Key Points (tl;dr)

After brainstorming with a group of friends for 2 hours, I gained a deeper understanding of Starbucks' move into web3. This is not a simple experiment, but a determination of the founder. If 25 million members seamlessly switch to web3, it will directly increase the NFT user base by 10 times, marking the next milestone for the NFT industry. Record my thoughts here, and feel free to share and discuss

1. Why does Starbucks plan to do membership NFT at this point in time?

   1. It has to be done to break the challenges of an aging brand and the drop in offline business because of the covid-19 lockdown

2. How Starbucks will do NFT (my bold guess version)

   1. Membership card + metaverse + digital goods + community brand

3. What impact will Starbucks bring to the NFT industry?

   1. Lower the threshold for users to use NFT, 10x increase for NFT industry users

   2. Establish cooperation with existing web3 brands to enhance the rights of existing NFT users

   3. Establish a benchmark for innovation in all areas and encourage more web2 brands to enter web3

   Why does Starbucks plan to do membership NFT at this point in time?

   The answer is that it has to be done.

   Starbucks now faces the challenge of an aging brand and the drop of offline business because of the covid-19 lockdown. The beverage industry has always been highly competitive. Starbucks is no longer cool for the young generation and is replaced by the blue bottle in U.S and Heytea in China. In the Q3 earnings report, China's same-store sales fell 44% due to covid-19 lockdown. Starbucks Shares have fallen 20% in a year and there needs a way to break the ice, re-innovate the brand and enhance the online business.

At the same time, we see that Starbucks entered web3 with the determination of its founder and the strongest helpers. Its founder Howard Schultz first revealed the upcoming web3 initiative during an earnings call with investors this week. To develop the project, Starbucks brought in Adam Brotman to help as a special advisor, who is the former chief digital officer of Starbucks and led the App during his time there, reaching 50 million users worldwide and becoming the second largest mobile payment app in the U.S. market (31 million users), behind Apple Pay (43 million).

Adam is now the co-founder of Forum3, a Web3 loyalty startup that uses Web3 technology to support the brand's loyalty program, and will be working closely with the Starbucks team to build the Starbucks Web3 program.

Btw, Forum3's another co-founder Andy Sack also has an impressive resume, helping Microsoft CEO Nadella with digital transformation and related innovation as an advisor from 2015-2021.

what Starbucks plans to do with NFT (my bold guess version)

My guess: membership card + metaverse + digital goods + community brand

metaverse

Many people felt a little disappointed after reading the official announcement because most of the content corresponds to the current membership benefits, not seeing enough innovation. But in fact, there is a special paragraph in the announcement about "reinventing the third place", where members and employees meet together for the love of coffee. Isn't this the metaverse?

Starbucks has always been known as a third place, where customers don't just have a cup of coffee, but enjoy their time in that space. A great deal of the industry standards now are innovations from Starbucks, such as freshly ground coffee beans that make the entire store smell good, comfortable couches, and good internet that allow you to stay all day. But in the post-covid era, where users won't go offline for active or passive reasons, Starbucks must create a digital version of the third place to respond.

In the metaverse, users can socialize and interact with a cooler digital identity. Here are some cases already, if you hold the NFT of Brew by Intern, you can show your cool coffee cup inside the oncyber, as well as your own unique identity.

• Here’s an egg, the name of the Starbucks NFT project is Odyssey, itself a Greek mythological adventure, so you can see that Starbucks has high expectations for this

  Kubrick's science fiction masterpiece 2001: A Space Odyssey also used this word

  Digital goods Based on the metaverse, digital goods will also be easier to create and sell. Starbucks itself has a strong IP that can be enhanced and spread through digital merchandise, and on the other hand, it can generate more revenue to supplement the reduced revenue from offline due to the covid and labor costs.

  Community Brand

  The Community brand is also a feature of web3, especially for brands like Starbucks that need to blossom from old trees. The holders are also the IP owners, and starting a community brand helps build their own derivative community and brand on the one hand, and expands the original brand ecosystem on the other. The original brand and the derivative can also share the investment and benefits to further achieve a win-win situation. See the attempt of Brew by Intern, where the community voted on the taste of coffee and the name of the web3 brand

  UTILITY, DYOR, DIAMOND HANDS, PUNKIN SPACE, DOUBLE TROUBLE, KINGS JUICE

Membership Cards

Finally, let's talk about membership cards. While it may not seem innovative enough at this point, with the metavers, digital goods and community brand mentioned above, membership benefits would be expanded accordingly and be more competitive. In addition, NFT will be more environment friendly than physical cards, which is in line with Starbucks' brand philosophy.

What impact will Starbucks NFT have on the industry?

• My answer

  1. Lower the threshold for users to use NFT, NFT industry users 10 times more

  2. Establish cooperation with existing web3 brands to enhance the rights of NFT stock users

  3. Establish a benchmark for innovation in all aspects to encourage more web2 brands to enter web3

  a. Lower the threshold for users to use NFT, 10 times the growth of NFT industry users

  As seen in Starbucks' press release, its deployment on Polygon lowers gas fees; it also supports credit or debit card purchases, behind which is the encapsulation of crypto wallets. These 2 features would give users a simpler web2-like payment experience, rather than having to understand a series of new concepts such as crypto wallets, Mnemonic phrases, crypto tokens(like ETH), gas fees, etc. As we all know in product design, every extra step would filter 80% of users. With the minimalist experience and lowered threshold, it is easy for existing members (nearly 25 million active members in the US) to seamlessly switch to web3, directly increasing the NFT user base by 10 times, marking the next milestone for the NFT industry; on the other hand, it is also easy for subsequent new users to enter.

b. Establish cooperation with existing web3 brands to enhance the rights of NFT stock users

Of course, these 25 million members will not become web3 users overnight, so it is necessary to establish co-branding with existing web3 brands, which will help Starbucks expand its own influence in web3 on the one hand, and bring benefits to the existing NFT stock users on the other, which is a win-win strategy.

c. Establish a benchmark for innovation in all aspects and encourage more web2 brands to enter web3

Starbucks itself has a strong innovation gene, which has slowed down in recent years, with the most famous examples Frappuccino and VIA Instant, as well as the Third Place mentioned above. The 4 directions of membership card/metaverse/digital goods/community brand are in the process of exploration by all web3 players and no best practices have emerged yet. Expect Starbucks + Forum3, the industry veterans + former innovation kings, to establish a benchmark for innovation in all aspects and encourage more web2 brands to enter web3. With 9 more Starbucks-like brands entering web3, users will easily break 100 million, and NFT will enter a more mature and prosperous stage.

The End

I am a heavy coffee lover myself, with 2 cups a day all year round. When I started my own business before, I also studied all the cases of Starbucks and was impressed by its brand concept and innovation. However, Starbucks is now facing the challenges of an aging brand and the drop of offline business, and I myself haven't drunk Starbucks for a long time. I look forward to the determination of the founder + experienced veterans who can make breakthrough innovations in web3 to bring both their own growth and the prosperity of the industry. WAGMI

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Coffee Time!

• Welcome to own my NFT and buy me a cup of coffee lol. btw, I made this cup of coffee and latte art by myself : )

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  Reference

  1. starbucks’ Active U.S. Loyalty Members Grow 48%

  2. Starbucks Brewing Revolutionary Web3 Experience for its Starbucks Rewards Members

  3. Starbucks details its blockchain-based loyalty platform and NFT community, Starbucks Odyssey

  4. Forum3

  5. Adam Brotman

  6. Andy Sack

  7. Brew by Intern

  8. Books by Howard Schultz