Starbucks sees almost 100pc growth YOY in dollars loaded on mobile cards
Starbucks’ mobile strategy continues to gain momentum as consumers increasingly use the company’s mobile application for purchases.
In the third-quarter 2013, 10 percent of Starbucks in-store United States sales stemmed from mobile payments. Additionally, the company saw more than 30 percent year-over-year growth in total dollars spent in-store from My Starbucks Rewards in the U.S.
“Starbucks understands the importance of mobile from a global perspective, with Apps, mobile web, and consumer engagement,” said Marci Troutman, CEO of SiteMinis, Atlanta. “The way they approach mobile from a 360-degree strategy that they continue to refine does, indeed keep them as a front runner in mobile.
“Continuing to engage their consumers at a store level with new and innovative ideas like the their ‘on the go mobile delivery’ and the traction they are getting in China [ensures that Starbucks is a leader in mobile],” she said.
Ms. Troutman is not affiliated with Starbucks. She commented based on her expertise on the subject.
In Starbucks’ third-quarter fiscal year 2013 earnings conference call, company executives discussed the importance of mobile.
Chief Digital Officer Adam Brotman spoke to the success the company is seeing with its mobile app My Starbucks Rewards program.
While Starbucks only saw 30 percent year-over-year growth in total dollars loaded on Starbucks cards in retail North America, the company saw almost 100 percent year-over-year growth in dollars loaded on cards via mobile apps. This suggests a large shift from plastic cards to mobile apps.
Mr. Brotman also said that Starbucks has totally integrated its My Service Reward, mobile app, and card program with Teavana, the tea retailer that Starbucks acquired last year.
Another exciting mobile move for Starbucks is that select stores in Silicon Valley will be offering wireless charging for mobile devices.
Starbucks is partnering with Duracell Power Mac to try out the new technology.
One of the major concerns with mobile payment services is the fact that phones have limited battery life. By offering wireless charging, Starbucks addresses this worry and gives additional support to its mobile payment services.
Additionally, wireless charging will help drive in-store traffic as well as increase its capability for Wi-Fi promotions.
“With Starbucks’ success with its mobile wallet, the last thing the local Starbucks store wants is a dead phone at point-of-sale,” said Gary Schwartz, Toronto-based author of “The Impulse Economy” and “Fast Shopper, Slow Store.”
“I have always said that wireless charging stations are honey to the wireless bee,” he said. “Starbucks has already educated the consumer on the value of its retail network as a Wi-Fi network. Now it can it extend this utility to a charge-up affinity.
“There are only two deleterious mobile states: a consumer with a lack of caffeine or lack of handset power. Starbucks in the natural brand to be associated with charging up.”
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York