My Starbucks Rewards (MSR) is not just a marketing project run at a manager level inside the global coffee giant. The ongoing investment and commitment from the company’s C-suite goes back years. The program’s performance gets a prominent mention at every quarterly investors update and MSR is a key strategic priority at the very top.
Back in Q3 2013 when MSR accounted for 11% of total transactions, CEO Howard Shultz stated that “Starbucks is a clear leader in mobile payments and we are encouraged by how consumers have embraced mobile apps as a way to pay.”
“Starbucks is a clear leader in mobile payments and we are encouraged by how consumers have embraced mobile apps as a way to pay.” – Howard Shultz
In Q2 2016, with net quarterly revenues for the coffee giant exceeding $5 billion worldwide, the percentage of U.S. transactions processed via MSR mobile payment reached 24% – more than double 2013. And this is sure to continue to climb, bolstered by the popularity of the recently rolled out order ahead feature.
“The app is one of the company’s core strategies.” – Chief Digital Officer, Adam Brotman
Starbucks credits the success of their loyalty and mobile payments app – MSR now boasts over 12 million active members – with promoting revenue growth and brand loyalty. While stats on adoption and usage of generic open mobile wallets have gone largely undisclosed, Starbucks’ transparency in sharing their metrics has been refreshing to see and delivers a strong message about the potential of retailer-driven mobile wallets.
Mobile payments implemented properly in conjunction with loyalty and other valuable features and services can be of tremendous value to most retail businesses and their customers in today’s mobile world.
According to a Business Intelligence report: In 2016, 54% of marketers said they used mobile apps for marketing, up from approximately 27% in 2014 for a year-over-year growth of 98%. An additional 20% said they intend to use apps for marketing within the next 12 months. Finally, 77% said they noted tangible ROI from mobile marketing, up almost 150% since 2015.
The growth of the Starbucks program since I started using the app everyday in 2011 is great to see and validates much of our thinking behind the founding of SmoothPay. We now deliver “Starbucks-like” apps for other coffee chains, restaurants, convenience, grocery and retail brands and are pleased to be at the leading edge of this evolution in payments.