Starbucks launches Web3 rewards program to attract new customers

Starbucks interim CEO Howard Schultz said the company is looking to launch a new Web3 rewards program to attract and retain customers.

During the company's third-quarter earnings call on Tuesday, Schultz noted that Starbucks will soon unveil a new Web3 "digital initiative" that will expand the company's loyalty program:

"This new digital Web3 capability will allow us to build on the existing Starbucks Rewards engagement model, leveraging the powerful way 'Spend and Earn Stars' while introducing new ways to engage customers."

During the call, the CEO didn't reveal his thinking, but he briefly mentioned that the company is considering "integrating our digital rewards ecosystem with the Starbucks brand's digital collection as a reward and community-building Elements.” The full announcement will be made during the Starbucks Investor Day on September 13.

"This will create a whole new set of digital network effects to attract new customers and grow existing customers in our core retail stores," he said.

Starbucks’ quarterly results topped analysts’ expectations, with global revenue rising 9% from the previous quarter to a record $8.2 billion, according to reports.

During the conference call, Schultz also said the Web3 initiative is part of Starbucks' efforts to attract and retain younger customers.

“We don’t want to work in an industry where our customer base is aging and we’re not as relevant to young people,” he added, adding, “Never in the company’s history have we been more relevant to Gen Z than we are today. "

Starbucks initially announced plans to jump on the non-fungible token (NFT) bandwagon in April of this year, with Schultz noting: “Sometime before the end of the year, we will be in the NFT business.”

Starbucks may not be the only major brand launching a Web3 loyalty program in the near future.

Last month, blockchain B2B startup Hang raised $16 million in Series A funding, led by Paradigm. The company is looking to help brands transition their current membership and loyalty programs to the blockchain and incorporate NFTs. Early clients of the company reportedly include brewer Budweiser, sports media Bleacher Report, pop music festival groups Bonnaroo and Superfly.