Starbucks NFTs Are Selling for Thousands of Dollars
The roaring crypto bull market of 2021 attracted even some of the most established brands. Starbucks is one of the mainstream companies to hop onto the NFT craze by launching its own NFT collection and ecosystem, with the hope of profiting from renewed NFT buzz while also leveraging the ecosystem for customer engagement and loyalty.
However, the crypto market plunged in 2022 with market prices plummeting and some of the most respected crypto and NFT brands winding up their business or declaring bankruptcy. A lot of the NFT projects that sprouted during the heady days of the crypto boom were abandoned or saw a downward spiral that wiped out most of their value. Year-over-year NFT sales in 2022 plunged a whopping 83%.
Amidst the crypto doldrums, Starbucks launched an NFT project in December 2022 dubbed Starbucks Odyssey.
Starbucks Odyssey is an extension of the company’s rewards program and allows holders of the NFT to earn various perks when they buy coffee and complete a number of online games and quizzes. Starbucks describes its NFT experience as “revolutionary” and as a “next-generation loyalty program model.”
The Starbucks NFT program had a beta launch in December 2022 and since then, it has already grossed a handsome amount. There has been more than $200,000 worth of sales. NFTs in the Starbucks Odyssey collection that cost users roughly a few cups of coffee now go for as much as $1,900 in aftermarket sales.
The Starbucks NFT program has attracted many NFT enthusiasts and generated some good chatter on social media channels. Many see it as a practical crypto project that could bridge the gulf with the mainstream. The Starbucks Odyssey has even had rare praise from Bank of America which hailed it as an NFT project that is “more holistic” than the previous NFT forays that did not build much value and utility into their collections.
A new batch of 2,000 Starbucks NFTs released early this month and going for $100 apiece sold out in a matter of minutes and momentarily crashed the website. Buyers of Starbucks’ NFT collections have also been sharing their scoops on social media channels, further driving the popularity of the collection.
In spite of all this hype, it’s too early to conclude that Starbucks’ regular customers will hop onto its NFTs and integrate them into their coffee habits on a daily basis.
Starbucks is currently promising future perks and rewards in its NFT program, aiming to attract wider less tech-savvy audiences. At the moment, the program is focusing on the early adopter crypto community.
Starbucks isn’t even calling its NFTs ‘NFTs’, replicating a trend by many mainstream companies keen on integrating NFTs into their business processes and solutions without the jargon and baggage. Most Starbucks NFTs aren’t even hosted on the blockchain. Customers can collect the NFT stamps by performing a number of tasks such as passing a quiz with coffee and Starbucks trivia or ordering two drinks with non-dairy milk.
The stamps are subsequently stored in the Starbucks Rewards accounts of the users. Starbucks recently launched the option of purchasing some stamps directly so users don’t necessarily have to earn them by completing tasks.
The adoption of Starbucks’ NFT program is currently being driven users who love both cryptos and Starbucks. Owning the NFT is a fairly seamless process. The credit is automatically loaded into the NFT program when a user enters a store and complete task like buying a bag of coffee beans.
Users that complete tasks and show brand loyalty earn the Starbucks NFT through a fairly seamless process. This utilitarian aspect gives the NFT a built0in value. However, the rise in the value of the Starbucks NFTs in the secondary market is attributable to the discovery of the program by NFT enthusiasts, many “orphaned” by the previous NFT flops, who see value in the Odyssey program and are betting on it to appreciate in value thanks to the range of utility built into the collection.
The value of an NFT is derived from scarcity and utility. Starbucks wants to leverage both of these traits to ramp up the value of its NFTs.
Only 5,000 editions of Starbucks’ first NFT, a Holiday Cheer stamp were issued. The company is yet to announce the perks of owning these stamps but earlier reports stated that these NFTs will provide holders with exclusive benefits such as trips to coffee farms in Costa Rica and martini-making classes.
Many NFT investors pumping their money into this NFT, which is already selling for as much as $1,000, are betting that its value will only go up in the future as the yet-to-be-announced perks of owning one are announced and gradually rolled out.
At these prices, Starbucks is obviously netting a tidy sum from the sales of its NFTs. However, the current robust trading activity does not necessarily imply that mainstream Starbucks customers are embracing them. There are hoops that one passes through to join the program and while seasoned NFT/crypto programs will have no problem navigating this, it may scare away people who are still unfamiliar with the concept of NFTs or cryptos.
Starbucks has been trying to streamline and simplify this process to make it easier for new users to sign up. It created a more streamlined signup process via the NFT marketplace Nifty Gateway where users don’t necessarily have to create a crypto wallet or memorize a seed phrase for security.
However, users’ stamps are still not as secure with this system and tend to disappear entirely when the program is shut down.
Mainstream adoption is still slow. Some early adopters said the Starbucks program felt like a gimmick and they lost interest in it relatively quickly. Even many of the Starbucks baristas aren’t aware of the NFT program according to a TIME report.