By Todd Wasserman, Mashable
Starbucks customers apparently are finding buying via mobile as addictive as the company’s coffee.
Less than a year after Starbucks launched an app that allows mobile payments, it has hosted 26 million such transactions on iOS, BlackBerry and Android, according to the chain. One in four Starbucks card transactions is now executed via a Starbucks card and a portion of those are done through mobile.
The mobile-payments initiative has built momentum recently: In the nine weeks after it was released, there were 3 million transactions. But in the past nine weeks, there have been 6 million, says Adam Brotman, SVP and general manager of Starbucks. He adds that New York, Seattle, San Francisco, Chicago and San Jose, Calif., are the top cities by volume for mobile purchases.
Brotman declined to say exactly how many people had downloaded the app, except that it’s in the “millions.”
Starbucks presented the stats to emphasize its contention that 2011 was the “year of mobile” for the company. Among other recent highlights was the company’s Cup Magic augmented reality app, which has spurred 450,000 “engagement points” since its November release. An engagement point refers to a use of the app. According to Brotman, 91% of people who downloaded the app used it.
Finally, $110 million has been reloaded to customers’ Starbucks cards via mobile, Brotman says. For comparison’s sake, $2.4 billion was loaded onto Starbucks cards overall in 2011.
When asked why mobile payments seem to have caught on at Starbucks, Brotman said he thought convenience was a major factor. “It’s a faster, easier way to pay,” he said. “We not only developed the feature, but we also rolled out scanners in our locations.”
Starbucks Starts Accepting Mobile Payments Nationwide
by Jennifer Van Grove
Nearly 6,800 company-operated Starbucks stores in the U.S. will begin accepting mobile payments Wednesday. Customers using the Starbucks Card Mobile app on their iPhone, iPod touch or BlackBerry will now be able to use those devices as tender.
The nationwide rollout marks the official launch of the Starbucks Card Mobile payment program, which has been piloted at Target stores and select San Francisco, Seattle and New York Starbucks locations.
Starbucks Card Mobile [iTunes link] lets users add their Starbucks Cards, track rewards and reload cards as needed via PayPal or credit card. To pay with their phone, app users simply select “touch to pay” and hold up the barcode on their mobile device screen to the 2-D scanner at the register.
An Android application is also said to be in the works, but the company has yet to disclose a release date.
Starbucks is using its own custom-built technology to enable the 2-D mobile barcode scans. The coffee retailer opted for barcode scanning over near field communication technology — which Google is exploring — because of its limited availability. The coffee retailer was reluctant to wait for a NFC ecosystem to develop when its customers have expressed interest in mobile payments now, according to Chuck Davidson, the category manager of innovation on the Starbucks Card team. “Once there are more users, we will adapt,” he says.
In testing, Starbucks assessed the mobile payment option by measuring application speed, transaction speed and total customer wait time, says Brady Brewer, vice president of Starbucks Card and brand loyalty. In all instances, Starbucks Card Mobile was the fastest way for customers to pay.
Starbucks is investing in mobile payments, an investment Davidson describes as modest in relation to expectations, because customers have requested the option and have shown a propensity to not only pay with Starbucks Cards — one in five transactions are made using a Starbucks Card — but frequently use their smartphones while waiting in line.
The company also believes that its customers carry their mobile phones more often than a wallet or purse, and sees Starbucks Card Mobile and the mobile payment program as an opportunity to reach these consumers and build stronger relationships.
Starbucks seems confident that its customers will appreciate the new, faster way to pay. Both Davidson and Brewer believe that adoption will spread as customers tell their friends about the new mobile payment option.
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