Mobile Marks Growth in Starbucks’ Q2

Mobile payments continued to gain traction for coffee giant Starbucks in the second quarter of the current fiscal year. Mobile overall was 29 percent of all orders in the U.S., a sequential gain of 2 percent.

Within that designation, mobile order and pay was 8 percent of total transactions, up from about 6 percent at the end of the year.

For the company, earnings met expectations at $0.45 a share, while the top line came in at $5.3 billion.

Newly-installed CEO Kevin R. Johnson remarked in the call that retail as an industry has been and is being marked by a “seismic shift in consumer behavior,” even as Starbucks has been able to open 2,000 stores globally every year, and same-store sales have also been on the rise, with 4 percent growth in March and acceleration into April. China was called out specifically on the call, with 7 percent comp growth.

Management stated on the call that the continued adoption of Mobile Order & Pay had an attendant demand that was causing “throughput challenges at peak in these stores.” At the end of the most recent quarter, about 1,800 of the U.S. stores were seeking 20 percent or more of peak transactions via mobile order and payments.

The company has been implementing new initiatives to address the demand, with Digital Order Manager, a tablet used to gain visibility on all orders, tracking them in real time. There also exists real-time notifications to the consumers when orders are ready via mobile app. The push toward new technology and efficiencies should improve congestion that has marked past instances of handoffs, said management.

Starbucks also said that its rewards spend per member got a boost through the quarter across average transaction frequency and ticket size. Average spend was up 8 percent, and membership growth was 11 percent to more than 13 million members.


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