Smartphone displaying the Starbucks Rewards loyalty programme on its screen.
Image via Shutterstock

Non-fungible tokens (NFTs) are best known as digital collectibles that could be exchanged on online trading platforms for sometimes eye-watering amounts of money during the heights of NFT enthusiasm in 2021 and 2022.

During the boom, all sorts of use cases were imagined and experimented with, including using NFTs as a form of digital loyalty token. One of the most prominent brands to throw its weight behind NFTs in loyalty was Starbucks, which in December 2022 launched Starbucks Odyssey: an extension of its Starbucks Rewards programme that incorporated NFTs.

While Odyssey was held up as an innovative example of brand use of NFTs, it seems that the project has not been viable for Starbucks in the long term. On 15th March 2024, a little over 18 months after its launch in closed beta, the brand announced that it would be shuttering Odyssey by the end of the month.

It could be argued that Starbucks was simply too late to the NFT trend with Odyssey, given that the value of NFTs had already plummeted by the time of launch. Yet NFTs may have been just one part of a wider problem with Odyssey: too much complexity without presenting a compelling reason for consumers to engage more deeply with the brand.

“Simplicity is paramount” in successful loyalty schemes

At the beginning of the year, we spoke to Laura McGill, Head of Marketing at global promotions and loyalty firm Benamic, who opined on what makes a successful loyalty scheme.

“Customers want easy, seamless experiences that are engaging,” she said. “Simplicity is … paramount in a successful loyalty scheme. This involves providing an experience that’s easy to participate in and ensuring that the core message and value of the program are abundantly clear. Customers shouldn’t have to unravel complicated rules or requirements.”

I would argue that this was the key fault with Odyssey: the loyalty programme was too complex and its ultimate value unclear to the average consumer.

Starbucks’ core Rewards loyalty programme is a highly successful venture that has been held up as a model of food and drink loyalty programmes. Its premise is easy to understand: each dollar spent is rewarded with a star (with different currencies, the spend-to-star ratio can vary slightly) and stars can be exchanged for rewards such as custom drinks, bakery items and Starbucks merchandise.

Rewards are given for everything from cash purchases to Order & Pay Ahead, making it convenient for consumers to collect rewards however they want to pay.

“It’s a lot of hoops to jump through”: an odyssey of unneeded complexity

By contrast, Odyssey was a complex proposition. Participants in Odyssey’s closed beta could earn both Journey Stamps, i.e. Starbucks’ collectible NFTs, and Odyssey Points in exchange for engaging with the brand via purchases, watching videos, or taking quizzes. This meant that there were two separate loyalty currencies associated with Odyssey – one of which could also be sold and traded on an NFT marketplace, giving the Journey Stamps an inherent monetary worth.

However, Starbucks Odyssey members could also purchase the Stamp NFTs directly, and in so doing earn Odyssey Points – giving Stamps a role somewhere between loyalty currency, product, and reward.

The programme’s formal rewards included virtual classes, access to exclusive merchandise, and trips to a Starbucks coffee farm – rewards designed to be a step above the free and discounted coffee and baked goods offered by Starbucks Rewards. The rationale for this was that Starbucks Odyssey represented an extension of the Starbucks Rewards programme with more exclusive benefits, which would appeal to the brand’s most dedicated fans.

In a sense, the NFTs were simply another type of collectible merchandise for Starbucks uber-fans: but in that case, they would have served this role better as a pure reward. It’s difficult to discern the benefit that Journey Stamps added by also having them serve as a loyalty currency, and easier to pinpoint ways in which it made the scheme more complex and less intuitive.

There were misgivings about the scheme from the word ‘go’. Ahead of the launch of Odyssey, Fast Company highlighted that, “While it is certainly on-brand for the company to engage in experiential innovation, it is not clear if Starbucks has thought through the “why” behind this initiative.

“Too often, business leaders chase after the latest technology trend, without first asking what problem they want to solve for customers, and whether there is even a problem that needs solving.”

Or as a member of Odyssey put it when speaking to Forbes in October 2023: “I had to spend 20 minutes watching videos and then taking a quiz. … I’ve yet to complete a challenge because each requires an additional task, like visiting a location with a camera phone, or making $5 in purchases for several weeks in a row.

“It’s a lot of hoops to jump through. All people want is discounted/free coffee!”

The fact that Odyssey remained in closed beta throughout its 18-month lifetime and never opened to wider membership tells its own story, and perhaps indicates that the brand (wisely?) viewed the scheme as more of an experiment or proof of concept.

