Why Web3 For Starbucks?
Breaking down Starbucks reasoning to enter the Web3 World...
In today's edition of The Ground Floor we will be breaking down Starbucks reasoning to enter the Web3 World with the launch of Starbucks Odyssey.
Why Web3 For Starbucks?
Starbucks was founded in Seattle in 1971.
With over 33,000 locations worldwide today, Starbucks sells over 4 million coffee based beverages daily, providing Starbucks with a $113 billion valuation.
Despite the endless competition the coffee chain has faced throughout the last 51 years, Starbucks have continuously found ways to foster an extremely loyal customer base across North America & beyond.
Today, the average customer visits Starbucks 6 times each week.
10x Through Technology
In 2009, Starbucks launched its mobile app.
Interestingly, Starbucks valuation has increased more than 10x in the time since they launched the Starbucks app less than 14 years ago.
How has technology helped Starbucks succeed?
The Starbucks app plays an essential role in retaining customers.
By creating the right incentives, Starbucks successfully encouraged a large percentage of its customers to purchase products within the app & by offering customers the right rewards to buy more products — they built very high customer loyalty.
In 2022, the Starbucks loyalty program has 27.4 million members in the U.S.
These loyal customers account for 50% of the company's U.S revenue.
The Starbucks app is also used by the majority of its customers in the U.S.
⚡ The Next 10x Improvement?
Starbucks has never been afraid to adopt new technology.
To boost customer loyalty, Starbucks is seeking to further its relationship with its customers by creating a rewards program that provides experiences outside of Starbucks stores
To improve this program, Starbucks is also adopting the Web3 rails by minting these digital assets on a blockchain & providing an open marketplace to buy & sell these assets.
How can customers earn rewards?
Starbucks customers can earn "Journey Stamps" by buying food & drinks in store.
Customers can also complete activities such as quizzes that Starbucks is creating to educate its customers on the history of Starbucks to build brand affinity via its existing mobile app.
Journey Stamps provide access to experiences such as online drink-making classes, community events at Starbucks locations & trips to Starbucks coffee farms in Costa Rica.
Should a customer successfully gather stamps, and isn't enticed by any of these offerings, Starbucks will allow customers to sell these Stamps.
This NFT marketplace will go live in early 2023.
An Open Network
Starbucks has historically had a closed-network where customers could earn points that could be redeemed for Starbucks products, however, customers couldn't sell these points.
This move to create an open monetary network where customers can buy and sell points is one of the most important experiments worth paying attention to in Web3 today.
For consumers, being able to sell points without doubt increases the value of these points vs the points that can only be spent at specific stores.
For Starbucks, the Web3 rails is viewed as an impressive feature, not the product.
📡 Looking Forward
The Web3 rails is part of the technology Starbucks is using to build the best experience for its customers, however, make no mistake Starbucks is focused on improving its customer rewards program, not driving consumer adoption of Web3.
It will take many months to completely roll out Starbucks Odyssey to the 27 million customer rewards program members Starbucks has in the U.S alone, however, as Starbucks expands this program, there’s easily a world in which Starbucks can successfully onboard the largest number of consumers to the Web3 World to date.
Reddit recently smashed this record by onboarding 3+ million people to NFTs, however, I would be willing to wager Starbucks will soon top this record.
✔️ The Lessons Learned
1) With over 27 million members in the U.S, Starbucks has built one of the most impressive customer rewards programs in North America.
2) For Starbucks, the Web3 rails ie. minting digital assets on a blockchain & providing an open marketplace is an impressive feature, however, it is not the product they are creating.
3) Starbucks could be on track to onboard the highest number of new consumers to Web3 to date — converting 25% of its U.S loyalty program members would be sufficient.
4) Bonus: One of my favorite threads breaking down Starbucks' top psychological hacks.
“I spend too much at Starbucks” is a legendary meme.
It's also not an accident: the coffee retailer -- worth $120B -- uses many psychological hacks in its store and menu designs to get you to drop more cash.
Here are 11 of them 🧵
— Trung Phan (@TrungTPhan)
Oct 25, 2021
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