What Starbucks’ bet on NFTs says about the future of loyalty

2022/09/06 Innoverview Read

Over the past year, non-fungible tokens (NFTs) have become commonplace, with brands frequently tying them to digital perks, merchandise and exclusive experiences. Though the tokens have gradually been losing shock factor, an upcoming push by Starbucks to tie NFTs into its lauded loyalty program could reignite some spark.

In a recent earnings call, the company teased a September launch date for the NFT tie-in, a move meant to attract new customers to its loyalty program, which already awards free drinks and merchandise. The chain also hopes the loyalty update will be accretive to its core retail stores.

“This new digital web3-enabled initiative will allow us to build on the current Starbucks Rewards engagement model with its powerful spend-to-earn stars approach while also introducing new methods of emotionally engaging customers, expanding our digital third place community, and offering a broader set of rewards,” said Starbucks interim CEO Howard Schultz during the call.

Though full details of the program are yet to be revealed, the announcement has created waves within the marketing industry. Starbucks’ loyalty program is an extremely successful part of its business, with over half its sales coming from its rewards members. Tying the program to the virtual world and blockchain technology underpinning NFTs could paint the way for future programs.

“NFTs could make sense for loyalty programs because it is another way to interact with consumers,” said Pedro Rodriguez, senior vice president of growth and transformation at Horizon Media and head of its Chapter and Verse division. “With the depreciation of cookies, getting access to that first-party data [in other ways] is going to be critical.”

Some businesses have already gotten a jump on introducing similar concepts. Last December, Applebee’s launched an NFT-centric promotion in which the owner of a one-of-a-kind digital image unlocked a year’s worth of real-world purchases at the chain. Taco Bell and Domino’s are reportedly considering ways to tie NFTs to their loyalty programs, though, to date, the brands’ NFT promotions have involved generating donations to their charitable arms.

(Copyright: MarketingDive What Starbucks’ bet on NFTs says about the future of loyalty | Marketing Dive)