Perspectives on the Starbucks beta-experience with Web3 and NFTs

By Paolo Barbesino, PhD and Qaalfa Dibeehi

Perspectives on the Starbucks beta-experience with Web3 and NFTs

Starbucks closed its Odyssey beta platform— a pioneering NFT-based rewards program, on March 31, 2024.  Odyssey was launched as an innovative extension of the traditional Starbucks Rewards in to the dynamic Web3 space. It promised unique experiences and rewards, such as NFT stamps and exclusive tours, emphasizing deeper engagement and community building.  However, its conclusion and the transition of its marketplace to Nifty Gateway (a leading curated marketplace for NFTs), invites us to ask what’s the balance between technological innovation and utility—how do new technologies serve actual customer needs?

Customer vs technology readiness and engagement

Starbucks’ foray into NFTs wasn’t just about creating digital collectibles but was a step towards reimagining customer loyalty and community.  A lesson here is that the possibilities of technology should not drive the experience.  The experience should drive the technology.  Companies with deep pockets should experiment but they should always understand where their customers are in relation to their experiments.  Metaverse journeys are a great idea and will eventually become part of our everyday experiences and expectations, but we seem to be far from that today – even with the might of Facebook as Meta pushing in that direction.  Starbucks is not alone.  Other restaurants like Chipotle,  Wendy’s and others set up shop in the metaverse where you could win NFTs by completing journeys.  Again, the Web3/ NFT technology works.  The issue is not its functionality but rather the overall customer experience.  In order to collect the NFTs through the gamified metaverse journeys customers have to commit their time.  This would make sense if one thinks the average customer approaches Web3 like a gamer approaches their gaming life.  That would be a fatal mistake though.  The average customer is not going to the Web3 to explore Starbucks or any other restaurant for the sake of it.  Starbucks does not yet have enough meaning in a metaverse context to drive behaviour, to be the magnet that pulls you in like online games do.  Customers often find the journeys these companies have designed to be repetitive and time-consuming – requiring them to spend a lot of time watching videos, taking quizzes, using their camera phones to visit locations, and making regular purchases over several weeks. Commercial metaverse linked experiences have to be designed so that the commercial entity is invited to join in the customer’s story as opposed to trying to get the customer to partake in the company’s Web3 process.  Only when this is done will companies be able to drive more customer loyalty and engagement in the metaverse space.

Sustainability considerations:  transactional vs brand trust

A lesser talked about issue is the sustainability perspective.   Customer loyalty and sustainability are closely intertwined. When brands prioritize sustainability, it aligns with customer values and fosters emotional connections. Over two-thirds of consumers consider sustainability when making purchasing decisions. Authenticity matters—brands that genuinely contribute to sustainability strengthen loyalty.

Starbucks, for example, has publicly committed to reduce carbon, water and our waste footprints by half by 2030.  This is a commendable and bold. Part of reaching that goal relies on innovating with more responsible stores, operations, manufacturing and delivery.  The use of blockchain and NFTs fall under that rubric.   While blockchain technology offers enhanced trust and transparency, its environmental implications cannot be overlooked.    Blockchain and NFTs help with transactional trust but it is corporate authenticity and integrity that help with brand trust.  Without considering the energy consumption associated with blockchain activities and the production of NFTs, a company could be at risk of promoting transactional trust while destroying brand trust, a disastrous situation.  Customers do not choose to engage with companies that have generated little brand trust even if a particular transaction with that company can be trusted.  This will be as true in the metaverse as it is in the real world.    Sustainability isn’t just a trend; it’s a strategic advantage for businesses seeking lasting customer relationships.

The Odyssey experience highlights the importance of not only adopting new technologies but also adapting them to meet the triple bottom line: people, planet, and profit. We need to critically assess their long-term viability, environmental impact, and role in fostering genuine community engagement and loyalty.  The near-term future of NFTs in loyalty programs might be uncertain, the exploration of blockchain for enhancing transactional trust is clear.  Successful Web3/ NFT experiments will not lose sight of the need to build brand trust in how the innovations are implemented in accordance with company values and commitments.  Innovation is not just about adoption but adaptation—making sense of what works, what doesn’t, and why…  from both the company’s (inside-out) and the customer’s (outside-in) point of view.