Starbucks Expands Rewards Program Beyond Its Shops -- Update
March 23 2016 - 4:21PM
Dow Jones News
By Julie Jargon
Starbucks Corp. on Wednesday said customers using its new
branded prepaid Visa cards would be able to earn points for free
coffee and other perks.
The company outlined its latest plans to expand its rewards
system beyond its own coffee shops during its annual shareholders
meeting in Seattle. The Starbucks prepaid cards would be able to be
used at any retailer that accepts Visa cards.
The Starbucks prepaid Visa card, which is expected to be
available by the end of the year, will allow card holders to earn
"stars" for all purchases made on the card. Those stars can then be
redeemed at Starbucks cafes. Customers will be able to apply for
the card through the Starbucks mobile app or on its website.
"This is just the beginning," Starbucks President and Chief
Operating Officer Kevin Johnson said at the meeting. "We intend to
open up our digital ecosystem to more payment options."
Restaurants and retailers in an increasingly competitive
environment are vying to establish repeat customers, and Starbucks
has made its loyalty program a central part of its growth strategy.
Even fast food chains are jumping on the bandwagon. McDonald's
Corp. recently said it plans to develop a loyalty program later
this year or early next.
The company's annual meeting got off to a rocky start after a
bogus news release was issued by a labor group early Wednesday
morning claiming the meeting had been rescheduled on short notice.
The prank, orchestrated by Working Washington, a union-backed
nonprofit that's pushed for minimum wage increases in Washington,
was intended to demonstrate the difficulty workers face when
dealing with unpredictable work hours.
The Seattle-based group, under the guise of "SBUX Shareholder"
sent an email to reporters later in the day explaining that,
"shareholders and executives got to imagine what it might be like
if the Starbucks Corporation treated everyone's time like they do
baristas' time in many of their stores--with on-demand,
ever-changing schedules." A spokesman for Working Washington
confirmed the group was behind the hoax.
The meeting ended on a high note with a performance by Alicia
Keys, in keeping with Starbucks' tradition of showcasing big-name
performers at its annual meetings.
Starbucks last month announced it is changing its loyalty
program to reward customers based on how much they spend rather
than how frequently they make purchases. Under the new system,
which takes effect in April, customers will earn two rewards
points, or "stars," for every dollar spent, rather than one star
for each transaction, a move that caused a bit of a social media
uproar among customers who place small orders.
"The intent behind it was to level the playing field for our
customers," Mr. Johnson said.
Since the announcement, more than 500,000 customers signed up
for the program.
Starbucks has been seeking other ways to draw in people who may
not already be customers. The coffee chain has teamed up with
music-streaming service Spotify and ride-sharing service Lyft Inc.
to allow those customers to get reward points that can be redeemed
at Starbucks.
During the annual meeting, Starbucks also announced plans to
introduce its Teavana brand of teas to its cafes across Asia,
Europe, the Middle East and Africa by the end of the fiscal year.
Starbucks acquired the tea retailer in 2012.
In the U.S., Starbucks this summer plans to roll out a new
ready-to-drink cold brew coffee in some supermarkets and Starbucks
cafes.
The company also said it has reached an updated agreement with
Keurig Green Mountain Inc. to continue to be the supplier of
Starbucks K-cups. After Keurig in December announced it would be
acquired by JAB Holding, it wasn't clear whether Keurig would keep
making Starbucks K-cups for use in its single-serve brewers or
whether Starbucks would begin doing so on its own. Starbucks plans
to launch a line of K-cup lattes this summer in the U.S.
Write to Julie Jargon at julie.jargon@wsj.com
(END) Dow Jones Newswires
March 23, 2016 16:06 ET (20:06 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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