Starbucks said its mobile order and pay service grew to 11% of transactions in U.S. company-operated stores in the first quarter of 2018 from 10% in the prior quarter. The Starbucks Rewards loyalty program helped to drive mobile growth with an 11% membership gain to 14.2 million from the prior year. Member spending made up 37% of U.S. sales, according to a company press release.
The company, which now has the ability to offer mobile order and pay to customers who don’t belong to its loyalty program, plans to ramp up the service to all customers in March, company president and CEO Kevin Johnson said in a conference call with investors. The growing popularity of mobile payment is leading the company to test cashless stores in the U.S.
Starbucks is also keeping an eye on blockchain technology, which distributes the same history of transactions among a network of computers and underlies digital currencies like bitcoin, as part of its efforts to be a leading innovator in mobile payments, Howard Schultz, executive chairman and former CEO, said on the call.
While Starbucks isn’t planning to form a digital currency or invest in blockchain technology, the company is mindful of adapting to changing consumer habits, as seen with the commercialization of the internet since the mid-1990s. Digital currencies will need to be "legitimatized by a brand and a brick-and-mortar environment, where the consumer has trust and confidence in the company that is providing the transaction," Schultz said. While the executive made it clear Starbucks is not investing in blockchain at the moment, the chain's well-established strength in digital payments positions it to jump at the opportunity when the timing is right.
As I have said many times on here and on other sources, the use of phones on ordering and searches is growing exponentially. Now is the time to look at mobile phone application!