Starbucks Odyssey—the beginning of the Third Place
When Starbucks launched ‘Odyssey’ in September of 2022, they didn’t just create an NFT loyalty program, they also took their first step towards building the ‘Third Place’—Starbucks’ vision for becoming the third place people spend the most time after work and home. With time spent in bars, movies theatres, malls, etc. declining, they see an opportunity to aggregate human value and in doing so, aggregate human time and attention along with it.
In the short term, the blockchain technology underlying the NFT program will gamify the customer experience by providing digital collectibles as a reward that can be earned, bought, sold, traded, and more. But in the long term what appears to be an incremental improvement in the customer experience will prove to be the building blocks of something much more ambitious. Not only that, if Starbucks truly wants to build a competitive ‘Third Place’, it will be looked back on as the strategic decision that made it all possible. Let’s take a look at why…
In order to be the third place people spend their most time, there’s a lot of value up and down Maslow’s hierarchy that you need to be able to provide, from entertainment to nutrition to romance and beyond. Coffee and groovy music are great, but Starbucks is a long way from providing such a broad spectrum of human experiences. So how do they get there? Not by launching dozens of individual products and services and doing it all by themselves. No, they’ll need to rely on partnerships. And that’s why they’ll need the blockchain.
The efficiency of database interoperability the blockchain provides will render every other means of partnering at scale to be completely non-competitive in achieving consumer value. When anyone can easily access and add value into the network you’ve created it becomes not only possible to craft rich, niche experiences; but efficient to do so. Meaning more and more partners join the network causing an individual’s participation to unlock more and more uniquely valuable moments. The result is a positive feedback loop of community members and value adders joining and growing the network exponentially.
Let’s demonstrate this with an example where as a Starbucks member, the more I fuel up on coffee, the cheaper I get to ‘fuel up’ at a partner’s EV charging station or with another partner’s selection of protein bars. Contributors are incentivized to join the network and capture my dollars and attention, while I’m incentivized to join and gain access to their exclusive experiences. Growth on one side fuels growth on the other and the openness of the blockchain lubricates the flywheel.
That’s a simple example but it should help paint the picture of what is possible. As well as how, even though the idea of transferrable identity that accesses valuable experiences across vendors is not new, current methods will never compete with the efficiency and scalability of doing it on the blockchain. They will also never offer true digital ownership, something increasingly important in today’s world.
In conclusion, I don’t see Odyssey as a cool feature or new loyalty program. I see it as the future of interoperable networks and human experience being built before our very eyes. And I’d bet that’s how Starbucks sees it too. Their metaverse is not virtual worlds and flashy avatars, it’s tangible human experience bolstered by blockchain technology and it’s grande exciting!