Walmart VS Starbucks — How Would Multinational Giants Bring Web3 into Mainstream

Web3, known as Internet of the next-generation, is like a light in the dark, setting off a wave of participation of traditional brands. If the platformization of Web2 allows users to have more choices so that operators can find target users more accurately, then Web3 based on blockchain technology fundamentally reconstructs the production relationship and organizational form. Naturally, multinational business giants with a keen sense will not miss out on capturing the early industry opportunities of Web3 and continue to expand their business territory.

Next, let’s take a look at how these two multinational giants — Walmart and Starbucks — brought Web3 into the mainstream.

Bitcoin may be the greatest winner of Walmart lays out cryptocurrency

At the recent Yahoo Finance Global Markets Summit, Walmart’s Global CTO Suresh Kumar announced a plan to incorporate cryptocurrencies into an important payment strategy in the future, where all physical and virtual goods sold by the Walmart Group can use cryptocurrencies to make a payment. “Cryptocurrencies will become an important part of how customers transact,” predicted Suresh Kumar.

So what exactly is driving cryptocurrencies to become a payment method that people are happy to use? I believe this is inseparable from Walmart’s warm embrace of the Metaverse. Walmart found that consumers spend a lot of time in the virtual world and are very interested in many emerging virtual goods, such as buying virtual avatars, which provides a great use for cryptocurrencies such as Bitcoin.

After clarifying the goal, Walmart began to fully deploy the Metaverse. In September, Walmart launched two new immersive experiences on the Metaverse gaming platform Roblox, Walmart Land and Walmart’s Universe of Play, offering customers unique interactive content and entertainment. As we all know, Roblox is the world’s largest multiplayer online creative game, and the active participation of a large number of users has stimulated Walmart’s strong interest in this emerging field.

Not only the Metaverse, but social media is also bringing the gap between e-commerce and cryptocurrencies (including NFTs). Customers who bought NFTs from online platforms are eager to share on social media, and social platforms such as Facebook and Instagram can fulfill their desires. Users can link virtual wallets containing NFTs to their social media accounts, and the wallets may contain other cryptocurrencies in addition to these NFTs. As Suresh Kumar mentioned in his speech at the Global Markets Summit, cryptocurrencies are everywhere and they are thinking what their customers are thinking.

Walmart said the popular social media business model has inspired the company to rethink payment methods. To this end, Walmart made an attempt to keep pace with the times, and successively tried live-streaming sales activities on platforms such as Twitter, TikTok and YouTube. Through live delivery, Walmart found that it was a great way for customers to learn about new products and the method to use them. Not only that, by watching online live broadcasts, users can easily be motivated by a strong desire to buy, and cryptocurrency is a very convenient tool for customers to pay online. Not only that, but Walmart’s brick-and-mortar stores have recently been spotted with Bitcoin ATMs and plans to launch its own NFTs and crypto tokens, all the signs showing that the company wants to make a big splash in the crypto space.

Despite the full backing of big retailers like Walmart, cryptocurrencies could see a surge in gains, with bitcoin likely to be the greatest winner. But it’s worth noting that Suresh Kumar only mentioned the Metaverse and social media, but Walmart seems to be still figuring out how to incorporate cryptocurrency into their Metaverse and social media strategy. While Suresh Kumar mentioned that cryptocurrencies could become a payment option, he did not say that Walmart would start accepting bitcoin right away. So investors also need to be careful not to be misled by the headlines on social media.

Can Starbucks drive mass adoption of Web3?

I believe that many crypto enthusiasts have imagined such a scenario — come to a coffee shop, and order a cup of coffee at will, then pay with cryptocurrencies very naturally. Excitingly, that wish may soon come true, as Starbucks is already working on it.

Recently, the coffee chain giant announced that it will try to use Web3 technology to build and launch the Starbucks Odyssey “Odyssey Blockchain”, where members will be able to earn and purchase digital collectible NFTs to experience immersive coffee.

According to Starbucks’ latest announcement, the Starbucks Odyssey project is still in progress, so full details cannot be released for the time being. Yet such a revolutionary decision alone is inspiring enough. It can be said that Starbucks has set an example for many traditional companies today, and they have really promoted the adoption of Web3 technology, not just as a marketing gimmick. Let’s take a look at how exciting Starbucks’ Web3 project is.

As we all know, Starbucks has always had its own loyalty program, and this program is arguably the most successful one in the world, with nearly 60 million rewarding customers worldwide, and 30 million in the United States alone. Loyalty programs include incentives, extended sales, customer personalization, etc., contributing nearly half of Starbucks’ total revenue. And Starbucks Odyssey acts as a complement to the program, not a replacement, with the goal of giving the most loyal customers a wider range of rewards.

