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Starbucks CEO Howard Schultz is ecstatic about his company’s past performances as he eyes an even more successful future built around burgeoning brand loyalty.
“The really big news is how powerfully the innovation of our card wall and vastly expanded selection of proprietary Starbucks gift cards enabled customers to give a Starbucks gift of choice throughout the season,” Schultz said during his Jan. 22 first-quarter earnings call, according to Seeking Alpha. “To put the success of our holiday card program into perspective, consider these following metrics. This holiday, one in seven American adults received the Starbucks gift card, up from one in eight last year. Roughly 2.6 million Starbucks cards were activated on Dec. 23 alone and $1.6 billion was loaded on cards in the U.S. and Canada in Q1, up 17% over last year.”
Schultz said the strength and success of “our Starbucks card program reflects both the power and the growing relevancy of the Starbucks brand.”
During a 31-day period, Schultz said more than 13 million customers entered the company’s “It’s a Wonderful Card Sweepstakes,” with a chance to win Starbucks for Life.
“Going forward, we know that increase Starbucks card sales drives My Starbucks Rewards [MSR] membership and, in turn, traffic in our stores,” he said. “We added almost 900,000 new MSR members in Q1 alone, bringing our total membership to over 9 million, 23% above where we were at this time last year, and 5.5 million of our MSR members are gold members. We are already seeing and realizing the benefit of increased activity in our stores as gift cards received over holiday are redeemed and have additional enhancements to the MSR program planned and have confident will continue to result in even further acceleration in MSR membership in the future.”
What’s more, Schultz noted that MSR is one of the most important business drivers as new members contribute not only short-term increases in revenue and profit, but also long-term loyalty for years to come.
For the quarter, Starbucks drove nearly nine million more customer transactions through its U.S. stores than it did in the same period last year, and almost 12 million more globally. Starbucks has about 7,000 U.S. stores and almost 10,000 globally.
Starbucks continues to see broad customer acceptance and adoption of its mobile technologies, Schultz said.
“Today in the U.S. alone over 13 million customers are actively using our mobile apps and we’re now averaging over 7 million mobile transactions in our stores each week, representing roughly 60% of total tender, more than any other bricks and mortar retailer in the marketplace,” Schultz said.
Schultz also previewed the possibility later this year for Starbucks to launch a delivery service, which would involve its own employees and also a model that includes a third-party service. Members of Starbucks’ loyalty program would be able to request delivery through Starbucks’ new mobile order and pay app, which will be rolled out nationwide this year.
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