Starbucks is creating a “worldwide digital community” around coffee, with an NFT loyalty program. Its minting will take place before the end of this year.

Starbucks CEO Howard Schultz, along with executive vice president and chief marketing officer Brady Brewer, explained to investors during their Q2 2022 earnings presentation that the coffee company will add “new concepts such as ownership and community-based membership models that we see developing in the Web 3 space.” Brewer went further, saying: “Imagine acquiring a new digital collectible from Starbucks, where that product also serves as your access pass to a global Starbucks community, one with engaging content experiences and collaboration all centered around coffee.”

The firm’s official blog offers further insight into what all of that entails:

We’ll be launching a series of branded NFT collections,

Each of these will provide members with special experiences and benefits. These themes will be inspired by Starbucks’ creative ideas, both ancient and new, as well as through world-class collaborations with other innovators and like-minded brands. Starbucks isn’t the only one cashing in on the NFT hype – a number of high-profile companies and celebrities have been minting their own NFTs, including NBA Top Shot, Jack Dorsey, Kings of Leon, and Grimes. The move could help Starbucks tap into the $250 million NFT market, which is only expected to grow.

The strategy will be introduced as a digital collectible-enhanced loyalty program powered by non-fungible tokens (NFTs), which were the most talked about term last year. Customers are expected to be able to earn points or “stars” based on their purchases, possibly similar to how they can earn stars at hotels and other leisure businesses. These Starbucks-branded NFTs can be used to unlock experiences, such as early access to new products, special events, and more.

What are the benefits and perks, and why does blockchain technology need to be used for them? Your guess is as good as ours, but Starbucks executives are looking at the company’s history of being early to adopt mobile payments and Wi-Fi and believe that things will work similarly here with a noticeable boost in profits. On the same day that Starbucks informed the public of its NFT plans, the company also announced it would be accepting cryptocurrency as payment for coffee in all Starbucks locations around the world. This move by Starbucks is likely to increase mainstream adoption of cryptocurrency and blockchain technology. The use of blockchain technology will allow Starbucks to keep track of their coffee beans from farm to cup and ensure that they are ethically and sustainably sourced. Starbucks has always been a leader in sustainable sourcing practices, and this move will only solidify its commitment to those practices. In addition, the use of blockchain technology will allow Starbucks to create a traceable supply chain for their coffee beans, which will further increase transparency and accountability.

The first NFT pitch by Starbucks’ CEO came during an Open Forum for employees to apologize for “not doing enough” to support them and vow that “we’ll do better for our partners.” Schultz attempted to connect with the much younger, significantly less billionaire-ish crowd of workers by asking a relatable question about their investments while making his case against “purchasing things that have no intrinsic value.” Schultz then made the case that Starbucks’ (SBUX) long history as a mobile-first company and Starbucks Rewards program make it well-positioned to take advantage of NFTs.

To date, the firm has no idea which blockchain it may use or if it will utilize more than one, but whatever approach it takes will certainly be long-lasting – even if researchers have said those eco-friendly blockchain promises don’t always add up. Even so, Starbucks just has to construct a simple usage of crypto wallets that work for its 26.7 million rewards members, maintain their accounts from persistent phishing assaults, and secure its own processes against smart contract flaws or worse to ensure it succeeds. They can simply attach digital trinkets with a verifiable and unchangeable record of ownership to customer accounts, then design an ecosystem where people can buy, sell, or trade Starbucks-related NFTs.

Advertisement

Starbucks also has to avoid one major misstep: making customers pay more for their coffee with cryptocurrency than they would with fiat currency. It’s a balancing act, but Starbucks has always been known for its customer service innovation.

Read More About NFTs Here