Starbucks Expands Digital Reach By 13M
Starbucks Coffee Co. is expanding its digital reach, adding more than 13 million digitally registered customers to its ranks in the past year.
During the quarter, Starbucks added 1 million customers, a 14% increase that bumps active reward membership to 16.3 million. “This result was driven by leveraging our increased digital reach, as well as a more seamless customer onboarding experience, greater mobile order and pay adoption, and enhanced personalization features," explained Kevin Johnson, President and CEO, in a quarterly conference call with analysts. "Between digitally registered and active reward customers, we are now approaching 30 million digital connections in the U.S."
Happy Hour Pays Off
When it comes to driving digital relationships, Starbucks has “made great progress,” said Johnson, adding 13 million digital customer registrations since the initiative launched last spring. These consumers were part of the group that received Starbucks’ Happy Hour marketing.
“To build our digital ecosystem we widened the aperture of digital reach and created a funnel of activation that is leading to increases in active membership in our Starbucks Rewards program,” he added.
This spring, the coffee roaster will roll out its updated loyalty program, giving rewards members more choice and flexibility for redeeming rewards. It will coincide with marketing to convert the digital customer registrations to Starbucks Rewards members. “We have leveraged learnings and customer insight from prior changes to the rewards program to inform our work ahead of this launch. This includes a robust marketing activation plan to drive not only awareness of the changes but overall awareness of the program and key customer benefits. …Lack of awareness has historically been one of the limiting to customer adoption, and we have a significant opportunity to amplify a powerful message around loyalty,” Johnson explained.
An Insight Driven Approach
In its quarterly earnings call with analysts, the global coffee giant reported record revenue of $6.6 billion representing 9% growth versus prior year and comp sales growth of 4%.
“These results were enabled in part by solid execution during our holiday season,” said Johnson. “Our holiday plan was informed by insights we gathered from customers who highlighted what they appreciate from Starbucks during the holidays. We leveraged those insights to reignite the customer connection in many ways; with improved brand and product awareness, sharper and cleaner holiday merchandising, relevant new offering such as our limited edition red cup promotion, and an enhanced in-store experience. This comprehensive insight-driven approach delivered results and importantly, created momentum that provides a solid foundation for future quarters…”
2019 and Beyond
Starbucks’ two long-term growth markets are the U.S. and China. In the U.S. the coffee roaster remains focused on three operating initiatives; enhancing the in-store experience, driving digital relationships, and delivering beverage innovation.
Part of driving that in-store experience is freeing up staff to take better care of customers. To that end, Starbucks is shifting certain cleaning tasks to after hours and is automating product planning and replenishment to reduces store clutter and time away from customers.
Starbucks, as HT reported last week, is expanding its Starbucks Delivers powered by UberEats.
After a successful test in Miami last fall, delivery is now available in San Francisco, the first of six new markets. In the coming weeks, delivery will expand to Boston, Chicago, Los Angeles, New York and Washington, D.C.
Starbucks Delivers is being “seamlessly integrated” into the UberEats mobile app, enabling full beverage customization for customers and fully integrating into store ops for management. Down the road, Starbucks plans to add delivery to its own app, explained Rosalind Brewer, COO & Group President, Americas.