Starbucks (SBUX) pioneered the modern loyalty program with its use of its app to drive customer engagement.
You don't have to place a digital order in order to get loyalty-program rewards with the coffee chain -- top-tier members used to get a gold membership card in the mail -- but you do need to use the app.
Customers download the app, then get rewarded for using it to buy food and drink. It's a good experience because users can customize their orders, getting exactly what they want, and the store saves the expense of taking orders and capturing email addresses.
The Seattle chain thus found a way to increase customer loyalty, drive better in-store and pickup experiences, and collect email addresses by investing in technology. The company created the blueprint that pretty much every fast-food and fast-casual chain uses now.
Starbucks' loyalty program drives repeat visits in three ways, the first being the most important.
- You get free stuff: Spend money at Starbucks and you get rewards points that quickly lead to free drinks, food and swag like ceramic and reusable coffee cups.
- It's easy to use: You can customize your order as much as you want.
- Starbucks will send you offers: The chain can use its app and mailing list to drive traffic via deals and special offers.
At the core of the program, Starbucks has offered a high-tech version of a punch card. You buy a few drinks and then you get a free one. It's a simple, valuable proposition that benefits the chain and the customer.
Now, for reasons known only to its executive leadership, Starbucks wants to screw up the system by adding nonfungible tokens to its loyalty-program mix.
TheStreet
Starbucks Really Wants to Ruin Its Loyalty Program
Sometimes even smart business leaders overthink things.
Starbucks has tried various other freebies through its loyalty program (streaming music and ride share), but that's not why people use the app. The chain's customers use the app because it's convenient and, if they use it regularly, they get free drinks and food.
Anything that distracts from that is superfluous. But Starbucks for some reason thinks adding NFTs will improve its program.
The chain outlined the idea on Sept. 12:
Starbucks today unveiled Starbucks Odyssey, a new experience powered by Web3 technology that will offer Starbucks Rewards members and Starbucks partners (employees) in the United States the opportunity to earn and purchase digital collectible assets that will unlock access to new benefits and immersive coffee experiences. Starbucks is one of the first companies to integrate nonfungible tokens (NFTs) with an industry-leading loyalty program at scale, while creating a digital community that will enable new ways for Starbucks to engage with its members and its partners.
This seems like a lot of expense when the chain could have just offered members more food-and-drink benefits. The whole thing seems as if the chain is jumping into the Next New Thing even though nobody was clamoring for it.
“By integrating into the Starbucks Rewards ecosystem and grounding the experience in coffee, connection, and community, we are entering the Web3 space differently than any other brand, while deepening our members’ connection to Starbucks," Chief Marketing Officer Brady Brewer said in a statement.
"Our vision is to create a place where our digital community can come together over coffee, engage in immersive experiences, and celebrate the heritage and future of Starbucks."
That's a whole lot of words to say not very much.
Nobody Wants Starbucks NFTs
Starbucks has a relationship with its customers and some small percentage of that audience collects mugs from various states.
Offering NFTs as part of its digital rewards may appeal to a similar subset of its audience, but it's a niche play that ignores that its loyalty program is driven by people earning stars to get free food and drink.
Starbucks wants to deepen its connection with customers in way it's hard to imagine customers wanting.
"Once logged in, members can engage in Starbucks Odyssey ‘journeys,’ a series of activities, such as playing interactive games or taking on fun challenges to deepen their knowledge of coffee and Starbucks," the chain said in a news release.
"Members will be rewarded for completing journeys with a digital collectable ‘journey stamp’ (NFT)."
Members can also buy NFTs, or stamps, which really seem to have little to do with the core "I give you money, you give me coffee" relationship. And yes, people may work at the chain's cafes or meet friends there, but is anyone really looking for a deeper relationship with their local SBUX outlet?
"As stamps are collected, members’ points will increase, unlocking access to unique benefits and experiences that have never been offered before," the chain said.
"These experiences could range from a virtual espresso martini-making class, to access to unique merchandise and artist collaborations, to invitations to exclusive events at Starbucks Reserve Roasteries or even trips to Starbucks Hacienda Alsacia coffee farm in Costa Rica."
Okay, maybe a free trip is nice, but few, if any, customers want NFTs added to their coffee experience. This is Starbucks making something simple very complicated for absolutely no reason.
