Starbucks announces plans to upgrade its existing loyalty program

For customers, Starbucks Rewards has always been an excellent incentive. You make a purchase at one of the shops, and you are rewarded with a free item or a discount on another buy. So far, the strategy is reaping rewards for the retail giant.

According to Starbucks's fourth-quarter earnings analysis, there are 24.8 million members in its U.S loyalty program, and 51% of its revenue came from sales to those members.

Now, Starbucks has plans to take things up a notch.

President and CEO of Starbucks, Kevin Johnson, revealed an update to the Rewards program during the Q4 2021 earnings call that was held on October 28. The change involves linking the coffeehouse's loyalty program with the rewards programs of other companies.

According to the company CEO, "Through blockchain or other innovative technologies, we are exploring how to tokenize Stars [and] create the ability for other merchants to connect their rewards program to Starbucks Rewards."

What does this mean for the customers?

The points (or "Stars") earned for each menu purchase would become a sort of currency that can be earned/transferred for use across companies or brands. He (Kevin Johnson) gave an example of a similar existing partnership with Air Canada where the airline's rewards members can link their accounts with a Starbucks Rewards account and earn points from both companies with purchases made at Starbucks.

"This approach will also serve as a foundation for a more aspirational concept for new, modern payment rails that align payment expenses with the value received by customers and merchants," Johnson added.

When can we expect the plan be implemented?

The plan would be set into motion by next year.

"Over the next year, you will see the first instance of this loyalty points exchange with other consumer brands," the CEO revealed.

Starbucks is also exploiting cryptocurrency to expand customer payment options after recent partnerships with PayPal and Bakkt – a cryptocurrency wallet provider. Customers can now reload their Starbucks cards with cryptocurrencies like Bitcoin and Ethereum by converting digital currencies to physical currency.

In the same Q4 earnings call, Skyrim also announced plans to increase wages by the summer of 2022.

Starbucks seems to be ending the year on a high note and is confident of carrying that momentum onto the next year.

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