Starbucks is conquering a huge challenge in retail — and even Apple and Chipotle should be jealous
Nov 20, 2015
Starbucks is pretty confident about the success of its mobile business. But, when everyone from Chipotle to Appleis jealous, you have the right to brag.
“I guarantee in the US there is no one else even close, as far as the number of mobile payments,” Starbucks CFO Scott Maw said on Wednesday at the Morgan Stanley Global Consumer and Retail Brokers Conference.
According to Maw, 21% of Starbucks transactions in the US are made using mobile devices.
Starbucks’ mobile strategy is part of an interlocking “digital ecosystem” that links Starbucks Cards, mobile apps, and, increasingly, partnerships with other companies.
More than a third of Starbucks transactions are made through either a digital “card” using the app or a physical Starbucks Card. Because Starbucks Cards allow customers to earn rewards relatively quickly, it is easy to get customers hooked on the chain’s loyalty program.
Today, Starbucks has 10 million active loyalty members in the US, up 28% from last year.
Starbucks, via The Motley Fool Starbucks mobile order and pay.
Starbucks’ loyalty program makes it an attractive partner for companies across a number of industries.
In October, Apple announced a partnership with the coffee chain, with plans to roll out Apple Pay as a form of payment at all 7,500 Starbucks locations in the US in 2016.
Through a partnership with Postmates, customers in Seattle can order and pay for Starbucks delivery using the app as part of a trial delivery program. Starbucks has signed deals with Spotify, the New York Times, and Lyft in which the companies purchase Starbucks “stars” that they can then use to incentivize membership and ridership.
In other words, not only is Starbucks’ mobile program already the biggest in the business. It is also part of a system that is starting to go far beyond the coffee industry, connecting Starbucks to digitally-focused companies such as Apple, Spotify, and Lyft.