Starbucks bids farewell to NFTs

Written by: Wenda, Metaverse Daily

Recently, Starbucks announced that it will halt its NFT product, the Starbucks Odyssey program. The official website indicates that the program will end at the end of March, and users who hold NFTs can continue to trade on the Nifty Gateway platform.

Having come through a deep bear market in the crypto asset space, Starbucks has been a successful case of a physical brand entering the Web3 domain, skillfully engaging in Web3 digital marketing. Why has it suddenly decided to stop the Odyssey NFTs just as the crypto asset market is about to warm up?

Starbucks did not provide a specific explanation, only offering a vague response on the FAQ page of its website: "Starbucks Odyssey Beta must end to prepare for the next steps in our development plan."

In 2022, Starbucks Executive Vice President and Chief Marketing Officer Brady Brewer expressed great confidence in the Odyssey program, stating that "leveraging Web3 technology will allow our members to gain experiences and ownership that were previously unattainable." At that time, the crypto asset market was in a bear phase, but the floor price and sales of Odyssey NFTs continued to rise, with new experiential activities constantly being introduced.

After just one year, this program aimed at improving Starbucks' customer loyalty system has come to a halt. A review of related NFT prices reveals that the vast majority of the Odyssey NFT series are trading below their initial prices, which may be one of the reasons Starbucks decided to hit the pause button.

Starbucks is not the first traditional brand to exit the NFT market; gaming retailer GameStop and South Korean telecom company KT have also recently scaled back their NFT product offerings.

Most Odyssey NFTs Below Initial Price

Last Friday, Starbucks announced the end of its Odyssey Beta customer loyalty program.

When you open Starbucks Odyssey, if you still plan to join the program, a farewell message will pop up: "Starbucks Odyssey Beta will end on March 31, 2024." The page will then guide you to the Starbucks Rewards registration page.

Odyssey official page notifies that the program will end at the end of March

This means that the Web3 product Starbucks Odyssey, which was once aimed at improving customer loyalty, will terminate, and the years-long Web2 membership system "Starbucks Rewards" has shed its Web3 facade and returned to its original form.

As for the reason, Starbucks explained on the Starbucks Odyssey FAQ page: "Odyssey Beta must end to prepare for the next steps in our development plan." This explanation seems to hint that Starbucks is "working hard to provide a place for members to connect in the future."

What this future place entails remains uncertain, with some netizens joking on social media, "Could it be the metaverse?" Others speculate it might mean a "gaming system." Starbucks has not provided a clear response to these speculations.

For users who already hold Starbucks Odyssey NFTs, Starbucks stated that they can continue to trade on the NFT trading platform Nifty Gateway.

This well-known coffee brand began its foray into NFTs at the end of 2022, with the Odyssey program touted as an extension of the existing Starbucks rewards system, offering discounts to users who purchase coffee and other products in-store, increasing interaction, and providing rewards including NFT stamps and beverage-making courses. Lucky participants could even visit coffee farms in Costa Rica.

At that time, the Odyssey program launched a closed beta version on the Polygon blockchain, which quickly attracted attention from the Web3 market. To date, the Odyssey program has released 27 different themed series of NFTs, with the stamp NFTs generating a total sales volume of $3.4 million on Nifty Gateway.

In March 2023, the Odyssey program released its first limited edition NFT stamp, with 2,000 Siren Collection NFTs selling out in less than 20 minutes, causing the official website to become inaccessible due to high traffic; in August 2023, the "Green Apron" NFT series launched, rising 23% within 15 hours. It's worth noting that the NFT market was still in a deep bear phase at that time.

Both traditional industries and the Web3 space have been watching whether this traditional brand can improve physical business segments using Web3 technology and related products. Starbucks Chief Marketing Officer Brady Brewer had confidently stated that the program would bring "revolutionary Web3 experiences" to Starbucks members.

Now, as the crypto market warms up, why has Starbucks chosen to halt the Odyssey program?

According to overseas media Techcrunch, Starbucks community leader Steve Kaczynski stated that the NFT market may have significantly declined from its historical peak, and thus the company hopes to attract fans in new ways, with the brand and loyalty program still holding value.

