Starbucks Made Over $1 Billion From Mobile Transactions Last Year
Starbucks's mobile payment and loyalty app program is phenomenally successful, used by 10 million Starbucks customers for an average of nearly 5 million transactions a week in the U.S., according to recent data from BI Intelligence.
That success is largely a function of the company's fantastically loyal customers who come back day in and day out. It also helps that Starbucks offers a low-cost product (read: coffee), and incorporates app rewards, like free drinks on birthdays, that encourage usage of the app.
- In total, Starbucks drove over $1 billion in mobile payment revenue in 2013, according to BI Intelligence estimates. These are in-store transactions that Starbucks customers complete by using their phones at the register. (See chart below.)
- Previously, we had forecasted that total mobile payments in the U.S. last year reached $30 billion. That means that Starbucks drove a full 4% of U.S. mobile payments volume in the year.
Starbucks has done an incredible job of making mobile payments valuable to consumers, even as many other mobile payments companies, and retailers offering mobile payments, still haven't figured out the formula.Dunkin' Donuts is soon going to enhance its own mobile payment app with a loyalty program, and it will be interesting to see whether another beloved coffee company will have the same success, or if Starbucks has figured out something special about what its customers want.
Starbucks is doubling down on its mobile payments business. The company created a chief operating officer position to be filled by former CFO Troy Alstead, so that CEO Howard Schultz can focus more on the company's evolving payments business.Starbucks reports earnings based on their own fiscal quarters, which run ahead of calendar quarters. For simplicity's sake, we've transposed Starbucks data to the corresponding calendar quarters.
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