Starbucks Mobile Transactions Soar Past 26M in First Year

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Starbucks Mobile Transactions Soar Past 26M in First Year


SEATTLE -- Eleven months since Starbucks Coffee Co. launched a mobile payment application (app), its mobile transactions have hit 26 million -- and the first full year of the program is not over yet.

There were early indications the program would prove a hit with customers. According to the company, there were three million mobile transactions in the first nine weeks. And the momentum continued to grow; for the nine-week period starting in October, mobile transactions totaled six million.

During 2011, Starbucks expanded its mobile payment program to more than 9,000 U.S. locations, introduced the Starbucks for Android app, rolled out the Starbucks Card eGift feature, started international expansion and developed the Starbucks Cup Magic app to share augmented reality experiences in its stores and beyond.

"2011 was a year of great mobile exploration and expansion for Starbucks, and an opportunity to give our customers a new way to connect with Starbucks through a variety of mobile experiences," said Adam Brotman, senior vice president and general manager of Starbucks Digital Ventures. "The customer response to our mobile apps has been phenomenal. Not only are they using their phone as a wallet, but as a connection point to Starbucks as they manage their Starbucks Card accounts, send eGifts and get into the holiday spirit with the Starbucks Cup Magic app."

Globally, the Starbucks Card program had $2.4 billion loaded onto cards during fiscal year 2011, and Starbucks Cards are currently used for one in four transactions in the United States, according to the company. On the mobile front, since January, there has been $110.5 million reloaded onto Starbucks Cards directly through the mobile app.

Starbucks took its mobile payment program beyond its nearly 7,000 U.S. company-operated stores and more than 1,000 Target stores to include nearly 1,000 Safeway stores in June. Currently, the top five U.S. cities for Starbucks mobile app adoption are New York, Seattle, San Francisco, Chicago and San Jose.

Internationally, mobile is on the move as Starbucks introduced the Starbucks Canada app on Nov. 8 to offer mobile payment in 1,000 stores in Canada. Additionally, Starbucks will be first on the high street to offer customers in the United Kingdom the option to pay with select smartphone devices at more than 700 Starbucks stores. It will debut in the United Kingdom on Jan. 5.

In addition, Starbucks Card eGift was added as a feature in June. Since October, the company reports that sales have doubled to account for 10 percent of Starbucks Card eGift sales. Starbucks Cards are currently available in 20 countries.

In addition to expanding its mobile payment option, Starbucks is also branching out with its wine and beer concept. Until now, the coffee retailer has offered wine and beer at a few stores in the Pacific Northwest (Seattle, Portland, Ore. and Issaquah, Wash.) However, the company will begin selling beer, wine and small plates like almonds and bread with olive oil dip at five to seven stores in Chicago next year, according to The Seattle Times.

"It's something our customers have really been responding to," spokesman Alan Hilowitz said. "They want to sit and relax, and maybe one person wants to have coffee and the other wants beer or wine. People also can go out after work without having to go to a bar, and people who are underage can go and have a cup of coffee instead."