Could Starbucks have achieved more with Odyssey?

CoinDesk’s Jennifer Sanasie argues that Starbucks Odyssey had considerable potential to appeal to Starbucks super-fans who “collect the stars … buy the seasonal merchandise … visit the ship stores and … might even visit the Starbucks coffee farm” and that it was simply insufficiently publicised. But what would Odyssey offer these highly loyal fans that wasn’t already achieved by its core Rewards programme?

All of the potential benefits of Odyssey could arguably have been offered more simply via other means. If Starbucks’ goal was to offer NFTs, it could have done so via an NFT drop or by including NFTs as a Starbucks Rewards tier. If Starbucks’ goal was to give dedicated fans access to elite membership perks, this could be achieved through the higher tiers in its Starbucks Rewards programme.

As Fast Company highlighted, Odyssey as an initiative lacked a completely clear “why”, and without this, it’s hard to refute the notion that Starbucks was simply “chas[ing] after the latest technology trend”.

To give Odyssey its due, by all accounts, Starbucks succeeded in creating a tightly-knit community around the loyalty scheme. Speaking to TechCrunch on its Chain Reaction podcast in February, Starbucks Odyssey’s then-Community Lead, Steve Kaczynski, said, “I’ve seen that people who live in California in the Starbucks Odyssey community are really good friends with people in Chicago and they have met up in real life at times. This never would have happened if not for web3.”

Kaczynski also asserted that the programme’s 58,000 active participants, “aren’t mostly or all web3 native people … it’s not just web3 people who are participating,” thereby warding off any suggestion that Odyssey catered only to those already invested in NFTs and web3.

This wouldn’t necessarily represent a failure of the loyalty scheme, if it had converted these web3 enthusiasts into loyal, paying Starbucks customers. However, it would make it more difficult to refute the idea that Odyssey’s sole appeal was its access to NFTs.

Strong brand communities can offer myriad benefits, as outlined in Econsultancy’s Quick Guide to Community Strategy, which notes that a brand community can reduce customer service costs, provide customer insight, increase loyalty, and more. Starbucks’ promotion of Odyssey highlighted the programme’s potential to serve as a digital ‘Third Place’, “connecting our Starbucks Rewards loyalty program members not just to Starbucks, but to each other.”

If the goal of Odyssey was simply to create an online community space for Starbucks Rewards members, however, this again could have been achieved without incorporating NFTs. As it is, Starbucks has taken the step of shuttering the Discord associated with Starbucks Odyssey – showing that it has decided not to maintain the community, at least not in this form.

Will Starbucks continue its odyssey with NFTs?

Starbucks’ closure announcement for Odyssey left the door open for the scheme to be continued in some form, with the words,

“The Starbucks Odyssey Beta must come to an end to prepare for what comes next as we continue to evolve the program.”

It is possible that Starbucks intends to reflect on lessons learned from the programme and relaunch it in a new form, or perhaps incorporate it into Starbucks Rewards. The decision to close down the Odyssey Discord, as well as to incorporate the Odyssey NFT marketplace into Nifty Gateway (which powered the Odyssey marketplace), suggests that Odyssey will not be making a return in exactly the same form.

News from Starbucks Korea might give a hint as to the brand’s future plans: in January, Starbucks announced the launch of an NFT project named ‘STARBUCKS STAR★LIGHT’. This project is incorporated directly within Starbucks Rewards, and makes limited-edition NFTs available to customers who use mobile ordering to purchase a beverage that uses their personal cup, earning them an ‘Eco Stamp’.

These Eco Stamps can ultimately be exchanged for an NFT, although only one NFT can be earned per customer, at any rewards tier – meaning that customers who earn an NFT at the lowest tier will no longer be able to obtain further rewards through the programme.

While the new programme does draw a more direct link between loyalty and NFTs, its specific criteria may be a turn-off for some consumers. However, Starbucks is keen to foreground its sustainability credentials via the new programme, with Starbucks Korea CEO Ryan Sohn stating that, “Starbucks Korea will continue to introduce a variety of promotions to offer our customers an array of eco-friendly benefits.”

It remains to be seen whether the NFTs will act as enough of an incentive to drive meaningful behaviour change from consumers, but one way or the other, Starbucks has clearly not yet given up on NFTs.

Econsultancy runs marketing and ecommerce academies for international brands.