September 27, 2024
On May 3, 2022, Starbucks announced their plan to introduce digital collectibles to their rewards program. Their goal was to “create a new, global digital community defined by collaboration, experiences, and shared ownership”. They believe that digital collectibles, aka NFTs, can create new models for customer loyalty, and engage customers via unique experiences, promotions and exclusive events. Furthermore, they plan to offer exclusive perks to customers who hold these digital collectibles. This entirely new experience, integrating web3 with their Starbucks Rewards program is called Starbucks Odyssey.
The program launched in beta on Dec 8, 2022 to a small group of rewards program members. Those selected to join the beta saw new features within the Starbucks Rewards program which gave them access to complete 'journeys' to earn Odyssey Points and 'Journey Stamps'.
Starbucks calls their digital collectibles ‘Journey Stamps’. To collect these, customers log into the Starbucks Rewards program and complete "entertaining, interactive activities called 'Journeys'". For now, these activities can range from taking virtual tours of Starbucks coffee farms, or answering trivia questions, and playing simple games. Starbucks has commented that they plan to add more activities in the future.
Completing these activities grants the participant a journey stamp in the app, which is a digital collectible (or NFT) that the holder can keep or sell via the in-app marketplace, or via a secondary marketplace like Nifty Gateway. Other collectors who may not be in the rewards program, can purchase them via Nifty Gateway.
Collecting these stamps also grants the rewards member additional points, which unlocks other benefits and experiences that are unique to those members. It has not been announced what experiences will be unlocked but Starbucks said it “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”.
On the technical side, these stamps are minted on a “proof-of-stake” blockchain, Polygon, which uses less energy than first generation “proof-of-work” blockchains to validate transactions. Customers will not need to already have a digital wallet to collect these stamps, nor will customers have an associated private key. This means that customers may not truly own their digital collectibles. This means that if Starbuck chooses to terminate the Odyssey program, customers may lose the stamps they have collected (unless Starbucks provides a way to allow them to be migrated). I suspect that Starbucks is doing this to simplify the experience for non-web3 natives, but it does run counter to the "Not your keys, Not your token (or NFT)" ethos.
As of April 4, 2023, Starbucks has launched 6 collections which you can find on Nifty Gateway. These collections are as follows:
The Siren Collection was released on 3/9/23 and only available to Starbucks Odyssey members for purchase on Nifty gateway for $100 per stamp. It contained 2000 stamps which featured artwork inspired by the Starbuck mermaid, the Siren. Each stamp has unique artwork with 5 different traits with varying rarity, which is what collectors typically see with a PFP (profile picture) collection. This was Starbuck's first PFP collection with rarity scores for each stamp.
The collection of 2000 stamps was sold out in less than 20 minutes. Since then, the collection has seen a total volume of just about half a million dollars. This puts it at #8 in total trading volume in the last 30 days on polygon, and #172 across all NFT volume on Ethereum.
The other stamps collections, starting with Holiday Cheer, has to be ''earned' via completing journeys inside the Rewards App. All of the artwork within a collection is identical, so there's no difference from one stamp to the next, except for its edition numbers. Some traders or collectors may pay a higher price for lower edition numbers (eg #1 of 5000 vs #4500 of 5000), but other than that, there's no major price differentiation within a collection.
Of these earned collectibles, the Holiday Cheer commands an extremely high average sale price of over $1000. Since this is Starbuck's first collection, the higher price reflects the higher desirability of a genesis editions, which is in line with market behavior. With a total collection size of 5000, and the current floor price of $1100, the Holiday Cheer collection has a $5.5 million marketcap.
The 2 largest Starbucks collections both represent a "genesis" moment for Starbucks. The Holiday Cheer was the first NFT collection, and the Sirens is their first 'sold' PFP collection. Future collections are likely to have lower overall trading volume, as well as a lower floor price, unless the new collection offers additional value not offered by any other collection.
General awareness for this collectible does not appear to be high. While Starbucks has not shared numbers for participants in the journey game, a look at unique owner numbers can give us a sense of participation.
Nifty gateway (using links above for each collection) shows that there's about 1,112 owners for the Siren collection, and just 537 owners for Holiday Cheer. Bean to Cup has 1971, Signature has 2080, and Doing Good has 1184.
With the exception of Sirens (which has 1112 owners for a collection size of 2000), holders of Journey Stamps are highly concentrated with a small group of collectors. Furthermore, with Starbuck's total rewards active members estimated to be around 24.8 million, participation in digital collectibles are an extremely small portion of their customer base.
A Times article noted that even Starbucks employees are not aware of the Odyssey program.
We should note, however, that Starbucks is currently in the beta phase of this program, and signing up for the collectibles program still requires joining a waitlist. There's also been very little promotion of the collectibles by Starbucks, either publicly or in-store, and specific rewards for collecting stamps are still unannounced.
The launch of the Odyssey program marks a significant step for Starbucks, demonstrating the company's commitment to embracing new technologies and staying ahead of the curve. They strongly believe that the unique characteristics of blockchain can enable new ways to engage their customers, which is something we wrote about here. This bold move highlights the growing interest in blockchain-based solutions and digital assets among major corporations.
As more companies follow Starbucks' lead, the digital collectible market is expected to expand, bringing new opportunities for innovation and growth. The integration of collectibles into loyalty programs, coupled with exclusive experiences, has the potential to revolutionize the way customers engage with brands, creating a new level of personalization and interactivity.
This article is written by Bambuu. We are building platforms that help businesses integrate Web3 digital assets to increase customer retention and brand awareness. If you're interested in working with us, join our waitlist here.