Frankly speaking, it is a very risky thing for Starbucks to abandon the previously very successful traditional reward program and challenge the Web3 reward program. After all, there are many uncertainties in this new technology and NFT project. In fact, we can think of Starbucks Odyssey launched by Starbucks as an additional reward program, an option to supplement the existing reward program, so as to minimize the risk of failure of the new program. Once there is a problem with the Web3 project, Starbucks will not be helpless, and can deal with it very flexibly in the future.

The reason why Starbucks Odyssey can become its current main promotion project is inseparable from the consumer group research they conducted in the early stage. According to statistics, Starbucks’ largest customer group is millennials aged 25 to 40, whose consumption accounts for 50% of the company’s total business, followed by young people aged 18 to 24. With the continuous rise of “Starbucks” brand recognition, they have to face a series of problems such as labor disputes, rising supply chain costs and labor shortages, so it becomes more and more important to retain this group of target customers. Survey statistics show that NFT, as an emerging technology, has earned enough attention from Starbucks target users, among which Generation Z (referring to teenagers born between 1995 and 2005) has rich investment experience and is most interested in NFTs. And millennials are the second most interested in NFTs.

From this point of view, Starbucks’ follow-up business development should be full of confidence.

Finally, we must say that Starbucks has adopted the most advanced user interface/user experience (UI/UX) in the design of this Web3 project, so that those who are new to NFT and blockchain can also feel comfortable. It can be said that Starbucks’ previous great success with mobile order and payment functions is partly due to the perfect UI/UX design.

In fact, this time Starbucks’ Odyssey rewards program was created in conjunction with Forum3 co-founder Adam Brotman, who is the former chief digital officer of Starbucks. During his time at Starbucks, he led the work related to the mobile order and payment system, reaching 50 million users around the world and becoming the second largest mobile payment APP in the US market. Based on this, the industry is very optimistic about the bold attempt of Starbucks Odyssey, and believes that in the future users can also get a good experience in the Web3 field.

On the other hand, because Starbucks blocked those obscure concepts in Web3 such as NFT, wallet, etc. during the promotion of this APP, users may not feel that they are participating in new technologies. Brady Brewer, Starbucks executive vice president and chief marketing officer, said, “The Starbucks Odyssey is built on blockchain and Web3 technology, but honestly, customers may not even know they are interacting with blockchain technology.”

Indeed, judging from the current state of Web3 technology advancement, Starbucks Odyssey seems to be one of the most promising cases at the moment. However, to fully tap the potential of Web3, Starbucks need to keep working hard.

Firstly, Starbucks must better manage speculation. I remember when the Odyssey plan was just announced, Starbucks said that the NFTs held by users could be traded in the P2P market. However, according to the experience of the Web3 game industry over the years, the characteristics of NFTs that can conduct P2P transactions will attract many speculators, which fundamentally changes the experience of loyal users, and this impact is usually negative. Therefore, if Starbucks is serious about providing a great experience for its users, it must mitigate the effects of speculation by creating its own marketplace and other mechanisms, while ensuring that the rewards program continues to provide the needed incentives.

Secondly, we must make full use of the underlying technology of Web3. The emergence of Web3 technology, especially blockchain technology, has made users the main role of asset custody, but the premise is that users must be able to interact with the underlying technology, which is exactly what the current Odyssey project lacks. It remains to be seen how Starbucks will handle user demand for features such as self-hosting in the future, and whether users will desperately need these features.

Last but not least, profit by launching demand-based NFTs. I believe that many users must be very happy when they receive free NFTs, but Starbucks cannot always be a loss-making business. Its ultimate goal is to become a profitable enterprise that can generate both direct and indirect income on the basis of recovering up-front marketing expenses. There is no doubt that Starbucks will benefit greatly once it has a firm foothold in the Web3 space. The market has proven that if an NFT is just an NFT without other subsidiary functions, it is difficult for consumers to pay for it. Therefore, Starbucks will face a daunting challenge in creating digital rewards.

They must design an effective digital rewards program to attract enough users, especially Gen Z users, so as to ensure a continuous revenue stream. At the same time, this is the only way to make the project sustainable and not disappear before the next emerging technology.

Looking to the future

In 2022, Web3 will bring long-lost excitement to the somewhat quiet business battlefield. Major consumer brands have bid farewell to traditional business models and moved to the new Web3 track.

Of course, Rome wasn’t built in a day, more and more consumer giants like Walmart and Starbucks are starting to get involved in the Metaverse and cryptocurrencies, which in itself is something to be excited about. Although it remains to be seen how Walmart and Starbucks will meet these challenges, one thing is certain, the behavior of these business giants in exploring Web3 will provide interesting and informative test cases for other enterprises to challenge Web3.

Once the new business model is highly recognized, Web3’s integration into the mainstream is just around the corner.

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(The above information is not intended as investment advice, this article only represents personal opinion)

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