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Loyalty (and caffeine) continues to drive Starbucks' mobile success

The company soon will roll out its mobile order-ahead service to 600 locations throughout the West Coast.

One of the reasons why it's so difficult for any merchant to approach a fraction of Starbucks' success with its loyalty and mobile payments program is because the coffee giant offers consumers an addicting product in caffeine. So, it should come as no surprise that the company's CEO announced Thursday during its first quater earnings call that Starbucks is averaging 7 million mobile transactions per week.

"We continue to see broad customer acceptance and adoption of our mobile payment technologies," Howard Schultz said. "Today in the U.S. alone, over 13 million customers were actively using our mobile apps. And we are now averaging more than 7 million mobile transactions in our stores each week — representing 16 percent of total tender. That's more than any other bricks-and-mortar retailer in the marketplace."

Schultz expects mobile transactions to only increase once the company launches its new order-ahead feature nationwide. The service at the moment is only available in Portland, Ore. but the company soon will roll out the service to 600 locations throughout the West Coast. A nationwide rollout is expected to begin in the second half of 2015. 

"Our experience today confirms that once rolled out, mobile order and pay will bring a significant increase in mobile payment transactions overall, and have a fly wheel positive effect on our overall business in driving both increased MSR membership and app usage and creating significant additional one-to-one marketing opportunities," Schultz said. 

Matthew Ryan, who is the global chief strategy officer for Starbucks, was also on the call and spoke about how the order-ahead feature figures into the company's plans with mobile payments.

"We're not starting from a cold start. We already have 13 million active mobile users. We have the POS and payment capabilities, we have MSR (My Starbucks Rewards) up to 9 million-plus," Ryan said. "We are simply adding on mobile ordering on that staff of proprietary integrated technologies that allow us to do something like that. And it sets us up, frankly, for delivery as well. So the kind of pace of innovation, our ability to roll it out and positively influence our business overall is because we have built this and integrated it in the way it's mentioned."

Starbucks also announced yesterday that Kevin Johnson, a former CEO of Juniper Networks and former president of Microsoft's platform division, will serve as president and COO. He takes over that role from Troy Alstead, who will be absent from the company for a year on a sabbatical.