Chained Picks: Starbucks looks at digital collectibles and better engages customers

Starbucks CEO Howard Schultz says Web3 will play a role in the future of Starbucks' popular rewards program.

Schultz said on the company's third-quarter 2022 earnings call on Tuesday: "We have been working on a very exciting new digital initiative that builds on our existing industry in innovative new ways.On top of the leading digital platform, everything revolves around coffee and - most importantly - loyalty."

According to Schultz, the company will unveil new digital plans at its annual Investor Day event in Seattle on September 13.

Schultz said the program will allow Starbucks to build on its current reward engagement model while introducing new ways to emotionally engage customers, expand its "digital third place community" approach and provide a broaderaward.

"Third place" is a sociological term that describes the community space between home and work.

The CEO said the rewards, which include one-of-a-kind experiences and Starbucks-branded digital collectibles, are both a reward and a community-building element.

“This will create a whole new set of digital network effects that will attract new customers and increase existing customers in our core retail stores,” he said.

However, Starbucks' relationship with the Web3 initiative has not been met with enthusiasm from employees.In May, in a presentation that included a section on NFTs — unique blockchain tokens that represent asset ownership, an employee who gave only the name “Mark” and described himself as a technologist expressed his disagreement with the company’s plans,And cite the impact of NFTs on the environment.

"Blockchain, either proof of stake or proof of work, is not good for the planet...it will destroy the planet...that makes me, as a technologist, and I'm not the only one, very concerned about thisOne point, the company is going in that direction," he said, "I don't want to feel that way about Starbucks."

Mark also believes that NFTs are more exclusive than inclusive.

Several NFT collectibles have become high value or "blue chip" collectibles, most notably the Bored Ape Yacht Club NFT collectible.Last month, pop icon Madonna made headlines when she said, "I'm all about getting an ape, and I've made it very clear what I want: an ape with a motorcycle leather cap and multicolored teeth."

The ape in question, Bored Ape #3756, was listed on OpenSea for 800.69 ETH, which was about $1.27 million at the time.

Starbucks made its first foray into the blockchain space more than four years ago, launching a bean-to-cup traceability program to support smallholder farmers.

It remains to be seen whether customers, employees or investors will embrace this latest Web3 initiative.But Schultz positioned it as part of a larger transformation planned for the corporate giant.

“We look forward to fully demonstrating the power and opportunity of our reinvention program,” he said.