Coffee break
To:Brew Readers
Retail Brew // Morning Brew // Update
First-hand look at Starbucks’s Web3 loyalty program.
{beacon}
February 02, 2023

Retail Brew

Ware2Go

Hey there. This Valentine’s Day, for a small donation, zoos across the country—from Pennsylvania to Texas—will name a bug or vegetable after your ex and feed it to the animals. Some will even send you a video, which is a great response to your ex’s inevitable “thinkin bout u” text.

In today’s edition:

—Maeve Allsup, Jeena Sharma, Katishi Maake

TECH

Coffee people

A Starbucks cup coming apart against an abstract background Dianna “Mick” McDougall, Source: Starbucks

Starbucks has long had a large and loyal fan base, from PSL enthusiasts to secret-menu insiders. In November 2022, the company told investors that the Starbucks Rewards loyalty program had grown 16% in the last quarter alone, ballooning to 28.7 million active members in the United States.

But the coffee giant is taking loyalty a step further: In December, it began ushering eager testers into the beta version of a Web3 rewards experience called Starbucks Odyssey, which will integrate NFTs into the brand’s loyalty offerings.

Starbucks, as one of the first big brands to make a decisive move toward leveraging blockchain for loyalty, faces the problem of winning over both Web3 experts and a public whose interest in NFTs is still quite low. And the Odyssey beta, which is serving as a testing ground for the brand, highlights both the challenges and opportunities of being a first mover.

Into the jungle

After linking an existing rewards account to Odyssey, beta users chose an avatar and began working their way through groups of tasks called “Journeys,” which focus on different elements of the Starbucks ethos.

  • Completing tasks in a Journey (which could include virtually touring a Costa Rican coffee farm or passing a quiz about Starbucks history) earns users points and NFTs called “stamps,” which can be bought and sold on the Odyssey marketplace.
  • Points and stamps will eventually unlock exclusive benefits and experiences (though they don’t yet.) Starbucks says these could be virtual espresso martini-making classes, exclusive events, or even trips.

At the end of January, Odyssey had four Journeys for users to complete, focusing on brand history, sustainability efforts, coffee production, and the holiday season, respectively. A simplistic homepage (featuring your chosen avatar as a header) displays open and completed Journeys, acquired stamps, and a link to the stamp marketplace. Clicking on a Journey opens windows containing videos, quizzes, or games.

Not so fast: Despite the gamification of Odyssey, for some users, the experience hasn’t met their expectations.

Keep reading here.—MA

        

TOGETHER WITH WARE2GO

The SMB balancing act

Ware2Go

Running a small or midsize business (SMB) is a little like riding a unicycle…on a tightrope. You’ve gotta balance rising supply chain costs, uncertain market conditions, and a changing labor market, all without losing your cool.

Fortunately, the right fulfillment solution could make it a whole lot easier to succeed. That’s why Ware2Go, A UPS Company, conducted a study on the ultimate question: What do SMBs want?

Here’s the short answer: The future of supply chains is asset-light. SMBs are vying for more flexibility, scalability, and connective technology, without the capital investment of traditional enterprise-grade solutions.

Check out the Future of Fulfillment data study to learn how to build a more resilient and profitable (and balanced) supply chain.

E-COMMERCE

Check you out

Forever 21 online shopping Forever 21/Bolt

Forever21 is bolting away from its old ways to embrace a new online checkout technology through a partnership with fintech company Bolt.

The key piece of the tech is a one-click checkout solution that allows its online customers to skip certain steps and check out with, well…one click.

“If you look at a normal checkout, you go into your cart, create an account, a username and password, and once you do that, you then have to go through and fill out the steps,” Jacob Hawkins, chief marketing, digital, and omni officer at Forever 21, told Retail Brew. “It ends up being a five-step process. The nice piece with this is literally you go on…you’ve already created all your information there. You select your ship, [and] your default billing information pops up, and you’re right through it in one click. So it just abbreviates the process dramatically.”

  • Hawkins also told us the checkout rate for a Bolt account was 63% compared to a 40% checkout rate for a guest account.

“The other piece that we love is…[our customer] can check out and actually see 43 seconds off of the checkout time, which is just an eternity score for our customers,” he explained.

A key factor that prompted Forever21 to revamp its e-commerce strategy was “customer centricity” for its core customer base: Gen Z. “We have to make it easy for them to find it and purchase it, so just as we were looking at, ‘How do we speed up the process…once they found [the product]? How do we help them purchase it?’” Hawkins said.

Hawkins declined to disclose the impact on online revenue, but said it was “significant.”

Keep reading here.—JS

        

SWAPPING SKUS

Today’s top retail reads.

