Blending the World’s Most Successful Loyalty Program With Web3

With about 60 million memberships worldwide, Starbucks Rewards is the most successful loyalty program in retail, driving about 50% of its business. It is fair to say each time a customer gets a free latte with their Starbucks stars or orders a drink on the app, the credit should go to Adam Brotman.

Starbucks' then-chief digital officer, Brotman led the design of the mobile order and pay system and built its rewards program, which launched in 2009. Then he left Starbucks in 2018 for a brief stint as president, chief experience officer and co-CEO of retailer J.Crew.

Brotman fell down the crypto "rabbit hole" in Jan. 2021, when he studied blockchain technology and everything Web3 with venture capitalist and serial entrepreneur Andy Sack. That was when he stumbled on non-fungible tokens (NFTs), which he described as a "terrific, innovative tool for brands."

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NFTs “can be a storytelling mechanism because of the metadata you can put in it that can be branded. It can have a rarity curve that gives you all of the surface areas for storytelling and brand building. But because it's collectible there is a digital asset that can also form a sense of identity, you can get community and you can also get utility out of it," Brotman told CoinDesk. In Aug. 2021, Brotman and Sack co-founded Forum3, a Web3 loyalty startup to advise retailers.

By this time, Starbucks’ founder Howard Schultz, who has come back twice to lead Starbucks, was at the helm again as interim CEO. He was curious about the Web3 loyalty concept and upon discussing with Brotman became convinced it would be a powerful way to innovate on Starbucks’ customer engagement and loyalty.

This September, Starbucks officially announced the concept of Starbucks Odyssey, a rewards program allowing customers to purchase and earn digital collectible stamps – aka NFTs – that offer benefits and immersive experiences. The company opened a waiting list to gauge interest. In early November Brotman said he and Starbucks are "pretty excited about" the number, but declined to disclose what it was.

"They wanted to have a separate brand but also a brand and a name that would evoke the idea of the romance and fun of going on journeys and collecting stamps in your passport and whatnot. So a lot of the nomenclature for Starbucks Odyssey is built around the game itself and the experience itself, which is an extension of the rewards program," Brotman said.

Now, Brotman and his team are working closely with Starbucks on the Starbucks Odyssey, which is expected to launch this month. With Starbucks as only Forum3’s third client, Brotman hopes to work with hundreds of brands over the next year. Even though the public's passion for NFTs has cooled, for Brotman the speculative nature of the asset was never his main interest.

"I'm just as excited now as I was then [the first time he knew about NFTs] because it was always about the combination of collectability and brand engagement that got me excited. So that excitement hasn't changed at all," Brotman said.