From Taco Bell to Applebee’s, NFTs, or non-fungible tokens, are cropping up in the food world. Although they have mostly been associated with collecting and trading digital art, brands have also been using NFTs to drive loyalty and engagement—somewhat like a new form of rewards points.
Though light on the details, Starbucks announced earlier this month that it was launching a collection of NFTs later this year. Ownership will allow access to exclusive experiences and benefits. Howard Schultz, the founder and interim CEO of Starbucks who is expected to stick around until this fall, went as far to say that NFTs have the potential to add new revenue streams. The CEO who succeeds him must have a good understanding of new business strategies, Schultz noted on a conference call with investors and analysts in early May. “Our customer base is getting younger, they’re digital natives, and they expect Starbucks to be as relevant outside of our stores as we are inside,” he said.
In December, Applebee’s rolled out a series of NFTs, where the owner of a one-of-a-kind digital image of a steak unlocks unlimited steak meals at the fast casual chain for free for a year. Domino’s and Taco Bell have also jumped into NFTs with promotions of their own.
The customer is always right
Food brands are still experimenting with NFTs, but what’s key is that brands want to be where the customers are and to understand their habits. If customers are spending time in AR or VR, then, as a consumer-facing brand, you want to have a presence in those technologies, even if right now it is experimental, said Ken Moore, the digital innovation officer at Mastercard.
Though there’s been considerable hype around NFTs, sales of them fell 92% in early May from a peak in September, the Wall Street Journal reported. When the dust settles, some aspects of the technology will stick around.
While it’s unclear how the business of NFTs will evolve, for food brands, it’s just another way to better understand customers. Loyalty points have long been used to attract and retain customers—as well as providing crucial information about how shoppers spend. “That’s the past,” Moore said. “These are just digital reinventions of these same things.”
Moore says that offering NFTs is just one step in an increasingly personalized customer experience. He suggested that in the next three to five years, you’ll be able to walk into a cafe and buy a cup of coffee, not just with fiat currency or crypto, but with solar credits. What’s new with, he added, is the ubiquity of buying something in the physical world that will unlock a digital message, as well as digital world purchases that grant VIP access to something physical—in other words, a more seamless transaction between the digital and physical worlds.