Starbucks Reports 26 Million Mobile Transactions, A Good Sign Of Consumer Mobile Comfort

Written by Evan Schuman
December 7th, 2011

Starbucks on Tuesday (Dec. 6) released select mobile transaction stats for 2011, showing some 26 million mobile transactions. More meaningfully, the chain said it had tracked $110.5 million reloaded via the mobile app, which is a tiny percentage (4.6 percent) of the $2.4 billion put onto Starbucks Cards through non-mobile means. That said, it’s an impressive showing, even for a mobile app that doesn’t perform, technologically speaking, a mobile transaction at all.

The Starbucks mobile app merely displays the same barcode that exists on the customer’s plastic Starbucks Card. That means there is no wireless transmission, nor are any meaningful changes to the POS or card-swipe required. It does, however, require a change-of-behavior from the customer, and that might be the hardest and most valuable element.

What Starbucks is delivering is a clean, seamless experience for its shoppers, one that can be used constantly, given the always-there nature of most people’s mobile device behavior. Whether it’s more convenient or faster than pulling out the plastic card is arguable. With the plastic card, there’s no need to turn on the card, wait for its icons to display, deactivate airline mode (assuming it’s on, to save power and minimize radiation), click on an icon, wait for the app to load, login to the app and then navigate to the page where the barcode will be displayed. The fact that Starbucks has gotten consumers to do that 26 million times is indeed an accomplishment.

The more consumers use the phone in any way to help along a transaction, the more comfortable those consumers will be with real mobile transactions (think the wallet apps from PayPal, Google and, eventually, ISIS) when they materialize.

Starbucks consumers have already gotten fairly creative with unexpected ways to use the Starbucks app, such as for fee-free consumer-to-consumer payments.

Other stats released by Starbucks show a sharp increase in mobile acceptance, which seems to coincide with mobile rollouts from other majors chains this year. Said Starbucks in a statement: “In the first 9 weeks of the program, there were 3 million transactions and, for comparison, for the 9-week period starting in October, there were 6 million transactions.”

A figure not released was how many consumers are reflected in those 26 million transactions. If that number is being dictated by a relatively small number of mobile fans who constantly inhale their caffeine via an Android or iPhone, those transactions—which appear to average $4.25—might mean less in terms of consumer acceptance.

To compensate for the slower speed (see the mobile steps referenced above) of using a mobile device, a discount for using your card via mobile could easily send the numbers percolating upward. We know that times are tight, but there’s no room in a $2.50 regular coffee for a tiny mobile discount?


2 Comments | Read Starbucks Reports 26 Million Mobile Transactions, A Good Sign Of Consumer Mobile Comfort

  1. Jay Gould Says:

    Starbucks’ mobile payments program has been a great success for the company, but is it really all that consumer-friendly? After all, customers can only link their phones to a Starbucks prepaid card and then use the service only at Starbucks stores. What would happen if every retailer took the same approach?

    I mean, would we want in the not-too-distant future to be using a separate app for each retailer and provide them personal information over and over again? Wouldn’t it be far safer and more convenient to have one or two mobile payments accounts with providers of our choosing and use whatever payment method (credit cards, debit cards bank accounts, etc.) we may feel like?

  2. Merchant Account Says:

    Starbucks Mobile Pay is linked to a prepaid card and I, as many others, just don’t want to be using such cards. There is no reason anyone who can get a credit card should use a prepaid one, which has no effect on your credit score and gives you no rewards. Moreover, why should I get any payment card, which can only be use at Starbucks? If I did that, I should probably do the same for Whole Foods, Trader Joe’s and many others? Where would that end? It simply makes no sense to me.


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