Why Mobile Payments are Taking Starbucks to the Next Level!

The Lempert Report
February 09, 2015

Retailers looking to boost sales might consider following Starbucks' lead

For retailers still being slow on adopting mobile payment options, you may want to look to Starbucks as a good example. According to their recently released holiday quarter report, the coffee giants mobile app has gained huge momentum. 

Starbucks made mobile payments a top priority and it appears to be paying off. In its first fiscal quarter of 2015 ended Dec. 28, the company said it had more than 13 million mobile users in the U.S., up from 12 million reported in October. A recent article on Forbes.com points out some of the ways mobile payment options have secured growth for the company. First, the mobile payment app helped boost their loyalty program, My Starbucks Rewards.  How? Because it made it easier to track purchases, get free drinks and other benefits. In the first quarter, Starbucks added 900,000 new rewards members, for a total of 9 million, up 23% from a year ago.

It also helped with new systems like mobile order and pay. In Portland, Starbucks was testing the idea of ordering on smartphones and then picking up in stores to avoid lines. Apparently this went well enough for them to decide to launch mobile order and pay in 600 stores in the Northwest in the next few months, and nationally later this year. Forbes reported that Starbucks CEO, Howard Schultz said this will “drive a significant increase in mobile transactions in stores."

So while mobile payments, like Apple Pay, Google Wallet continue to be adapted, it's also worth noting that what is perhaps making Starbucks' app so successful is that it combines both payment and a rewards system. As supermarkets look to keep up with these changing trends, it might be worth using the Starbucks model to increase loyalty as well as numbers.