Starbucks NFT journey with Polygon:
The global coffee giant Starbucks is starting its journey in the NFT market! However, there is a dilemma. Is it too late to catch up on hype, or too early to gain mass adoption among their users?
What does this mean?
Ok, so here is a brief overview of how this would work:
Starbucks says it will offer its U.S. members the ability to earn and buy digital collectible stamps in the form of NFTs. Dubbed "Starbucks Odyssey", each collectible digital stamp has its ownership verified on the Blockchain and will include a point value based on its rarity. As more stamps are collected, members' points will increase, unlocking access to unique experiences.
The iconic coffee chain says that rewards range from receiving a virtual espresso martini-making class to accessing unique merchandise to exclusive events. Invitees receive access to “Starbucks Reserve Roasteries” and possibly trips to the Starbucks Hacienda Alsacia coffee farm in Costa Rica.
Members can earn NFTs by playing interactive coffee-themed games or taking on fun challenges on Starbucks Odyssey, which will be launched later this year. Users can also purchase the NFTs on the built-in marketplace without the need to connect their wallets or use any crypto.
What we think about this:
In general, this is a great win-win for Starbucks and Polygon. Every corner tenant would be getting their feet into a new territory, which is important for getting introduced to the entirely new and innovative technology that they can leverage to boost shares, save hundreds of millions of dollars on transaction expenses, increase the value for their customers, and get a new fresh selling point from the increasingly stagnant business norm. And of course, Starbucks’s loyalty program is a bank, not officially, but it’s a bank by its nature. By having Polygon’s Blockchain as the tech platform, they can significantly boost it and cause their AUM to triple / quadruple with relative ease and quickness. This is due to the access to new investment-friendly users, and by using new tech / ideologies / selling points to increase the holdings of their existing loyalty program members.
For Polygon, it is a highly beneficial scenario to be a successful business for the long term. To reduce their dependence on market volatility, they need to have cases like this with well-established businesses with millions of active customers who can bring new users and new capital to Polygon’s ecosystem.
Eventually, every Blockchain company should be trying to grow their products being that millions of users use it on a daily basis and are unaware of the basics of the technology. There was a big buzz phrase in 2016-2020 called “mass adoption”, which highlights a particular product gaining millions of users from the (non-technical) real world. For example, the vast majority of Starbucks’ users don’t care about the Blockchain in general or Polygon at the moment unfortunately. They are just excited about the new benefits and kinds of major upgrades of the loyalty program system.
In the new economic environment, all of the real-world behemoths (especially publicly-listed) should figure out the new ‘cool’ ways of how to attract users (especially Gen-Y and Z), and impress investors by showing new markets / ways to increase their revenue / reduce costs. Blockchain technology is a game changer for this, and is an amazingly well working solution for loyalty programs. To make it work however, they have to fully rely on the technology, not just dabble shortly like Chipotle and some other food chains.
Does Starbucks do this in the right way? To be fully honest, we believe it is very complicated to conclude at the moment, being that many mistakes can be made by real-world brands. Therefore, this makes it quite complex to justify the GameFi / Web3 tag of this product in real time.
What would be better?
As a first step, it would be best to just create levels with breedable NFTs and allow users to get tokens as rewards, use NFTs as an ID, and pay for the coffee by using tokens. This option would be easier to understand for its users and simultaneously have better reception, more users, more transactions, and eventually a more successful adoption trajectory.
After that, they would be able to sophisticate their objectives and handle more complexity. However, we will see how these innovations work from a distance, and definitely wish the best of luck to Starbucks and Polygon with this innovative collaboration.
What does this mean for YOU?
If you are Starbucks customer and DON’T care about crypto:
So basically, almost nothing. You have a new and interesting way to get engaged with your favorite coffee shop chain. Would you be getting any significant benefits financially? Probably some (especially during the beginning of this product roll out), but more than likely it wouldn’t be something of significance to you personally.
If you’re Starbucks customer AND CARE about crypto:
This is a very cool chance to become an early adopter, and probably gain some profit by flipping the NFTs or participating to maximize your rewards. The mechanics would be relatively difficult for the vast majority of your coffee bros, so you can take advantage of your crypto experience and get some great rewards from the experience.
If you are a crypto investor:
Generally it’s a good sign, especially for MATIC holders. However due to the general market sentiments and bearish narrative, it won’t be providing a big impact on the price in the short term (but is a very bullish sign for all of the long - term holders).
If you are a SBUX holder:
This is good for short rent speculation, and kind of a bullish sign for very long term holders. This shows that management is looking for ways to attract new customers, as well as monetize existing customers more effectively (given that it is still a multi-billion dollar coffee shop company, even with a de-facto bank/loyalty program).
The macro economic environment is quite bearish and markets are near the cliff, so this is historically not the best time to make any investment decisions, so the best you can do is to keep learning and watch the market until the moment it shows upward macro movement.
The hope of Starbucks is mainly to be the “coffee of choice/brand” for already existing crypto users and attract a mass share of crypto coffee people rather than to convert people who are not interested at the moment.
Brady Brewer was quoted as saying that Starbucks is playing the route of being “strategically patient” rather than a quick in-and-out type of deal with crypto and NFTs.
A standout point made by Starbucks is that its Rewards members won’t need to know anything about NFTs or blockchain, own a crypto wallet, or trade in cryptocurrency to participate in the program. They will be able to take part in interactive games or other challenges to earn stamps. They will also be able to purchase stamps with their credit cards.
*What does this mean for regular customers of Starbucks who already use/are interested in getting into crypto?:
They will begin their crypto journey with a trusted brand known for its exceptional rewards, along with the ease of integration and cost effective support brought on by Polygon’s technical expertise.
At the moment, most routes for crypto access for users are done through the “gates” of Crypto companies, which leaves out the ability to generate many real-world applications and physical utility. This is where partnerships with major consumer brands and key reputable projects from the Crypto side come in action.
*From an internal perspective, Starbucks employees and partners will receive exclusive rewards. This highlights the DAO (Decentralized Autonomous Organization) structure seen in Crypto, helping to foster the proper mechanics for internal growth. Starbucks will also be utilizing the Polygon network to track its philanthropic endeavors, to bring ultimate transparency to the causes which they support.
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