TikTok famous: Food brands that have gone viral on TikTok for one reason or another are getting their shot at the big leagues, as some are now found in Walmart and Target because of their virality. (Modern Retail)

Times have changed: When union campaigns gain traction in the restaurant industry, executives typically turn to the National Labor Relations Board for help, but it appears the agency is now less willing to play ball and interfere. (The Lever)

Make amends: This month, Net-a-Porter is introducing its first customer care and repair service, which connects users with a network of local tailors and seamstresses in the UK. It’s a fresh approach on circularity that the company has been gearing up to launch since 2020. (WWD)

WHAT ELSE IS BREWING

  • Peloton’s net losses shrank as revenue from its subscription service increased, but the company still failed to turn a profit.
  • REI laid off 8% of its corporate workforce amid rising uncertainty.
  • Subway’s late co-founder Peter Buck left his 50% stake to his philanthropic organization.
  • Kohl’s has eliminated 60 positions, mostly in its marketing and merchandising departments.
  • Mondelez, the maker of Oreo, expects not to raise prices as much as it did in 2022.
  • Bed Bath & Beyond will close 87 more stores.

NUMBERS GAME

The numbers you need to know.

Tackling last-mile delivery is a difficult feat for most retailers, which is why it’s common for it to be outsourced. But some data suggests that even doing that comes with its own headaches.

A vast majority (84%) of retailers claim they would like more control over their logistics network, while 66% expect their budgets for last-mile delivery technology to grow over the next five years, according to survey data from logistics platform FarEye.

  • Slightly more than half (55%) of retailers are focused on delivery cost reduction over the next half decade.

“For retailers that do not have the scale for their own fleet of drivers, outsourcing their delivery networks is the most cost-effective way to deliver with flexibility; however, the tradeoff is less control,” Stephane Gagne, VP of product at FarEye, said in a statement.

Since 2020, last-mile delivery has evolved dramatically but proven to be more expensive, inefficient, and unsustainable. However, 57% of retailers said they have outsourced their delivery networks over the past five years.

The top factors contributing to last-mile delivery costs include: fuel (59%), address location (39%), labor (36%), and first delivery failure (34%). Only 44% of retailers reported that all or almost all of their deliveries are made on time today but, retailers have a goal of increasing that rate to nearly 70% in 2027.

  • Plus, 35% of retailers reported offering same or next-day delivery now, and 64% aim to offer it by 2027.

“Instead of speed, retailers should consider improving the reliability of orders through AI and machine learning technology that will help them route orders accurately and efficiently, and ensure carrier allocation and capacity levels match demand,” Gagne said.—KM

SHARE THE BREW

Share Retail Brew with your coworkers, acquire free Brew swag, and then make new friends as a result of your fresh Brew swag.

We’re saying we’ll give you free stuff and more friends if you share a link. One link.

Your referral count: {{profile.vars.referral_count}}

Click to Share

Or copy & paste your referral link to others:
morningbrew.com/retail/r/?kid={{profile.vars.referral_code}}

         

Written by Maeve Allsup, Jeena Sharma, and Katishi Maake

Was this email forwarded to you? Sign up here.

{if !contains(profile.lists,"Marketing Brew") || !contains(profile.lists,"Future Social") || !contains(profile.lists,"CFO Brew") || !contains(profile.lists,"HR Brew") || !contains(profile.lists,"EmTech Brew") || !contains(profile.lists,"IT Brew") || !contains(profile.lists,"Retail Brew") || !contains(profile.lists,"Healthcare Brew")}

Take The Brew to work

{/if}
    {if !contains(profile.lists,"Marketing Brew") || !contains(profile.lists,"Future Social")}
  • Marketers: {if !contains(profile.lists,"Marketing Brew")} Marketing Brew   {/if} {if !contains(profile.lists,"Future Social")} Future Social {/if}
  • {/if} {if !contains(profile.lists,"CFO Brew") || !contains(profile.lists,"HR Brew")}
  • Corporate: {if !contains(profile.lists,"CFO Brew")} CFO Brew   {/if} {if !contains(profile.lists,"HR Brew")} HR Brew {/if}
  • {/if} {if !contains(profile.lists,"EmTech Brew") || !contains(profile.lists,"IT Brew")}
  • Tech: {if !contains(profile.lists,"IT Brew")} IT Brew   {/if} {if !contains(profile.lists,"EmTech Brew")} Tech Brew {/if}
  • {/if} {if !contains(profile.lists,"Retail Brew")} {/if} {if !contains(profile.lists,"Healthcare Brew")} {/if}
{if !contains(profile.lists,"Daily Business") || !contains(profile.lists,"Money Scoop") || !contains(profile.lists,"Money With Katie")}

Get smarter in just 5 minutes

{/if}
    {if !contains(profile.lists,"Daily Business")}
  • Business News: Morning Brew
  • {/if} {if !contains(profile.lists,"Money Scoop") || !contains(profile.lists,"Money With Katie")}
  • Money & Career: {if !contains(profile.lists,"Money Scoop")} Money Scoop   {/if} {if !contains(profile.lists,"Money With Katie")} Money With Katie {/if}
  • {/if}

Business education without the BS

Interested in podcasts?

  • Check out ours here
ADVERTISE // CAREERS // SHOP // FAQ

Update your email preferences or unsubscribe here.
View our privacy policy here.

Copyright © 2023 Morning Brew. All rights reserved.
22 W 19th St, 4th Floor, New York, NY 10011
Stay up to date on the retail industry

All the news and insights retail pros need to know, all in one newsletter. Join over 180,000 retail professionals by subscribing today.