Starbucks says 1 in 6 payments already mobile

The company said it accounted for 90 percent of mobile payments in the US last year

Starbucks
The company that embedded wildly expensive coffee into your life now wants to make it fast, easy and nearly thoughtless to pay for it. For example, working with Square, Starbucks can turn your phone into a wallet that even tracks digital receipts (though we may not really want to know just how much we spend on latte and foam). Starbucks also launched what turned into the biggest LivingSocial promotion to date, selling 1.5 million gift cards in one day. Customers could also link the gift card to their loyalty card and keep on sippin'. Starbucks wants to be a "pioneer," says chief digital officer Adam Brotman, in blurring lines between technology, marketing and customer experience.
Starbucks The company that embedded wildly expensive coffee into your life now wants to make it fast, easy and nearly thoughtless to pay for it. For example, working with Square, Starbucks can turn your phone into a wallet that even tracks digital receipts (though we may not really want to know just how much we spend on latte and foam). Starbucks also launched what turned into the biggest LivingSocial promotion to date, selling 1.5 million gift cards in one day. Customers could also link the gift card to their loyalty card and keep on sippin'. Starbucks wants to be a "pioneer," says chief digital officer Adam Brotman, in blurring lines between technology, marketing and customer experience.

Starbucks says mobile payments are taking off in a big way and it's already handling almost 7 million a week at its U.S. coffee shops.

That accounts for 16 percent of all transactions at its stores and, the company says, meant it transacted 90 percent of all of mobile payments in the entire U.S. in 2013.

Starbucks says mobile payments are taking off in a big way and it's already handling almost 7 million a week at its U.S. coffee shops.

The company's slice of the national mobile payments market is sure to dip in the years ahead as other retailers start catching up to Starbucks, in part thanks to the recent launch of Apple Pay, but Starbucks says it sees no slow down in consumer adoption of its mobile payments technology.

Starbucks has integrated payments into its its own app, which allows customers to keep a prepaid Starbucks card on their phone, enabled with automatic refills when it gets low on cash, and keep a list of favorite drinks to make ordering easier.

Starbucks has apps for both Apple iOS and Android devices. On iOS, the prepaid Starbucks card is integrated with the phone's Passbook digital wallet app.

"What you're going to see in the years ahead will be a rapid acceleration in mobile device purchases and a continued significant migration away from bricks-and-mortar commerce," said Howard Schultz, CEO of Starbucks, in a conference call with investors Thursday.

Schultz said mobile users represented "a huge prize" for retailers and financial services companies and that's why there is so much interest in the sector.

"That's why every tech and financial service company in the world is today chasing the mobile payment opportunity," he said. But he said that while Starbucks doesn't have the hardware and software expertise of competitors, it has managed to do something that its competitors, so far, haven't: change consumer behavior.

"We've accomplished this by integrating the convenience of mobile payment to a compelling and enjoyable program that gives our customers rewards," he said.

Starbucks is seeing growth of 50 percent a year in mobile payments and looking ahead, Schultz said, "the real growth is yet to come."

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Supporting Association

Blog Posts

Why 2017 will herald a resurgence of values-based marketing

It doesn’t take long for predictions to become predictable: The rise and rise of Facebook; advancements in analytics; the normalisation of chatbots; personalisation, programmatic, automation, authenticity… The prediction that’s missing from these lists is that in 2017 we will witness a resurgence of values-based marketing.

Jacqueline Burns

Founder, Market Expertise

Why customer experience driven growth is set to take off

Our overall brand perceptions are invariably shaped by our experiences. And loyal customer relationships can be severed in moments by a negative service interaction.

Consistency and conversation: How branding and advertising can work better together

Advertising and branding are two of the most visible outputs of marketing, which is why getting them right is so important. However, too often the line between branding and advertising becomes blurred. This means advertising activity can be out of sync with brand, resulting in poor results for both functions.

Dan Ratner

managing director, uberbrand

Someone needs a swift kick up the bum for such an idiotic idea.

random

​Why a degree is no longer enough to get you hired as a skilled marketer

Read more

The frequent flyer programs are the new profit machines for airlines all over the world, as they have morphed to be mass marketing machin...

Steve@iFLYflat

Velocity frequent flyers program strong performer in mixed half-year for Virgin

Read more

Hi Jennifer, thanks for sharing these info regarding the digital marketing trends.I've created a related video to this topic, would you m...

Fabio Carry

Predictions: 17 digital marketing trends for 2017

Read more

Great news. Marketing automation can be very useful for companies at various stages of development. With so many tools out there it's bet...

Ben

How HBF rolled out marketing automation in eight months

Read more

I read a report that the business sector in Australia as a whole have yet to fully harness and see the proactive change that predictive a...

Alex Martin

Report: Predictive analytics, IoT, machine learning battle it out for marketing dollars

Read more

Latest Podcast

More podcasts

Sign in