Indeed, the floor prices of Starbucks' more popular NFT series are currently facing market downturns.

Most Odyssey series NFTs have fallen below their initial prices

A review of Odyssey NFTs reveals that, apart from the Siren series, other series of NFTs have dropped below their initial prices, with most prices shrinking by over 90%. This means that users who initially purchased and held Odyssey series NFTs are likely in a state of loss.

Moreover, NFTs obtained for free by users completing tasks have also seen their floor prices drop to single digits, failing to cover the costs incurred by users when completing those tasks, with some even being insufficient to buy a cup of coffee.

Starbucks is Not the Only Traditional Brand Pausing NFTs

It is undeniable that the Starbucks Odyssey NFT program was once seen as a textbook example of a Web2 brand entering Web3. Now, with the sudden termination of the program, it has caused quite a stir in the industry. Starbucks' exit is closely related to the overall slump in the NFT market.

Since February 2024, the crypto asset market has seen a general rise, with BTC (Bitcoin) reaching an all-time high, ETH (Ethereum) nearing its historical peak, and the surge in Meme and AI sectors bringing returns to many crypto asset investors, yet the NFT market seems stuck in a "winter."

CoinGecko reports that NFT trading volume in 2023 was less than half of that in 2022, dropping from $26.3 billion to $11.8 billion, a decrease of $14.5 billion quarter-on-quarter. Additionally, the total NFT sales for 2023 are approximately $8.7 billion, a reduction of 63.35% compared to $23.74 billion in 2022.

Real-time data from the NFT trading platform Blur shows that blue-chip NFT floor prices have generally declined, with the leading NFT series "Bored Ape Yacht Club" (BAYC) experiencing a continuous drop of 7% over the past week; Pudgy Penguins, LilPudgys, and Azuki have also seen declines of 10%-20%; the floor price of DeGods has even dropped over 40% in a single day.

The ongoing downturn in the NFT market has persisted for six months, with the "leader" BAYC dropping from 75 ETH to around 13 ETH, and the decline continues. KOL Bunny, who once firmly held BAYC, even stated, "The BAYC price chart makes me want to commit suicide."

The overall bleakness of the NFT market has caused many traditional brands that were initially optimistic about NFTs to waver. In addition to Starbucks, GameStop, social media platform X, Nike, and several other traditional brands have begun to scale back their NFT product offerings.

In February 2024, gaming retailer GameStop announced on its official website that due to regulatory uncertainties, it would gradually shut down its NFT market starting February 2, at which point customers would no longer be able to buy, sell, or create NFTs. Prior to this, GameStop had already canceled support for NFT wallets in November 2023.

GameStop is a publicly traded company with over 6,000 physical stores worldwide, which ultimately showed signs of fatigue after being impacted by the pandemic, suffering losses in both 2020 and 2021. In 2022, GameStop began shifting its focus to the crypto market, launching its eponymous NFT platform in July, which saw trading volume reach $2 million on its launch day.

The enthusiasm of crypto players allowed GameStop NFT to break into the market's top 10 rankings, but such performance did not last long. In the past month, the trading volume on the GameStop NFT website was only about $40,000.

Additionally, South Korean telecom giant KT will close its NFT platform MINCL on March 4, citing "changes in business conditions." According to the notice, NFT holders can transfer their NFTs to electronic wallets outside of MINCL, and after the service ends, users will no longer be able to view any remaining NFTs.

In January of this year, the social media platform X, led by Musk, also stopped supporting NFT avatars; the metaverse giant Meta had ended its NFT program as early as the beginning of 2023.

The halt of the Odyssey program may be related to the significant drop in NFT prices, and this program has been selling NFTs for less than a year, which roughly aligns with the meaning of "Beta (testing)." This Web3 marketing approach may have been just a one-year trial for Starbucks, which did not break the existing "Starbucks Rewards" membership system.

With traditional brands withdrawing and Web3-native blue-chip NFT projects struggling, the objective reality forces one to acknowledge that the darling of the last crypto bull market, NFTs, has fallen into a sluggish market environment. This blockchain application, capable of carrying visual information and enabling on-chain verification, urgently needs new scenarios to join.