The global coffee store franchise giant Starbucks is seeking to launch a Web3 rewards program in its quest to attract and retain customers, according to its CEO Howard Schultz.
According to Starbucks’ interim CEO Howard Schultz, the company is looking to launch a Web3 rewards program for better customer engagement and to attract and retain customers. Schultz revealed the information during the global coffee store franchise giant’s Q3 2022 earnings call last week.
“We have been working on a very exciting new digital initiative that builds on our existing industry-leading digital platform in innovative new ways, all centered around coffee and—most importantly—loyalty,” the CEO said.
Per Schultz, the company will unveil this new Starbucks Web3 rewards program digital initiative on September 13, in time for its annual Investor Day event in Seattle.
The Starbucks Web3 Rewards Program
The Starbucks Web3 rewards program digital initiative will not be a total revamp of the company’s current rewards program but instead an expansion of sorts. According to Schultz, it will allow Starbucks to build on the current model—the spend-to-earn Stars approach—of its rewards engagement while, at the same time, introducing new methods to engage customers emotionally.
Thus, the company would be able to expand its “digital third place community” approach and offer a broader set of rewards. “Third place,” to those who may be unfamiliar, is a sociological term that describes a community space between home and work.
While the CEO is keeping mum about this digital initiative, he did mention in brief that Starbucks is focused on “integrating our digital Starbucks Rewards ecosystem with Starbucks-branded digital collectibles as both a reward and a community building element.”
“This will create an entirely new set of digital network effects that will attract new customers and be accretive to existing customers in our core retail stores,”Starbucks CEO Howard Schultz
During the Q3 2022 call, it was revealed that Starbucks’ quarterly results purportedly beat analyst estimates, with a 9% quarter-over-quarter bump in global revenue to a record $8.2 billion. Schultz also said during the call that the Starbucks Web3 rewards program digital initiative is part of the company’s plans to attract and keep their younger customers.
“We don’t want to be in a business where our customer base is aging, and we have a less relevant situation with younger people,” he said. He also added that the company has “never been, in our history, more relevant than we are today to Gen Z.”
It will be remembered that in April, Schultz announced the company’s plans to enter the Metaverse through NFTs sometime this year. He noted that “sometime before the end of the calendar year, we are going to be in the NFT business.”
Mixed Reactions to Starbucks Web3 Initiatives
The downside is that not all Starbucks’ employees show the same enthusiasm regarding the Starbucks Web3 rewards program digital initiative as their CEO. In May, during a presentation that partly covered NFTs, one employee who only wished to be called “Mark” shared that he disagrees with the company’s plans mainly due to NFTs’ environmental impact.
“Blockchain, whether it’s proof of stake or proof of work, is not planet positive… it is going to destroy the planet… and it makes me, as a technologist, and I’m not the only one, very worried about that, that this company would go in that direction,” he said, “I don’t want to feel this way about Starbucks.”
He also contended that rather than being inclusive, NFTs are more exclusive. He was probably alluding to the fact that several NFT collections have been labeled blue-chip collectibles. A case in point is the Bored Ape Yacht Club NFT collection, which has become a hot, must-have collectible for athletes, entertainers, and other well-known personalities.
Starbucks first dipped its feet into blockchain waters four years ago through its “bean-to-cup” traceability supporting smallholder farmers.
It remains to be seen whether customers, employees or investors will welcome the company’s latest Web3 initiative. Nevertheless, Schultz sees it as part of a much more significant transformation planned for the coffee franchise giant.
“We are looking forward to fully showcasing the power and the opportunity of our reinvention plan,” he said.
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