Starbucks has announced its plans to create its own Non Fungible Tokens (NFTs) launching later this year. The digital collectibles will offer owners access to exclusive content experiences and other benefits that are centered around coffee to start. The Web 3.0 experience could also expand into other areas Starbucks has played in over the years like art, music, books and beyond.
The coffee company believes that NFTs have a broad potential to create "an expanded, shared-ownership model for loyalty".
We plan to create a series of branded NFT collections, the ownership of which initiates community membership, and allows for access to exclusive experiences and perks. The themes of these collections will be born of Starbucks artistic expressions, both heritage and newly created, as well as through world-class collaborations with other innovators and like-minded brands.
It's not the first time Starbucks is trying a membership for its customers. There's a minimum amount that needs to be deposited in Starbucks' app to become a member. This money is non-refundable and customers can only use it for in-store purchases.
Since Starbucks doesn't allow customers to cash out the remaining balance, the only way to empty the Starbucks wallet is to buy a coffee. This gives Starbucks a regulatory clearance to invest this money anywhere it wants unlike other companies like PayPal that offer customers the ability to cash out and must keep adequate reserve in hand to facilitate such transactions. The only reserve Starbucks has to keep is of coffee - something which isn't really challenging for it.
This model allows Starbucks to capitalize on consumer's remaining balance. According to its 2018 annual report, Starbucks' customers had around $1.6 billion in the app.
On its blog, Starbucks further added that it has a history of taking leading edge technology, innovating and making it accessible and approachable for mainstream audiences.
Our history with loyalty, mobile payment, mobile ordering and Wi-Fi has taught us how to engage customers at scale to unlock opportunities. Here too, a Starbucks Digital Community Web3 platform has the potential to pioneer the combination of an approachable, widely accessible front-end, backed by the right blockchain technologies that are fast and inexpensive.
Starbucks is calling the Web3 experience a "third place" - a place between home and work where poeople can feel a sense of belonging over coffee. The company also noted that it would build its NFT community on an "environmentally sustainable" platform, although didn't indicate exactly which.
Startbucks' first NFT collection, membership and community will start later this year in a phased approach. The first collection will form the core digital community and backbone of Startbucks' future collection and collaboration on the same ecosystem.