Starbucks is joining in on the cryptocurrency and non-fungible token (NFT) hype with a collection of NFTs that will function similarly to their current Starbucks Rewards loyalty program later this year. NFTs serve as a way of digitally verifying the ownership and authenticity of a given item, from art pieces to the first ever Tweet. In theory, someone could easily forge a fraudulent Starbucks Rewards card or even hack into a user's loyalty account. However, the use of NFTs make fraud and scams significantly more difficult. While it is possible to use NFTs to back physical items of high value, the technology has been primarily used to secure digital assets thus far.
NFTs are backed by the blockchain, which a technology that has been in development for decades, and has uses far beyond the scope of cryptocurrencies and collectibles. It is the same network that supports popular cryptocurrencies like Bitcoin, and tracks the movement of the coin across users and digital wallets. The blockchain stores interconnected data that is difficult to hack, and in the realm of cryptocurrency and NFTs, it validates the ownership and authenticity of the item. Data is encrypted and layered with each added block, so each sector can be individually validated. For this reason, it's easy to see who currently owns an NFT, who has previously owned it, and whether it is authentic. Starbucks is now looking to use that same technology for its membership and loyalty program.
Starbucks plans to launch its own collection of branded NFTs later this year that have unique membership and loyalty benefits connected to them, the company said in a press release. It offered no specifics on what these collections might look like or what rewards could be tied to ownership, as it only noted they would be based on "coffee art and storytelling." The NFTs will both pay homage to the company's history — it began with a single store in Seattle, and has since become a nationwide brand — and create new imagery. The company says that it will likely use the multi-chain form of blockchain in an effort to continue to be environmentally sustainable, since it is known that cryptocurrency and NFTs can have dangerous effects on the environment.
Here's What The Program Might Look Like
Though the company didn't reveal much with its introductory statement, a quick look at the history of Starbucks might reveal more about its plans for a collection of NFTs. The coffee and tea merchant became one of the largest in the U.S. by establishing a brand worth more to consumers than just a single cup of coffee. For years, Starbucks has enticed people with unique designs in their stores and on their physical products. They sell a variety of gift cards with custom art, from limited edition Chinese New Year cards to gift cards featuring pop stars on the front. Starbucks also has a line of mugs, tumblers and water bottles that display art, including a 'You Are Here' series highlighting designs of big cities and iconic locations. While it's not clear what exactly a Starbucks NFT might look like, customers should expect similar art and designs to those found on its current physical products.
The membership and loyalty programs touted in the NFT announcement are likely to be similar to its current Starbucks Rewards program. The company currently has an app that gives each user a membership card — both digitally, and with physical cards — for use at their retail stores. Customers earn 'stars' for eligible purchases, and qualify for certain free items, like an annual birthday reward. The accumulation of stars can eventually be redeemed for items as small as an additional shot of flavor or as large as a full drink or sandwich. The collection of Starbucks NFTs figure to blend its existing brand with its successful Starbucks Rewards program in a new experience for customers.
Source: Starbucks