Mobile Commerce

Starbucks And Spotify Deal Is Music To Customers’ Ears

What coffeeshop worth its salt (or sugar) doesn’t have a constant stream of auteur-inspired guitar ballads, jazz piano melodies and the occasional chamber a cappella piece? This hasn’t been a problem for Starbucks since the now-international chain first began cultivating a distinct atmosphere in its stores through often branded partnerships with musicians. Now, Starbucks is ready to take its aural game to a new level – thanks to the help of a well-positioned partner.

Starbucks announced Tuesday (Jan. 19) that it had finalized a deal with Spotify to integrate the music played in Starbucks locations across the world with the music player app. Not only will Starbucks customers be able to identify songs played overhead with the Spotify app, but they’ll also have the option to save songs to their profiles and access curated content from Starbucks and Spotify experts.

Howard Schultz, chairman and CEO of Starbucks, said that while Starbucks locations have been pumping mellow tunes and contemplative odes to set the right moods for nearly 40 years, even the most seemingly traditional elements of retail shouldn’t escape the lens of innovation.

“Music has played a pivotal role in our stores for over 40 years and we have been at the forefront of how to integrate it into a retail environment,” Schultz said in a statement. “Today is the next era in that experience. We are merging the physical and digital, providing new access points for Spotify as they continue to grow globally, placing more control into our customers’ hands and giving artists the world’s largest stage for them to share their talent.”

While the Starbucks-Spotify deal adds a great deal of mobile access to the coffee chain’s music repository, the more engaging aspects of the initiative might actually happen while customers are sitting down to a Venti macchiato. As the store’s playlist runs, each user can like individual songs to influence the next ones in a subtle example of marketing adapting to consumer choices – if more people are feeling that Roo Panes song that just played, their likes will influence similarly low-tempo music. If it bombs, then the next song might just be a Bieber – if only for a change of pace.

Breaking down the ulterior corporate motives behind the Starbucks-Spotify deal, it’s easier to see how the latter benefits — an official partnership with a greater presence in the world’s most recognizable coffee chain certainly won’t hurt Spotify’s chances in mobile music streaming’s version of the Hundred Years’ War.

Starbucks’ machinations? Fast Company explained that the coffee chain is playing a bit of a long game with the Spotify deal. Starbucks officially stopped carrying physical CDs in their stores in 2015, but allowing customers to take digital playlists with them on to go is a just as good, if not more efficient, way of getting content into coffee drinkers’ free hands. Sure, they’ll have to kiss whatever paltry revenue from CD sales they were getting, but in an age where everything’s gone digital, offering physical music media anymore to any consumers but diehard audiophiles isn’t likely to be a profitable plan.

However, in the age of digital commerce, profit can’t always be measured in dollars and cents. In order to like songs, save playlists or do anything else under the new Starbucks-Spotify partnership, customers have to download and use the official Starbucks app. This naturally funnels users toward mobile features that the coffee chain has been aggressively pushing over the last several months: on-the-go ordering, mobile payments, loyalty reward and more. If switching from physical CDs to a Spotify-supported digital musical platform proves all that’s needed to take Starbucks’ mobile app to the next level, Schultz might have made the deal years ago.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.