Starbucks gets a nice jolt from mobile

April 28, 2015 12:29 PM

Starbucks Corp. revealed several mobile details in its recent Q2 earnings call that illustrate how the small screen is providing a pick-me-up for the coffee and food chain.

Starbucks, No. 456 in the newly released Internet Retailer 2015 Top 500 Guide, says it attracts 8 million mobile transactions per week, equaling nearly 19% of its U.S. store sales. And the Starbucks mobile app now has 16 million active users, Howard Schultz, Starbucks’ chairman, president and CEO, said, according to an earnings call transcript with investors obtained from Seeking Alpha. Total revenue grew 17.9% in Q2 to $4.6 billion, up from $3.9 billion a year earlier.

In December, Starbucks launched Mobile Order & Pay via its iPhone app at 150 stores in Portland, Ore. It has expanded the service to more than 600 stores in the Pacific Northwest, Schultz said.

“We are now on track to roll out Mobile Order & Pay nationwide this calendar year. Mobile Order & Pay has been extremely well-received by our customers enabling them to order ahead, avoid lines (and) avoid waiting for orders to be filled resulting in shorter lines, faster service, more efficient in-store operations and execution.”

Schultz added that the chain’s daily transactions increase in those stores and areas where Mobile Order & Pay has been launched. Starbucks executives also said on the call that the chain plans to add the mobile offering to its Google Inc. Android app (for now it is just available on iOS) as well as for customers in the U.K. and Canada this year.

“We are receiving positive feedback from many customers,” said Kevin Johnson, president and chief operating officer. “Students who now have time to visit Starbucks between classes, parents who are able to easily order their favorite Starbucks food and beverages while running errands with their children, and busy people from all walks of life. We also received overwhelming appreciation from deaf customers who are now able to easily order and receive their customized beverage just the way they want it.”

Starbucks also noted:

  • It plans to launch delivery in Seattle and in the Empire State building in New York City during the second half of 2015.
  • It has more than 10 million active My Starbucks Rewards members in the U.S., up 27% over last year, and it added 1.3 million loyalty members in Q2. Many of the chains’ loyalty members use the app to access a digital version of My Starbucks Rewards, pay for purchases and view their rewards.
  • It will begin testing delivery through a collaboration with Postmates, an on-demand delivery service. The deal enables customers to order food and beverages using the Starbucks mobile app for delivery in defined areas.



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