Payments Update:
Starbucks Q1 2016
Overview
Growth Metrics
Commentary
9% increase in comp
store sales for the U.S.
and 8% globally
“We are delivering…record breaking results…despite…the accelerating
shift in consumer behavior away from traditional bricks and mortar
retailing...” –Howard Schultz, CEO
STRONGEST holiday
in history
Quarterly revenue of
$5.4 billion, a 12%
increase
Over 85 million
customer transactions
each week
“Following China, we went to India where our business with JV partner
Tata, already 80 stores strong, is growing faster on a percentage basis
than any other region in the world.” –Howard Schultz, CEO
“For the full calendar year, Starbucks is now the number eight brand
in the liquid refreshment beverage category and ahead of established
brands such as PowerAde and Sprite.” –Howard Schultz, CEO
Loyalty/My Starbucks Rewards
Growth Metrics
Commentary
1 in 6 Americans
received a Starbucks
card this holiday
“In Q1, we introduced social gifting to China... We are honored that
the Chinese government chose Starbucks to be the first company
in China to be authorized to offer customers a stored value card.”
–Howard Schultz, CEO
In Q1, $1.9 billion was
loaded on Starbucks
cards in the U.S. and
Canada (+19%)
Active MSR members
in the U.S. reached 11.1
million (+23%)
My Starbucks Rewards
has grown by over 50%
in the last two years
Over 40% of
transactions in China
are on the Starbucks
card
“This holiday season…we leveraged our digital assets to reward our most
loyal customers with five specialized Very Monday offers throughout
the holiday season. Those offers, combined with the Starbucks for Life
sweepstakes, this year open only to our MSR members, drove customer
traffic and increased MSR loyalty membership.” –Howard Schultz, CEO
“And we’ve got this robust roadmap for additional features over the
course of the rest of this year, including the ability to earn -- to use your
earned My Starbucks Rewards in the Mobile Order & Pay flow, the
ability at favorite stores and favorite items and of course suggested and
recommended selling...” –Adam Brotman, Chief Digital Officer
“…we are confident on a pathway of significant new partnerships... we
will be announcing in the coming quarters. And it will fulfill our vision
to make stars everywhere...” –Matt Ryan, Global Chief Strategy Officer
“The loyalty customer [base]…is growing significantly faster than our
regular customer base. People using the mobile form of loyalty is growing
even faster than that. And people using Mobile Order & Pay is growing
even faster than that. So you actually see a cumulative benefit to the
ecosystem at play.” –Matt Ryan, Global Chief Strategy Officer
U.S. Headquarters
Three Park Place, Suite 200 l Annapolis, Maryland 21401
P: 410.855.8500 l info@firstannapolis.com
Payments Update: Starbucks Q1 2016
European Office
1 of 2
Keizersgracht 313-I l 1016 EE Amsterdam l The Netherlands
P:+31 (0)20 530 0360
© 2016 First Annapolis Consulting, Inc.
Payments Update:
Starbucks Q1 2016
Mobile/Digital
Growth Metrics & Initiatives
Commentary
Over 21% of total U.S. transactions are done
with the mobile app
“…we are leveraging proprietary technology,
digital engagement and customer loyalty to
create a comprehensive integrated digital
and mobile ecosystem that will continue
to drive our business well into the future.”
–Howard Schultz, CEO
Over 1 million customers in the U.S. used
Mobile Order and Pay in December averaging
five mobile orders each that month
Over 6 million Mobile Order and Pay
transactions per month
“…when we roll out Mobile Order & Pay and
mobile payment in China, the adoption that we
believe we are going to have in China is going
to be more significant and quicker than it has
been in the U.S., …it’s going to be a runaway
success.” –Howard Schultz, CEO
Mobile Order and Pay has exceeded 10% of
total transactions within select stores
Digital expansion focus has four key pillars:
Delivery, Personalized Offerings, Global
Deployment, and Digital Media (e.g. Spotify,
NYT)
“…we are constantly at work adding new
features, both in the U.S. and around the
globe, on both our iOS and Android platform.”
–Adam Brotman, Chief Digital Officer
Over 7,500 company-operated Starbucks
stores in the U.S. are integrated with Spotify
through the Starbucks app
“Technology
innovation
is
further
strengthening our brand, improving our
efficiency and in-store execution, increasing
our profitability and, most importantly,
enabling us to deliver an elevated Starbucks
experience to our customers, particularly to
Millennials.” –Howard Schultz, CEO
Delivery in collaboration with Postmates
rolled out in Seattle
Apple Pay began pilot programs with
Starbucks in 2015 with broader roll-out and
rewards integration planned in 2016
Founded in 1991, First Annapolis is a specialized advisory firm focused on electronic payments. Our
market coverage is international in scope with a primary focus on North America, Latin America, and
Europe. First Annapolis is headquartered in the Baltimore / Washington, D.C. corridor and Europe is
served through our office in Amsterdam. In total, we have over 70 professionals across our practice areas
giving us one of the largest and strongest advisory teams focused exclusively on electronic payments.
Practice Areas
Services
Credit Card Issuing
Payments Strategy & Innovation
Merchant Acquiring
Retailer Services
Mobile / Alternative Payments
Commercial Payments
Management Consulting
Partnership Finance
Strategic Sourcing
Portfolio Management
Strategy Development / Implementation
Rewards Program Support
M&A Advisory Services
End-to-End Transaction Support
Valuations
Fairness Opinions
Diligence / Negotiation Support
Source: Starbucks company filings, investor calls, earnings transcript, and First Annapolis Consulting research and analysis.
For more information, please contact:
John Grund, Partner, john.grund@firstannapolis.com or Aaron Mercurio, Senior Consultant, aaron.mercurio@firstannapolis.com
U.S. Headquarters
Three Park Place, Suite 200 l Annapolis, Maryland 21401
P: 410.855.8500 l info@firstannapolis.com
Payments Update: Starbucks Q1 2016
European Office
2 of 2
Keizersgracht 313-I l 1016 EE Amsterdam l The Netherlands
P:+31 (0)20 530 0360
© 2016 First Annapolis Consulting, Inc.