😳 Starbucks Web3 Misstep: Key Lessons for Brands

🎣 w3.catch-of-the-week cw12

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Vicktoria Klich & Quinn Wilhelm
March 22, 2024

GMGM and welcome to the 🎣 w3.catch-of-the-week, where we dig through the digital sandbox to bring you the gold nuggets under the flood of memes.

To explain (simplified) for anyone who wasn't on Twitter last week: Last week, "influencers" or accounts with some reach started creating their own memecoins and then publicly posting on Twitter their Solana address and asking for funds.

🤯 The result was more than $150 million in funding raised across 27 presales and even the co-founder of Solana called for a stop.

But those weren't the only alarming headlines last week...in this episode you'll learn what you need to consider to effectively use Web3 technologies.

😭 Starbucks shuts down Odyssey
🤑 World’s largest pension fund looking into Bitcoin
💸 Tokenization Fund by Blackrock
💃 How Paris Hilton leverages the Power of Web3
🪂 Why is every Crypto Project doing Airdrops?

The End of Web3 Loyalty - What happened to Starbucks?

Like all good odysseys, Starbucks' NFT-based Odyssey seems to be coming to a dramatic end. This week, Starbucks announced that the Starbucks Odyssey will conclude on March 31st. They said it "must come to an end to prepare for what comes next as we continue to evolve the program."

NFTs will never “die” 😶‍🌫️

Even though Starbucks wants to end the journey, the NFTs associated with the campaign, technically, can't end. They will live forever on the blockchain. Starbucks mentioned that the Stamps (NFTs) will now be traded on Nifty Gateway instead of their own marketplace.

Why is it Ending? The reason for ending seems to be the lack of adoption. Starbucks hinted at future plans by saying, “we look forward to bringing these learnings to a broader audience.” Another sign was the last collection not being sold out.

Some Facts About the Journey:

  • Launched: December 8, 2022

  • Volume: $3.4 million

  • Collections: 27

  • Discord Members: 15,000

Starbucks built on top of their existing loyalty program with about 31 million members. About 58,000 people participated in Starbucks Odyssey, reaching 0.187% compared to the traditional loyalty program.

What Can Brands Learn? ✍️

  • Enhanced Engagement: Rewards like free coffees, personalized merch, or a trip to a coffee farm in Costa Rica were fitting and made sense. 👉 It must remain authentic

  • New Revenue Stream:

    • Demand was generated, with NFTs traded for over $2k at peak times.

    • Through royalty fees (7.5%), Starbucks continued to generate revenue beyond the initial sale.

Some more benefits Web3 based loyalty programs can have for brands:

  • Interoperable: Points can be used across different brands, making them more flexible.

  • Safe and Clear: Blockchain keeps track of everything transparently and securely, reducing fraud.

  • Direct Rewards: Users can get rewards straight into their digital wallets.

  • Personal Offers: Allows for rewards and offers tailored to what customers like, based on their actions.

  • Building Community: Encourages a strong community by rewarding people for their loyalty.

Critique: The program was criticized for being only B2C and incentivizing customers to buy more, neglecting C2C contact and community building.

An active participant in the program expressed the following criticism:

💅 My take: Starbucks Odyssey saw strong interest from the Web3 community but failed to activate a wide audience. New activations through gamified elements were cool, but not engaging enough, with a lack of focus on community building.

However, being in Web3 allows other projects to activate Starbucks NFT holders. Like you can see here.

$1.5 Trillion Pension Fund Plans to Invest in Bitcoin

Japan's biggest pension fund is thinking about putting some of its money into Bitcoin. This is a new idea for them and they stated that they will explore investments in “illiquidity assets,” including forests, farmland, gold and bitcoin.

👉 The decision will be based on the information received by the deadline of April 19, 2024.

Japan is not the first to think about putting pension money into Bitcoin. South Korea's National Pension Service and the Houston Firefighters' fund have already bought into crypto.

A survey showed that 94% of all government pension funds have some money in cryptocurrencies 👀.

The increasing demand from traditional investors can be attributed to Blackrock CEO Larry Fink, who started promoting Bitcoin on television almost every day.

Blackrock introduces Tokenization Fund

Speaking of Larry Fink and Blackrock, the asset manager has introduced a new fund called “BUIDL”. This fund uses the Ethereum blockchain, making it the first time BlackRock has issued a tokenized fund on a public blockchain. It was first registered in the British Virgin Islands.

The starting investment for the fund is $5 million, higher than the $100,000 minimum mentioned in its SEC filing. BlackRock is working with Bank of New York Mellon to take care of the fund's assets and administration, and also with Securitize Markets, LLC, a company registered with the SEC, to help with the tokenization process. Read more about it here.

Paris Hilton x Roblox: A Metaverse Success Story

In August 2023, Paris Hilton launched "Slivingland" on Roblox, and it was a big deal! Her world became very popular and helped Paris make $60 million from what is called "earned media ad equivalency."

That's a fancy way of saying the attention and advertising value she got for free because people were talking about Slivingland a lot.

Roblox is a huge virtual world where people hang out online, and in 2023, it had more than 71 million daily users, with nearly 50% of them being young folks from Gen Z.

What Happened?

Paris's Slivingland was visited by over 3.4 million users, which is a lot! She even sold almost 500,000 emotes (1 Emote is roughly $1.2).

👉 Emotes are special animations that players can use to express themselves in the game.

Why It's a Big Deal

Paris Hilton's success on Roblox isn't just cool because she made some money. It's also important because it shows other brands what's possible in virtual worlds like Roblox. Brands can do a lot of cool things on Roblox, like:

  • Get more people to know about their brand.

  • Talk directly to young people who might not watch TV or see ads in other places.

  • Make games and events that get people excited about their brand.

  • Sell virtual items that people in Roblox can use.

  • Be creative with ads in new ways that aren't possible on other platforms.

Why Brands Should Pay Attention

Roblox isn't just a bout gaming, it's like a new kind of social media where brands can do new stuff. With so many people, especially young ones, spending time on Roblox, brands have a chance to connect with them in a fun and interactive way. Whether it's making a virtual world like Paris Hilton or doing something totally different, there's a lot of room for creativity.

Conclusion

Paris Hilton's Slivingland on Roblox was a smart business move that showed how the virtual world can be a powerful tool for brands. Already 400 brands have seen an exciting platform in Roblox and have designed an activation there.

🪂 What are Airdrops?

Discover the power of Airdrops with Token Engineering Expert Angela:

👉 Airdrops are the distribution of free tokens directly to users' digital wallets, often used to promote a new cryptocurrency or blockchain project.

👉 They can be effectively used to increase project awareness, incentivize community building, and reward early supporters or adopters of the platform.

Next Monday, the DeSci Community will join us at w3.hub. Murad Sattarov from Welshare Health will give us a brief deep dive into why this sector is so hot right now... 🧬

This is the only spirit for three weeks

Vicky & Marvin are Web3-obsessed. That's why they host a weekly podcast featuring updates and cool stuff.

Don't miss out on any news, updates, & vibes anymore. Discord is so yesterday. Let's meet on Telegram.