USA Today reports that just three months after Starbucks began accepting payments via the Starbucks Card Mobile iPhone and Blackberry applications, more than three million people have paid for their lattes and other drinks using the mobile app.
According to the story, “The Starbucks mobile payments offering is a ‘touch to pay’ system. It allows the customer to hold up the app's barcode to the in-store scanner at the register to pay using the electronic tender. The program was piloted at select stores in September 2009. After extensive testing, it was found to be the fastest way for customers to pay.”
The results were revealed at Starbucks’ annual meeting in Seattle by CEO Howard Schultz.
The story continues:
“Mobile payments is just one element of a much larger social and digital media strategy that Schultz refers to as a ‘blueprint for growth.’ This involves the brand crossing over into the consumer packaged goods (CPG) category by leveraging its digital and social properties. Schultz was eager to inform shareholders that the Starbucks brand is number one on Facebook with 29 million fans, and is also a top brand on Twitter and Foursquare.
“Schultz used Starbucks' new instant coffee brand VIA as proof of the crossover strategy. VIA generated $194 million in sales in its first year, and is now in 40 points of distribution.
“Ultimately, Schultz believes the company's CPG business will rival its retail business — and that the Starbucks Card Mobile application will connect both sides of the brand's identity through loyalty programs.”
According to the story, “The Starbucks mobile payments offering is a ‘touch to pay’ system. It allows the customer to hold up the app's barcode to the in-store scanner at the register to pay using the electronic tender. The program was piloted at select stores in September 2009. After extensive testing, it was found to be the fastest way for customers to pay.”
The results were revealed at Starbucks’ annual meeting in Seattle by CEO Howard Schultz.
The story continues:
“Mobile payments is just one element of a much larger social and digital media strategy that Schultz refers to as a ‘blueprint for growth.’ This involves the brand crossing over into the consumer packaged goods (CPG) category by leveraging its digital and social properties. Schultz was eager to inform shareholders that the Starbucks brand is number one on Facebook with 29 million fans, and is also a top brand on Twitter and Foursquare.
“Schultz used Starbucks' new instant coffee brand VIA as proof of the crossover strategy. VIA generated $194 million in sales in its first year, and is now in 40 points of distribution.
“Ultimately, Schultz believes the company's CPG business will rival its retail business — and that the Starbucks Card Mobile application will connect both sides of the brand's identity through loyalty programs.”
- KC's View:
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I continue to believe that there is a strong possibility that by focusing on the gold that Schultz believes is at the end of the CPG rainbow, he is risking taking the company’s eye off the core business ball. If the stores are not friendly and efficient, if the coffee isn’t good, and the restrooms are not clean, then the brand will get tarnished and the company will be hurt.
But the number of people using the mobile payment app strikes me as remarkable ... and a terrific base of information on which to build.
