Starbucks unveils its Web3 initiative, incorporates NFTs into business operations

At the Investor Day event scheduled to hold later this month, Starbucks will showcase its web3 campaign, which incorporates NFTs with a coffee theme. The business revealed plans to explore the web3 market earlier this year, claiming that its NFTs would not only act as digital collectibles but would also grant their holders access to other exclusive benefits.

Starbucks provided few specifics regarding the appearance of its initial batch of NFTs, the exact functionality they would offer. It implied that the strategy was still being completed by stating that it would most likely be multichain or chain-agnostic.

The coffee chain posted strong profits in the quarter, exceeding Wall Street’s forecast. Starbucks reported revenue of $8.15 billion compared to analysts’ anticipated $8.11, and earnings per share of 84 cents adjusted beating the expected 75 cents.

Ultimately, the coffee chain has kept the web3 announcement very low-key, stating only that additional information would be released towards the end of the year, hoping that digital collectibles might provide an enhancing business adjustment to its chain.

According to TechCrunch, Starbucks seems to have taken a different strategy towards incorporating NFTs into its business, unlike some other businesses. Starbucks considers the incorporation of the digital collectibles as a continuation of the commitment of its customers. Adam Brotman, the creator of the Starbucks app and the company's Mobile Order & Pay system, was hired by the organization to assist as a special advisor on the initiative.

In terms of technological advancements, Starbucks' Mobile Order & Pay has been one of its greatest achievements.

Well before Apple Pay became widely used, the Starbucks was among the first companies to offer the services of a digital wallet. The company's mobile ordering has increased along with the growth of mobile payments more generally. Mobile orders, delivery, and drive-through purchases made up 72 percent of Starbucks' U.S. sales in the most recent quarter (their fiscal Q3 period). Additionally, as a result of changing consumer preferences brought on by the COVID-19 pandemic, the mobile ordering total revenue increased to a new high of 47 percent, up 13 percent year-over-year, the business stated.

The NFTs would be directly linked to Starbucks Rewards, which the business had not previously made clear.

Customers may earn Stars by making purchases in-app or at Starbucks locations, that can then be converted into physical prizes like free coffee. More people could join the web3 ecosystem if buyers could "earn" the digital collectibles through regular purchases. One of the issues the market is currently facing is the high cost of digital art and collectibles

At this week's earnings call with investors, Howard Schultz, the company's founder and interim CEO previewed the next web3 initiative.

“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,” Schultz said, before touting that the company has “never been, in our history, more relevant than we are today to Gen Z.”

Schultz continued, “we believe 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, including one-of-a-kind experiences that you can’t get anywhere else, integrating our digital Starbucks Rewards ecosystem with Starbucks-branded digital collectibles as both a reward and a community building element.”