How To Do Web3 Experiences The Right Way

Starbucks deserves plaudits for embracing Web3 technologies such as non-fungible tokens and the metaverse in its latest marketing push, but the company still doesn’t fully understand the merits of decentralization, to the detriment of the customers it’s trying to reward.

That’s according to a recent op-ed by Jack Vinijtrongjit co-founder and CEO of AAG, who states that while Starbucks’ approach to the metaverse is the correct one, its Web3 strategy is completely wrong.

The main problem with Starbucks’ Web3 strategy is that it has simply recreated the kind of “walled garden” that has become synonymous with Web2 under a different banner. In doing so, it has trapped its customers within its own ecosystem and denied them the opportunity to interact with other brands and experiences.

Starbucks announced its new Starbucks Odyssey experience in September 2022 and it made quite a few headlines as one of the first major retail brands to embrace the idea of Web3. But unfortunately, while Starbucks ight be using Web3 technologies, it’s not really providing the same kind of experience envisaged by proponents of the next-generation decentralized internet.

Jack Vinijtrongjit defines Web3 as an “open, decentralized, incentive-centric internet with emphasis on distributed ownership” that anyone can access. Within the world of Web3, participants have full control of both their data and their digital assets, and the ability to utilize these across multiple ecosystems.

It’s a definition that Starbucks clearly failed to understand, for its Odyssey experience doesn’t live up to those expectations. The basic idea with Starbucks Odyssey is that Starbucks Rewards members can access so-called “journeys”, which are a series of interactive games, challenges and quizzes, earning NFT-based rewards for completing them. These “journey stamps” are digital collectibles that unlock access to unique benefits and experiences, such as discounts on coffee, merchandise and holidays to its coffee farms in Costa Rica, among others.

As well as winning NFTs, customers will also be able to purchase limited edition tokens that provide similar benefits. There’s no need to use crypto either, as Starbucks only accepts credit card purchases – a move that’s designed to make the Odyssey experience more accessible, the company states.

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Certainly, the metaverse aspect of the Odyssey experience is on the right track with its gamified challenges, but the problem is that Starbuck’s NFTs are essentially useless outside of its own coffee shops, Jack Vinijtrongjit states.

A Closed Ecosystem Is Not Web3

Starbucks shoots itself in the foot by forcing customers to use its own NFT wallet and trade them on its own marketplace. These conditions also prevent customers from utilizing the tokens or redeeming their benefits anywhere else.

By doing so, it’s limiting customers to what is still a “Web2 experience”. It means that its NFTs are really just “vouchers” disguised as digital tokens for marketing purposes. Indeed, it could have used traditional vouchers linked to a database to provide the exact same benefits.

Starbucks’ approach would cause a great deal of complexity for consumers if every other retailer did the same thing. If brands like Burger King, KFC, Wal-Mart etc all offered their own, walled-garden style NFTs complete with their own wallets, it would mean people are forced to have dozens of different wallets stored on their smartphones, storing ‘fake’ NFTs that are worthless to anyone who isn’t a fan of the particular brand that minted it.

The Right Approach

While Starbucks might be able to retain ‘control’ of its NFTs with its walled-garden approach, the strategy means customers cannot realize the true benefits of Web3 and decentralization.

What Starbucks should have done is build its NFTs on an open and established blockchain network like Ethereum, Tezos or Fantom, thereby allowing users to keep their digital assets in the wallet of their own choice. Doing so would be far more convenient for users, allowing them to manage all of their NFTs in one place, but that’s not the only upside.

Rather, the real advantage of an open ecosystem is that not only Starbucks, but any business at all would be able to interact with its NFTs. This could create numerous opportunities and advantages, not only for coffee drinkers but for Starbucks itself. As Starbucks’ NFTs become more widespread and their value increases, they would attract the attention of other brands that may see the benefit of tapping into its large customer base. Brands could offer their own benefits to Starbucks token holders. In turn, that would increase the value of the Starbucks NFTs further, while generating more buzz around its brand name, creating a kind of virtuous cycle from which everyone benefits.

This is the true nature of Web3 and decentralization, and it’s what other brands must understand if their own Web3 strategies are to succeed.

Overall, Starbucks’ Odyssey marketing campaign serves as an example of how NOT to do Web3. Though the company has made onboarding much simpler, it also limits what its users can do to such an extent that Odyssey cannot really be described as a true Web3 experience.

If brands want to get their Web3 experience right and allow their customers to enjoy the real benefits of decentralization, they must first learn to embrace the concept themselves.

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