A UX Analysis of Starbuck’s Odyssey

It was announced last night that Starbuck’s would be launching a new application entitled “Odyssey” in conjunction with the Polygon blockchain. This much anticipated release marks a big moment in the crypto community which has long dealt with questions around utility and mainstream adoption. Below is my analysis of the release details provided (found here). The goal of this is to analyze early trends in blockchain based applications at scale and better understand the design and product decisions made by the Starbuck’s team.

What is Starbuck’s Odyssey?

Starbuck’s Odyssey is a new web-based application which will go live later this year. The goal of Odyssey seems to be testing a new approach to engaging and rewarding loyal customers using web3 technology and game theory. On Odyssey app members will have the opportunity to earn NFTs (which Starbuck’s is referring to as “Digital Collectible Stamps”) by competing in games or community challenges. It is not clear exactly what these challenges will be, but I suspect something along the lines of taking a picture in front of a store or showing off an at home brewing station. In addition to earned NFTs, limited-edition stamps can also be bought directly from Starbucks. Limited-edition stamps will feature “iconic” Starbuck’s themed artwork and donate a portion of proceeds to a charity. Stamps can be bought and sold on a marketplace hosted on the Odyssey app from peer to peer allowing users to convert reward points to cash from fellow members. All stamps will have a correlated point value and overtime points can be redeemed for experiences and prizes (such as trips and coffee making classes).

Design Choices Behind Odyssey

In learning about Starbuck’s Odyssey a few choices really stood out to me.

Onboarding

· Existing members will be able to connect their mobile rewards account to Odyssey

· New members will not be required to own a crypto wallet or currency

Onboarding new users is a massive pain point in web3. Figuring out wallet browser extension and understanding how private keys work and how to safely store is a barrier, full stop. With the decisions to host keys and make signing up for their dApp (decentralized application) easy, Starbucks could become a major force in onboarding new users to web3 and allowing many to earn their first NFTs. While custodial wallets (keys which are managed by a central party) are muddy waters in the crypto community, the fact of the matter is there was too much at stake here to risk private key management. By allowing anyone to make an account without first having a wallet, Starbucks is making it easy for users to engage with the core utility of the product, utility NFT ownership and peer to peer selling.

I speak from experience when I say that I do not think I would have ever started collecting NFTs had NBA TopShot not made it so easy to sign-up and buy my first. With that said, over time to truly create and utilize a decentralized ledger users will have to be empowered to manage and own their own assets, utilizing them outside the single application. Long term it will be interesting to see if Starbuck’s allows its users to interact with the rest of the Polygon ecosystem and if they will allow them to move assets to a self-managed experience. For now, I think they made the right decision in creating a seamless onboarding experience (what I would like to refer to as onboarding to web2.5).

NFT Utility

· Users can sell NFTs (stamps) in a peer-to-peer marketplace

· NFTs (stamps) accrue loyalty points which can earn access to special events and perks.

· Assets secured by the blockchain

Allowing users to monetize their loyalty and rewards within an ecosystem is an interesting experiment. While gift card marketplaces have existed before, seeing a brand help its members to monetize and exchange reward points feels new for a company the size of Starbucks. Allowing peer-to-peer communities to form and share in token gated events (IE you must be a collector to attend) is a good use of web3 technology and can be a powerful way for Starbucks to build loyalty long term.

A word of caution, by only offering a few select giveaways and potentially creating an over saturation of stamps available Starbucks could quickly see a devaluation of stamps and a community which becomes disinterested. Only by increasingly adding utility to the Odyssey project and leaning into the unique benefits it provides users over existing royalty programs can Starbucks see long term success on this experiment.

As far as security goes, member transactions will all be logged and secured on the Polygon ledger. Do you really need a decentralized ledger to monitor a closed ecosystem transaction such as this? Probably not, especially since most members will likely be happily connecting and sharing their existing member data within the app or will need to share personal data to redeem something such as a trip. While I am sure there has been some breach of the rewards app before (IE someone has figured out how to scam for free or infinite reward points) it probably is not to the scale where you would need a blockchain to monitor reward point accrual and redemption. While it is nice that they acknowledged the security benefits of a blockchain, ultimately ZK transactions and anonymity isn’t really a key selling point of this app to users.

Would I Use It? Does Odyssey Really Need NFTs?

I will cut to the chase and tell you I tried to sign up for the waitlist but was declined because I am not an existing Starbucks Rewards member…. That said I have a friend who I will try and get in through, so here’s to hoping. Living next door to a Starbucks I hardly go, in favor of supporting my local café. With that said, I am curious to see how they designed the application and will try out the free games and challenges to earn some novelty NFTs (who knows they may even be worth 5 cents one day). Ultimately this release feels a bit flat to me. While I am very excited about a new audience being incentivized to partake in web3, I am concerned that following a collectibles marketplace framework could fall flat as ultimately the “iconic” art and experiences are not valued all that highly. Starbucks does have a great brand though and has successfully built a mug collection series which many are passionate about, so if anyone can make this work at the enterprise level they are in as good as a position as anyone.

Long term I would like to see a few changes to the program. First, I think user generated content or ways of engagement should be a core piece of this market. Whether it’s coffee influencers or travel bloggers, figuring out how to help them monetize and sell through Odyssey can be a major piece of this product long term. Additionally, allowing independent coffee makers to sell loyalty programs on Odyssey and focusing on creating a marketplace for digital coffee assets beyond those made by Starbucks could help sustain the utility of the product long term. While it may seem counter intuitive, supporting small and local brands who can’t compete with the convenience and scale of a Starbucks is a huge opportunity for them to understand and reach the entire coffee community, and engage a new member such as myself who will never only drink Starbucks.

Lastly, I think a token makes a lot of sense to launch here long term. While I get why they support or recommend credit cards to start, I think a token supports this use case better. In my opinion members will eventually just math out the rewards if that is the only incentive collecting the NFTs. For example, say the grand prize is a trip to Seattle and a ton of swag. You could likely math this out to some dollar amount (IE $2000) and then say ok if it costs 20000 reward points to do this, the value of a reward point is $.10. Economics would say that you should buy any NFT that values a point below $.10 and sell any valued above that. Since the NFTs themselves don’t really carry value besides the art it will be a constant game of selling for above or below value. If you make the exchange just for “coffee token” however, you can avoid this as the tokens only have value to redeem and trade for coffee perks (further pushing why you would need an ecosystem of coffee asset creators beyond Starbucks to support all the perks needed to keep a flourishing market alive).

In conclusion, I think this is an interesting experiment. It is not a dApp in the true sense that these NFTs only have value in the Starbucks app, but ultimately a lot of people may own their first NFT through this and that’s cool. They have leaned into what I would call a web2.5 design for their application, and I am interested to see what traction and engagement on the platform looks like, as well as a future feature roadmap.