks, members of the loyalty program can participate in interactive games and learn interesting facts about coffee as they earn rewards. Starbucks sees it as an extension of their current loyalty program.

Starbucks has 25 million members of its loyalty program, a non-blockchain-based gamification system that rewards members for playing real-time games and taking on other challenges. Members of the loyalty program make up 53 percent of the brand’s in-store purchases. By focusing on that cohort, Starbucks can increase its revenues from those loyalty program members while increasing their share of in-store purchases and build greater loyalty among them. If NFTs can be used to make brand fans more loyal than they already are, then they could be the digital ticket to a non-fungible future that will continue to grow for years to come.