Starbucks Transactions Now 21 Percent On Mobile

Quarter after quarter, Starbucks’ earnings remind everyone why CEO Howard Schultz can, time and time again, call his coffee company the “undisputed leader in mobile commerce.”

He confirmed that assertion during the company’s first quarter earnings call with analysts when he revealed that 21 percent of Starbucks transactions are done on mobile. That is, either in store at the point of sale (via the app) or using Starbucks’ app (with Mobile Order & Pay). During the month of December, that figure was up to 22 percent.

And during peak hours? Mobile Order & Pay accounts for 10 percent of all orders, Schultz said.

“We have just scraped the surface. We have bigger aspirations for our digital plan, and we are expanding our digital agenda across four key pillars,” he said.

What Starbucks has proven as a business is that it’s managed to take one of its greatest strengths — loyalty and customers dedicated to a daily habit — and monetize it with a service aimed at making the transaction and ordering process easier, which is, of course, via mobile.

Schultz also announced during the call that the number of active My Starbucks Reward members was 11.1 million, which is a 23 percent increase from the year prior. During Q1, $1.9 billion was loaded on Starbucks cards in the U.S. and Canada.

On the Mobile Order & Pay front, Starbucks is now seeing 6 million transactions a month and has plans to expand to more cities and even more countries. China was one region that was specifically discussed as having great potential as Starbucks’ next big country to bring mobile ordering to.

In China, the loyalty is already built into the business, as it was revealed during the call that 40 percent of transactions come from the Starbucks loyalty card.

“We just can’t wait to introduce Mobile Order & Pay in China. It’s going to be a runaway success,” Schultz said.

Earlier this month, at a press conference held in Chengdu, China, Schultz explained his company’s vision over the next few decades for its Asian stores, which China figures heavily into. Though Schultz declined to share specific dates for his goals, he did remark that China could soon become Starbucks’ most profitable region in the world.

“As Starbucks second-largest and fastest-growing market globally, China represents the most important and exciting opportunity ahead of us,” Schultz said. “Over time, it’s conceivable that China could become our largest market, and I am grateful to our 30,000 dedicated China partners and their supportive families for the significant contributions they are making to Starbucks’ success. The continued investments we are making, coupled with the culture of innovation we have established, are elevating Starbucks’ partner and customer experience beyond that of any other retailer in China.”

Overall, on the earnings side, Starbucks saw a solid quarter, with revenues up 12 percent to $5.4 billion, growth in the U.S. and Americas up 9 percent and global growth up 8 percent. Operating income for the quarter was up 16 percent to $1.1 billion.